diff --git a/internal/storage/sqlite/child_counters_migration_test.go b/internal/storage/sqlite/child_counters_migration_test.go
new file mode 100644
index 00000000..6adaebb6
--- /dev/null
+++ b/internal/storage/sqlite/child_counters_migration_test.go
@@ -0,0 +1,163 @@
+package sqlite
+
+import (
+	"context"
+	"database/sql"
+	"os"
+	"testing"
+
+	"github.com/steveyegge/beads/internal/types"
+)
+
+func TestMigrateChildCountersTable(t *testing.T) {
+	t.Run("creates child_counters table if not exists", func(t *testing.T) {
+		// Create a temp database without child_counters table
+		dbFile, err := os.CreateTemp("", "beads_test_*.db")
+		if err != nil {
+			t.Fatalf("failed to create temp db: %v", err)
+		}
+		defer os.Remove(dbFile.Name())
+		dbFile.Close()
+
+		db, err := sql.Open("sqlite3", dbFile.Name())
+		if err != nil {
+			t.Fatalf("failed to open db: %v", err)
+		}
+		defer db.Close()
+
+		// Create minimal schema without child_counters
+		_, err = db.Exec(`
+			CREATE TABLE issues (
+				id TEXT PRIMARY KEY,
+				title TEXT NOT NULL,
+				status TEXT NOT NULL DEFAULT 'open'
+			);
+		`)
+		if err != nil {
+			t.Fatalf("failed to create issues table: %v", err)
+		}
+
+		// Verify child_counters doesn't exist
+		var count int
+		err = db.QueryRow(`
+			SELECT COUNT(*) FROM sqlite_master
+			WHERE type='table' AND name='child_counters'
+		`).Scan(&count)
+		if err != nil {
+			t.Fatalf("failed to check for child_counters table: %v", err)
+		}
+		if count != 0 {
+			t.Fatalf("child_counters table should not exist yet, got count %d", count)
+		}
+
+		// Run migration
+		err = migrateChildCountersTable(db)
+		if err != nil {
+			t.Fatalf("migration failed: %v", err)
+		}
+
+		// Verify child_counters exists
+		err = db.QueryRow(`
+			SELECT COUNT(*) FROM sqlite_master
+			WHERE type='table' AND name='child_counters'
+		`).Scan(&count)
+		if err != nil {
+			t.Fatalf("failed to check for child_counters table: %v", err)
+		}
+		if count == 0 {
+			t.Fatalf("child_counters table not created, got count %d", count)
+		}
+	})
+
+	t.Run("is idempotent", func(t *testing.T) {
+		// Create storage with full schema (including child_counters)
+		s := newTestStore(t, "")
+		defer s.Close()
+
+		db := s.db
+
+		// Run migration twice
+		err := migrateChildCountersTable(db)
+		if err != nil {
+			t.Fatalf("first migration failed: %v", err)
+		}
+
+		err = migrateChildCountersTable(db)
+		if err != nil {
+			t.Fatalf("second migration failed (not idempotent): %v", err)
+		}
+
+		// Verify table exists
+		var count int
+		err = db.QueryRow(`
+			SELECT COUNT(*) FROM sqlite_master
+			WHERE type='table' AND name='child_counters'
+		`).Scan(&count)
+		if err != nil {
+			t.Fatalf("failed to check for child_counters table: %v", err)
+		}
+		if count == 0 {
+			t.Fatalf("child_counters table not found, got count %d", count)
+		}
+	})
+
+	t.Run("has ON DELETE CASCADE constraint", func(t *testing.T) {
+		// Create storage with full schema
+		s := newTestStore(t, "")
+		defer s.Close()
+
+		ctx := context.Background()
+
+		// Create a parent issue
+		parent := &types.Issue{
+			ID:        "bd-parent",
+			Title:     "Parent",
+			Status:    types.StatusOpen,
+			Priority:  1,
+			IssueType: types.TypeEpic,
+		}
+		err := s.CreateIssue(ctx, parent, "test")
+		if err != nil {
+			t.Fatalf("failed to create parent issue: %v", err)
+		}
+
+		// Generate child ID (this populates child_counters)
+		childID, err := s.GetNextChildID(ctx, "bd-parent")
+		if err != nil {
+			t.Fatalf("failed to get next child ID: %v", err)
+		}
+		if childID != "bd-parent.1" {
+			t.Fatalf("expected bd-parent.1, got %s", childID)
+		}
+
+		// Verify child_counters has entry for parent
+		var lastChild int
+		err = s.db.QueryRow(`
+			SELECT last_child FROM child_counters WHERE parent_id = ?
