diff --git a/internal/cmd/molecule.go b/internal/cmd/molecule.go
index e298fef4..25ba5f70 100644
--- a/internal/cmd/molecule.go
+++ b/internal/cmd/molecule.go
@@ -305,6 +305,23 @@ a permanent (but compact) record.`,
 	RunE: runMoleculeSquash,
 }
 
+var moleculeStepCmd = &cobra.Command{
+	Use:   "step",
+	Short: "Molecule step operations",
+	Long: `Commands for working with molecule steps.
+
+A molecule is a DAG of steps. Each step is a beads issue with the molecule root
+as its parent. Steps can have dependencies on other steps.
+
+When a polecat is working on a molecule, it processes one step at a time:
+1. Work on the current step
+2. When done: gt mol step done <step-id>
+3. System auto-continues to next ready step
+
+IMPORTANT: Always use 'gt mol step done' to complete steps. Do not manually
+close steps with 'bd close' - that skips the auto-continuation logic.`,
+}
+
 var moleculeBondCmd = &cobra.Command{
 	Use:   "bond <proto-id>",
 	Short: "Dynamically bond a child molecule to a running parent",
@@ -381,6 +398,10 @@ func init() {
 	moleculeBondCmd.Flags().BoolVar(&moleculeJSON, "json", false, "Output as JSON")
 	moleculeBondCmd.MarkFlagRequired("parent")
 
+	// Add step subcommand with its children
+	moleculeStepCmd.AddCommand(moleculeStepDoneCmd)
+	moleculeCmd.AddCommand(moleculeStepCmd)
+
 	// Add subcommands
 	moleculeCmd.AddCommand(moleculeStatusCmd)
 	moleculeCmd.AddCommand(moleculeCurrentCmd)
diff --git a/internal/cmd/molecule_step.go b/internal/cmd/molecule_step.go
new file mode 100644
index 00000000..25acc182
--- /dev/null
+++ b/internal/cmd/molecule_step.go
@@ -0,0 +1,378 @@
+package cmd
+
+import (
+	"encoding/json"
+	"fmt"
+	"os"
+	"os/exec"
+	"strings"
+
+	"github.com/spf13/cobra"
+	"github.com/steveyegge/gastown/internal/beads"
+	"github.com/steveyegge/gastown/internal/style"
+	"github.com/steveyegge/gastown/internal/tmux"
+	"github.com/steveyegge/gastown/internal/wisp"
+	"github.com/steveyegge/gastown/internal/workspace"
+)
+
+// moleculeStepDoneCmd is the "gt mol step done" command.
+var moleculeStepDoneCmd = &cobra.Command{
+	Use:   "done <step-id>",
+	Short: "Complete step and auto-continue to next",
+	Long: `Complete a molecule step and automatically continue to the next ready step.
+
+This command handles the step-to-step transition for polecats:
+
+1. Closes the completed step (bd close <step-id>)
+2. Extracts the molecule ID from the step
+3. Finds the next ready step (dependency-aware)
+4. If next step exists:
+   - Updates the hook to point to the next step
+   - Respawns the pane for a fresh session
+5. If molecule complete:
+   - Clears the hook
+   - Sends POLECAT_DONE to witness
+   - Exits the session
+
+IMPORTANT: This is the canonical way to complete molecule steps. Do NOT manually
+close steps with 'bd close' - it skips the auto-continuation logic.
+
+Example:
+  gt mol step done gt-abc.1    # Complete step 1 of molecule gt-abc`,
+	Args: cobra.ExactArgs(1),
+	RunE: runMoleculeStepDone,
+}
+
+var (
+	moleculeStepDryRun bool
+)
+
+func init() {
+	moleculeStepDoneCmd.Flags().BoolVarP(&moleculeStepDryRun, "dry-run", "n", false, "Show what would be done without executing")
+	moleculeStepDoneCmd.Flags().BoolVar(&moleculeJSON, "json", false, "Output as JSON")
+}
+
+// StepDoneResult is the result of a step done operation.
