diff --git a/.gitignore b/.gitignore
index 0ddc6d0e..1c2aebf0 100644
--- a/.gitignore
+++ b/.gitignore
@@ -33,3 +33,6 @@ state.json
 
 # Clone-specific CLAUDE.md (regenerated locally per clone)
 CLAUDE.md
+
+# Generated by go:generate from .beads/formulas/
+internal/formula/formulas/
diff --git a/Makefile b/Makefile
index 4810dc3f..22613fdf 100644
--- a/Makefile
+++ b/Makefile
@@ -1,4 +1,4 @@
-.PHONY: build install clean test
+.PHONY: build install clean test generate
 
 BINARY := gt
 BUILD_DIR := .
@@ -12,7 +12,10 @@ LDFLAGS := -X github.com/steveyegge/gastown/internal/cmd.Version=$(VERSION) \
            -X github.com/steveyegge/gastown/internal/cmd.Commit=$(COMMIT) \
            -X github.com/steveyegge/gastown/internal/cmd.BuildTime=$(BUILD_TIME)
 
-build:
+generate:
+	go generate ./...
+
+build: generate
 	go build -ldflags "$(LDFLAGS)" -o $(BUILD_DIR)/$(BINARY) ./cmd/gt
 ifeq ($(shell uname),Darwin)
 	@codesign -s - -f $(BUILD_DIR)/$(BINARY) 2>/dev/null || true
diff --git a/internal/cmd/install.go b/internal/cmd/install.go
index 85e9ec7c..16bae4f1 100644
--- a/internal/cmd/install.go
+++ b/internal/cmd/install.go
@@ -12,6 +12,7 @@ import (
 	"github.com/spf13/cobra"
 	"github.com/steveyegge/gastown/internal/config"
 	"github.com/steveyegge/gastown/internal/deps"
+	"github.com/steveyegge/gastown/internal/formula"
 	"github.com/steveyegge/gastown/internal/session"
 	"github.com/steveyegge/gastown/internal/style"
 	"github.com/steveyegge/gastown/internal/templates"
@@ -195,6 +196,14 @@ func runInstall(cmd *cobra.Command, args []string) error {
 			fmt.Printf("   %s Could not initialize town beads: %v\n", style.Dim.Render("⚠"), err)
 		} else {
 			fmt.Printf("   ✓ Initialized .beads/ (town-level beads with hq- prefix)\n")
+
+			// Provision embedded formulas to .beads/formulas/
+			if count, err := formula.ProvisionFormulas(absPath); err != nil {
+				// Non-fatal: formulas are optional, just convenience
+				fmt.Printf("   %s Could not provision formulas: %v\n", style.Dim.Render("⚠"), err)
+			} else if count > 0 {
+				fmt.Printf("   ✓ Provisioned %d formulas\n", count)
+			}
 		}
 
 		// NOTE: Agent beads (gt-deacon, gt-mayor) are created by gt rig add,
diff --git a/internal/cmd/install_integration_test.go b/internal/cmd/install_integration_test.go
index 2b534339..778dadfd 100644
--- a/internal/cmd/install_integration_test.go
+++ b/internal/cmd/install_integration_test.go
@@ -163,6 +163,60 @@ func TestInstallIdempotent(t *testing.T) {
 	}
 }
 