+		`, "bd-parent").Scan(&lastChild)
+		if err != nil {
+			t.Fatalf("failed to query child_counters: %v", err)
+		}
+		if lastChild != 1 {
+			t.Fatalf("expected last_child=1, got %d", lastChild)
+		}
+
+		// Delete the parent issue
+		err = s.DeleteIssue(ctx, "bd-parent")
+		if err != nil {
+			t.Fatalf("failed to delete parent issue: %v", err)
+		}
+
+		// Verify child_counters entry was CASCADE deleted
+		var count int
+		err = s.db.QueryRow(`
+			SELECT COUNT(*) FROM child_counters WHERE parent_id = ?
+		`, "bd-parent").Scan(&count)
+		if err != nil {
+			t.Fatalf("failed to query child_counters: %v", err)
+		}
+		if count != 0 {
+			t.Fatalf("expected child_counters entry to be deleted, found %d entries", count)
+		}
+	})
+}
diff --git a/internal/storage/sqlite/migrations.go b/internal/storage/sqlite/migrations.go
index 14f54cb5..e0d145db 100644
--- a/internal/storage/sqlite/migrations.go
+++ b/internal/storage/sqlite/migrations.go
@@ -31,6 +31,7 @@ var migrations = []Migration{
 	{"external_ref_unique", migrateExternalRefUnique},
 	{"source_repo_column", migrateSourceRepoColumn},
 	{"repo_mtimes_table", migrateRepoMtimesTable},
+	{"child_counters_table", migrateChildCountersTable},
 }
 
 // MigrationInfo contains metadata about a migration for inspection
@@ -68,6 +69,7 @@ func getMigrationDescription(name string) string {
 		"external_ref_unique":          "Adds UNIQUE constraint on external_ref column",
 		"source_repo_column":           "Adds source_repo column for multi-repo support",
 		"repo_mtimes_table":            "Adds repo_mtimes table for multi-repo hydration caching",
+		"child_counters_table":         "Adds child_counters table for hierarchical ID generation with ON DELETE CASCADE",
 	}
 	
 	if desc, ok := descriptions[name]; ok {
@@ -644,3 +646,35 @@ func migrateRepoMtimesTable(db *sql.DB) error {
 	// Table already exists
 	return nil
 }
+
+// migrateChildCountersTable creates the child_counters table for hierarchical ID generation (bd-bb08)
+func migrateChildCountersTable(db *sql.DB) error {
+	// Check if child_counters table exists
+	var tableName string
+	err := db.QueryRow(`
+		SELECT name FROM sqlite_master
+		WHERE type='table' AND name='child_counters'
+	`).Scan(&tableName)
+
+	if err == sql.ErrNoRows {
+		// Table doesn't exist, create it
+		_, err := db.Exec(`
+			CREATE TABLE child_counters (
+				parent_id TEXT PRIMARY KEY,
+				last_child INTEGER NOT NULL DEFAULT 0,
+				FOREIGN KEY (parent_id) REFERENCES issues(id) ON DELETE CASCADE
+			)
+		`)
+		if err != nil {
+			return fmt.Errorf("failed to create child_counters table: %w", err)
+		}
+		return nil
+	}
+
+	if err != nil {
+		return fmt.Errorf("failed to check for child_counters table: %w", err)
+	}
+
+	// Table already exists
+	return nil
+}