+type StepDoneResult struct {
+	StepID       string `json:"step_id"`
+	MoleculeID   string `json:"molecule_id"`
+	StepClosed   bool   `json:"step_closed"`
+	NextStepID   string `json:"next_step_id,omitempty"`
+	NextStepTitle string `json:"next_step_title,omitempty"`
+	Complete     bool   `json:"complete"`
+	Action       string `json:"action"` // "continue", "done", "no_more_ready"
+}
+
+func runMoleculeStepDone(cmd *cobra.Command, args []string) error {
+	stepID := args[0]
+
+	cwd, err := os.Getwd()
+	if err != nil {
+		return fmt.Errorf("getting current directory: %w", err)
+	}
+
+	// Find town root
+	townRoot, err := workspace.FindFromCwd()
+	if err != nil {
+		return fmt.Errorf("finding workspace: %w", err)
+	}
+	if townRoot == "" {
+		return fmt.Errorf("not in a Gas Town workspace")
+	}
+
+	// Find beads directory
+	workDir, err := findLocalBeadsDir()
+	if err != nil {
+		return fmt.Errorf("not in a beads workspace: %w", err)
+	}
+
+	b := beads.New(workDir)
+
+	// Step 1: Verify the step exists
+	step, err := b.Show(stepID)
+	if err != nil {
+		return fmt.Errorf("step not found: %w", err)
+	}
+
+	// Step 2: Extract molecule ID from step ID (gt-xxx.1 -> gt-xxx)
+	moleculeID := extractMoleculeIDFromStep(stepID)
+	if moleculeID == "" {
+		return fmt.Errorf("cannot extract molecule ID from step %s (expected format: gt-xxx.N)", stepID)
+	}
+
+	result := StepDoneResult{
+		StepID:     stepID,
+		MoleculeID: moleculeID,
+	}
+
+	// Step 3: Close the step
+	if moleculeStepDryRun {
+		fmt.Printf("[dry-run] Would close step: %s\n", stepID)
+		result.StepClosed = true
+	} else {
+		if err := b.Close(stepID); err != nil {
+			return fmt.Errorf("closing step: %w", err)
+		}
+		result.StepClosed = true
+		fmt.Printf("%s Closed step %s: %s\n", style.Bold.Render("✓"), stepID, step.Title)
+	}
+
+	// Step 4: Find the next ready step
+	nextStep, allComplete, err := findNextReadyStep(b, moleculeID)
+	if err != nil {
+		return fmt.Errorf("finding next step: %w", err)
+	}
+
+	if allComplete {
+		result.Complete = true
+		result.Action = "done"
+	} else if nextStep != nil {
+		result.NextStepID = nextStep.ID
+		result.NextStepTitle = nextStep.Title
+		result.Action = "continue"
+	} else {
+		// There are more steps but none are ready (blocked on dependencies)
+		result.Action = "no_more_ready"
+	}
+
+	// JSON output
+	if moleculeJSON {
+		enc := json.NewEncoder(os.Stdout)
+		enc.SetIndent("", "  ")
+		return enc.Encode(result)
+	}
+
+	// Step 5: Handle next action
+	switch result.Action {
+	case "continue":
+		return handleStepContinue(cwd, townRoot, workDir, nextStep, moleculeStepDryRun)
+
+	case "done":
+		return handleMoleculeComplete(cwd, townRoot, moleculeID, moleculeStepDryRun)
+
+	case "no_more_ready":
+		fmt.Printf("\n%s All remaining steps are blocked - waiting on dependencies\n",
+			style.Dim.Render("ℹ"))
+		fmt.Printf("Run 'gt mol progress %s' to see blocked steps\n", moleculeID)
+		return nil
+	}
+
+	return nil
+}
+
+// extractMoleculeIDFromStep extracts the molecule ID from a step ID.