+// TestInstallFormulasProvisioned validates that embedded formulas are copied
+// to .beads/formulas/ during installation.
+func TestInstallFormulasProvisioned(t *testing.T) {
+	// Skip if bd is not available
+	if _, err := exec.LookPath("bd"); err != nil {
+		t.Skip("bd not installed, skipping formulas test")
+	}
+
+	tmpDir := t.TempDir()
+	hqPath := filepath.Join(tmpDir, "test-hq")
+
+	gtBinary := buildGT(t)
+
+	// Run gt install (includes beads and formula provisioning)
+	cmd := exec.Command(gtBinary, "install", hqPath)
+	cmd.Env = append(os.Environ(), "HOME="+tmpDir)
+	output, err := cmd.CombinedOutput()
+	if err != nil {
+		t.Fatalf("gt install failed: %v\nOutput: %s", err, output)
+	}
+
+	// Verify .beads/formulas/ directory exists
+	formulasDir := filepath.Join(hqPath, ".beads", "formulas")
+	assertDirExists(t, formulasDir, ".beads/formulas/")
+
+	// Verify at least some expected formulas exist
+	expectedFormulas := []string{
+		"mol-deacon-patrol.formula.toml",
+		"mol-refinery-patrol.formula.toml",
+		"code-review.formula.toml",
+	}
+	for _, f := range expectedFormulas {
+		formulaPath := filepath.Join(formulasDir, f)
+		assertFileExists(t, formulaPath, f)
+	}
+
+	// Verify the count matches embedded formulas
+	entries, err := os.ReadDir(formulasDir)
+	if err != nil {
+		t.Fatalf("failed to read formulas dir: %v", err)
+	}
+	// Count only formula files (not directories)
+	var fileCount int
+	for _, e := range entries {
+		if !e.IsDir() {
+			fileCount++
+		}
+	}
+	// Should have at least 20 formulas (allows for some variation)
+	if fileCount < 20 {
+		t.Errorf("expected at least 20 formulas, got %d", fileCount)
+	}
+}
+
 // TestInstallNoBeadsFlag validates that --no-beads skips beads initialization.
 func TestInstallNoBeadsFlag(t *testing.T) {
 	tmpDir := t.TempDir()
diff --git a/internal/formula/embed.go b/internal/formula/embed.go
new file mode 100644
index 00000000..050d2ae4
--- /dev/null
+++ b/internal/formula/embed.go
@@ -0,0 +1,62 @@
+package formula
+
+import (
+	"embed"
+	"fmt"
+	"log"
+	"os"
+	"path/filepath"
+)
+
+// Generate formulas directory from canonical source at .beads/formulas/
+//go:generate sh -c "rm -rf formulas && mkdir -p formulas && cp ../../.beads/formulas/*.formula.toml ../../.beads/formulas/*.formula.json formulas/ 2>/dev/null || cp ../../.beads/formulas/*.formula.toml formulas/"
+
+//go:embed formulas/*.formula.toml formulas/*.formula.json
+var formulasFS embed.FS
+
+// ProvisionFormulas creates the .beads/formulas/ directory with embedded formulas.
+// This ensures new installations have the standard formula library.
+// If a formula already exists, it is skipped (no overwrite).
+// Returns the number of formulas provisioned.
+func ProvisionFormulas(beadsPath string) (int, error) {
+	entries, err := formulasFS.ReadDir("formulas")
+	if err != nil {
+		return 0, fmt.Errorf("reading formulas directory: %w", err)
+	}
+
+	// Create .beads/formulas/ directory
+	formulasDir := filepath.Join(beadsPath, ".beads", "formulas")
+	if err := os.MkdirAll(formulasDir, 0755); err != nil {
+		return 0, fmt.Errorf("creating formulas directory: %w", err)
+	}
+
+	count := 0
+	for _, entry := range entries {
+		if entry.IsDir() {
+			continue
+		}
+
+		destPath := filepath.Join(formulasDir, entry.Name())
+
+		// Skip if formula already exists (don't overwrite user customizations)
+		if _, err := os.Stat(destPath); err == nil {
+			continue
+		} else if !os.IsNotExist(err) {
+			// Log unexpected errors (e.g., permission denied) but continue
+			log.Printf("warning: could not check formula %s: %v", entry.Name(), err)
+			continue
+		}
+
+		content, err := formulasFS.ReadFile("formulas/" + entry.Name())
+		if err != nil {
+			return count, fmt.Errorf("reading %s: %w", entry.Name(), err)
+		}
+
+		if err := os.WriteFile(destPath, content, 0644); err != nil {
+			return count, fmt.Errorf("writing %s: %w", entry.Name(), err)
+		}
+		count++
+	}
+
+	return count, nil
+}