diff --git a/api/app/models/__init__.py b/api/app/models/__init__.py
index 66b9419..512a304 100644
--- a/api/app/models/__init__.py
+++ b/api/app/models/__init__.py
@@ -9,6 +9,7 @@ from app.models.enums import (
     EffectType,
     DamageType,
     ItemType,
+    ItemRarity,
     StatType,
     AbilityType,
     CombatStatus,
@@ -53,6 +54,7 @@ __all__ = [
     "EffectType",
     "DamageType",
     "ItemType",
+    "ItemRarity",
     "StatType",
     "AbilityType",
     "CombatStatus",
diff --git a/api/app/models/enums.py b/api/app/models/enums.py
index d9952eb..a2924cd 100644
--- a/api/app/models/enums.py
+++ b/api/app/models/enums.py
@@ -40,6 +40,16 @@ class ItemType(Enum):
     QUEST_ITEM = "quest_item"   # Story-related, non-tradeable
 
 
+class ItemRarity(Enum):
+    """Item rarity tiers affecting drop rates, value, and visual styling."""
+
+    COMMON = "common"           # White/gray - basic items
+    UNCOMMON = "uncommon"       # Green - slightly better
+    RARE = "rare"               # Blue - noticeably better
+    EPIC = "epic"               # Purple - powerful items
+    LEGENDARY = "legendary"     # Orange/gold - best items
+
+
 class StatType(Enum):
     """Character attribute types."""
 
diff --git a/api/app/models/items.py b/api/app/models/items.py
index 7bc1e6f..2365a6e 100644
--- a/api/app/models/items.py
+++ b/api/app/models/items.py
@@ -8,7 +8,7 @@ including weapons, armor, consumables, and quest items.
 from dataclasses import dataclass, field, asdict
 from typing import Dict, Any, List, Optional
 
-from app.models.enums import ItemType, DamageType
+from app.models.enums import ItemType, ItemRarity, DamageType
 from app.models.effects import Effect
 
 
@@ -24,6 +24,7 @@ class Item:
         item_id: Unique identifier
         name: Display name
         item_type: Category (weapon, armor, consumable, quest_item)
+        rarity: Rarity tier (common, uncommon, rare, epic, legendary)
         description: Item lore and information
         value: Gold value for buying/selling
         is_tradeable: Whether item can be sold on marketplace
@@ -49,7 +50,8 @@ class Item:
     item_id: str
     name: str
     item_type: ItemType
-    description: str
+    rarity: ItemRarity = ItemRarity.COMMON
+    description: str = ""
     value: int = 0
     is_tradeable: bool = True
 