+// Step IDs have format: mol-id.N where N is the step number.
+// Examples:
+//   gt-abc.1 -> gt-abc
+//   gt-xyz.3 -> gt-xyz
+//   bd-mol-abc.2 -> bd-mol-abc
+func extractMoleculeIDFromStep(stepID string) string {
+	// Find the last dot
+	lastDot := strings.LastIndex(stepID, ".")
+	if lastDot == -1 {
+		return "" // No dot - not a step ID format
+	}
+
+	// Check if what's after the dot is a number (step suffix)
+	suffix := stepID[lastDot+1:]
+	for _, c := range suffix {
+		if c < '0' || c > '9' {
+			return "" // Not a numeric suffix
+		}
+	}
+
+	return stepID[:lastDot]
+}
+
+// findNextReadyStep finds the next ready step in a molecule.
+// Returns (nextStep, allComplete, error).
+// If all steps are complete, returns (nil, true, nil).
+// If no steps are ready but some are blocked, returns (nil, false, nil).
+func findNextReadyStep(b *beads.Beads, moleculeID string) (*beads.Issue, bool, error) {
+	// Get all children of the molecule
+	children, err := b.List(beads.ListOptions{
+		Parent:   moleculeID,
+		Status:   "all",
+		Priority: -1,
+	})
+	if err != nil {
+		return nil, false, fmt.Errorf("listing molecule steps: %w", err)
+	}
+
+	if len(children) == 0 {
+		return nil, true, nil // No steps = complete
+	}
+
+	// Build set of closed step IDs
+	closedIDs := make(map[string]bool)
+	var openSteps []*beads.Issue
+
+	for _, child := range children {
+		if child.Status == "closed" {
+			closedIDs[child.ID] = true
+		} else {
+			openSteps = append(openSteps, child)
+		}
+	}
+
+	// Check if all complete
+	if len(openSteps) == 0 {
+		return nil, true, nil
+	}
+
+	// Find ready steps (open steps with all dependencies closed)
+	for _, step := range openSteps {
+		allDepsClosed := true
+		for _, depID := range step.DependsOn {
+			if !closedIDs[depID] {
+				allDepsClosed = false
+				break
+			}
+		}
+
+		if len(step.DependsOn) == 0 || allDepsClosed {
+			return step, false, nil
+		}
+	}
+
+	// No ready steps (all blocked)
+	return nil, false, nil
+}
+
+// handleStepContinue handles continuing to the next step.
+func handleStepContinue(cwd, townRoot, workDir string, nextStep *beads.Issue, dryRun bool) error {
+	fmt.Printf("\n%s Next step: %s\n", style.Bold.Render("→"), nextStep.ID)
+	fmt.Printf("  %s\n", nextStep.Title)
+
+	// Detect agent identity
+	roleInfo, err := GetRoleWithContext(cwd, townRoot)
+	if err != nil {
+		return fmt.Errorf("detecting role: %w", err)
+	}
+
+	roleCtx := RoleContext{
+		Role:     roleInfo.Role,
+		Rig:      roleInfo.Rig,
+		Polecat:  roleInfo.Polecat,
+		TownRoot: townRoot,
+		WorkDir:  cwd,
+	}
+	agentID := buildAgentIdentity(roleCtx)
+	if agentID == "" {
+		return fmt.Errorf("cannot determine agent identity (role: %s)", roleCtx.Role)
+	}
+
+	// Get git root for hook files
+	gitRoot, err := getGitRoot()
+	if err != nil {
+		return fmt.Errorf("finding git root: %w", err)
+	}
+
+	// Update the hook to point to the next step
+	sw := wisp.NewSlungWork(nextStep.ID, agentID)
+	sw.Subject = fmt.Sprintf("Step: %s", nextStep.Title)
+	sw.Context = fmt.Sprintf("Continuing molecule from step %s", nextStep.ID)
+
+	if dryRun {
+		fmt.Printf("\n[dry-run] Would update hook to: %s\n", nextStep.ID)
+		fmt.Printf("[dry-run] Would respawn pane\n")
+		return nil
+	}
+
+	if err := wisp.WriteSlungWork(gitRoot, agentID, sw); err != nil {
+		return fmt.Errorf("writing hook: %w", err)
+	}
+
+	fmt.Printf("%s Hook updated for next step\n", style.Bold.Render("🪝"))
+
+	// Respawn the pane
+	if !tmux.IsInsideTmux() {
+		// Not in tmux - just print next action
+		fmt.Printf("\n%s Not in tmux - start new session with 'gt prime'\n",
+			style.Dim.Render("ℹ"))
+		return nil
+	}
+
+	pane := os.Getenv("TMUX_PANE")
+	if pane == "" {
+		return fmt.Errorf("TMUX_PANE not set")
+	}
+
+	// Get current session for restart command
+	currentSession, err := getCurrentTmuxSession()
+	if err != nil {
+		return fmt.Errorf("getting session name: %w", err)
+	}
+
+	restartCmd, err := buildRestartCommand(currentSession)
+	if err != nil {
+		return fmt.Errorf("building restart command: %w", err)
+	}
+
+	fmt.Printf("\n%s Respawning for next step...\n", style.Bold.Render("🔄"))
+
+	t := tmux.NewTmux()
+
+	// Clear history before respawn
+	if err := t.ClearHistory(pane); err != nil {
+		// Non-fatal
+		fmt.Printf("%s Warning: could not clear history: %v\n", style.Dim.Render("⚠"), err)
+	}
+
+	return t.RespawnPane(pane, restartCmd)
+}
+
+// handleMoleculeComplete handles when a molecule is complete.
+func handleMoleculeComplete(cwd, townRoot, moleculeID string, dryRun bool) error {
+	fmt.Printf("\n%s Molecule complete!\n", style.Bold.Render("🎉"))
+
+	// Detect agent identity
+	roleInfo, err := GetRoleWithContext(cwd, townRoot)
+	if err != nil {
+		return fmt.Errorf("detecting role: %w", err)
+	}
+
+	roleCtx := RoleContext{
+		Role:     roleInfo.Role,
+		Rig:      roleInfo.Rig,
+		Polecat:  roleInfo.Polecat,
+		TownRoot: townRoot,
+		WorkDir:  cwd,
+	}
+	agentID := buildAgentIdentity(roleCtx)
+
+	// Get git root for hook files
+	gitRoot, err := getGitRoot()
+	if err != nil {
+		return fmt.Errorf("finding git root: %w", err)
+	}
+
+	if dryRun {
+		fmt.Printf("[dry-run] Would burn hook for %s\n", agentID)
+		fmt.Printf("[dry-run] Would send POLECAT_DONE to witness\n")
+		return nil
+	}
+
+	// Burn the hook
+	if err := wisp.BurnHook(gitRoot, agentID); err != nil {
+		fmt.Printf("%s Warning: could not burn hook: %v\n", style.Dim.Render("⚠"), err)
+	} else {
+		fmt.Printf("%s Hook cleared\n", style.Bold.Render("✓"))
+	}
+
+	// For polecats, use gt done to signal completion
+	if roleCtx.Role == RolePolecat {
+		fmt.Printf("%s Signaling completion to witness...\n", style.Bold.Render("📤"))
+
+		doneCmd := exec.Command("gt", "done", "--exit", "DEFERRED")
+		doneCmd.Stdout = os.Stdout
+		doneCmd.Stderr = os.Stderr
+		return doneCmd.Run()
+	}
+
+	// For other roles, just print completion message
+	fmt.Printf("\nMolecule %s is complete. Ready for next assignment.\n", moleculeID)
+	return nil
+}
+
+// getGitRoot is defined in prime.go