@@ -158,6 +160,7 @@ class Item:
         """
         data = asdict(self)
         data["item_type"] = self.item_type.value
+        data["rarity"] = self.rarity.value
         if self.damage_type:
             data["damage_type"] = self.damage_type.value
         if self.elemental_damage_type:
@@ -178,6 +181,7 @@ class Item:
         """
         # Convert string values back to enums
         item_type = ItemType(data["item_type"])
+        rarity = ItemRarity(data.get("rarity", "common"))
         damage_type = DamageType(data["damage_type"]) if data.get("damage_type") else None
         elemental_damage_type = (
             DamageType(data["elemental_damage_type"])
@@ -194,7 +198,8 @@ class Item:
             item_id=data["item_id"],
             name=data["name"],
             item_type=item_type,
-            description=data["description"],
+            rarity=rarity,
+            description=data.get("description", ""),
             value=data.get("value", 0),
             is_tradeable=data.get("is_tradeable", True),
             stat_bonuses=data.get("stat_bonuses", {}),
diff --git a/api/tests/test_items.py b/api/tests/test_items.py
new file mode 100644
index 0000000..893ed3e
--- /dev/null
+++ b/api/tests/test_items.py
@@ -0,0 +1,387 @@
+"""
+Unit tests for Item dataclass and ItemRarity enum.
+
+Tests item creation, rarity, type checking, and serialization.
+"""
+
+import pytest
+from app.models.items import Item
+from app.models.enums import ItemType, ItemRarity, DamageType
+
+
+class TestItemRarityEnum:
+    """Tests for ItemRarity enum."""
+
+    def test_rarity_values(self):
+        """Test all rarity values exist and have correct string values."""
+        assert ItemRarity.COMMON.value == "common"
+        assert ItemRarity.UNCOMMON.value == "uncommon"
+        assert ItemRarity.RARE.value == "rare"
+        assert ItemRarity.EPIC.value == "epic"
+        assert ItemRarity.LEGENDARY.value == "legendary"
+
+    def test_rarity_from_string(self):
+        """Test creating rarity from string value."""
+        assert ItemRarity("common") == ItemRarity.COMMON
+        assert ItemRarity("uncommon") == ItemRarity.UNCOMMON
+        assert ItemRarity("rare") == ItemRarity.RARE
+        assert ItemRarity("epic") == ItemRarity.EPIC
+        assert ItemRarity("legendary") == ItemRarity.LEGENDARY
+
+    def test_rarity_count(self):
+        """Test that there are exactly 5 rarity tiers."""
+        assert len(ItemRarity) == 5
+
+
+class TestItemCreation:
+    """Tests for creating Item instances."""
+
+    def test_create_basic_item(self):
+        """Test creating a basic item with minimal fields."""
+        item = Item(
+            item_id="test_item",
+            name="Test Item",
+            item_type=ItemType.QUEST_ITEM,
+        )
+
+        assert item.item_id == "test_item"
+        assert item.name == "Test Item"
+        assert item.item_type == ItemType.QUEST_ITEM
+        assert item.rarity == ItemRarity.COMMON  # Default
+        assert item.description == ""
+        assert item.value == 0
+        assert item.is_tradeable == True
+
+    def test_item_default_rarity_is_common(self):
+        """Test that items default to COMMON rarity."""
+        item = Item(
+            item_id="sword_1",
+            name="Iron Sword",
+            item_type=ItemType.WEAPON,
+        )
+
+        assert item.rarity == ItemRarity.COMMON
+
+    def test_create_item_with_rarity(self):
+        """Test creating items with different rarity levels."""
+        uncommon = Item(
+            item_id="sword_2",
+            name="Steel Sword",
+            item_type=ItemType.WEAPON,
+            rarity=ItemRarity.UNCOMMON,
+        )
+        assert uncommon.rarity == ItemRarity.UNCOMMON
+
+        rare = Item(
+            item_id="sword_3",
+            name="Mithril Sword",
+            item_type=ItemType.WEAPON,
+            rarity=ItemRarity.RARE,
+        )
+        assert rare.rarity == ItemRarity.RARE
+
+        epic = Item(
+            item_id="sword_4",
+            name="Dragon Sword",
+            item_type=ItemType.WEAPON,
+            rarity=ItemRarity.EPIC,
+        )
+        assert epic.rarity == ItemRarity.EPIC
+
+        legendary = Item(
+            item_id="sword_5",
+            name="Excalibur",
+            item_type=ItemType.WEAPON,
+            rarity=ItemRarity.LEGENDARY,
+        )
+        assert legendary.rarity == ItemRarity.LEGENDARY
+
+    def test_create_weapon(self):
+        """Test creating a weapon with all weapon-specific fields."""
+        weapon = Item(
+            item_id="fire_sword",
+            name="Flame Blade",
+            item_type=ItemType.WEAPON,
+            rarity=ItemRarity.RARE,
+            description="A sword wreathed in flames.",
+            value=500,
+            damage=25,
+            damage_type=DamageType.PHYSICAL,
+            crit_chance=0.15,
+            crit_multiplier=2.5,
+            elemental_damage_type=DamageType.FIRE,
+            physical_ratio=0.7,
+            elemental_ratio=0.3,
+        )
+
+        assert weapon.is_weapon() == True
+        assert weapon.is_elemental_weapon() == True
+        assert weapon.damage == 25
+        assert weapon.crit_chance == 0.15
+        assert weapon.crit_multiplier == 2.5
+        assert weapon.elemental_damage_type == DamageType.FIRE
+        assert weapon.physical_ratio == 0.7
+        assert weapon.elemental_ratio == 0.3
+
+    def test_create_armor(self):
+        """Test creating armor with defense/resistance."""
+        armor = Item(
+            item_id="plate_armor",
+            name="Steel Plate Armor",
+            item_type=ItemType.ARMOR,
+            rarity=ItemRarity.UNCOMMON,
+            description="Heavy steel armor.",
+            value=300,
+            defense=15,
+            resistance=5,
+        )
+
+        assert armor.is_armor() == True
+        assert armor.defense == 15
+        assert armor.resistance == 5
+
+    def test_create_consumable(self):
+        """Test creating a consumable item."""
+        potion = Item(
+            item_id="health_potion",
+            name="Health Potion",
+            item_type=ItemType.CONSUMABLE,
+            rarity=ItemRarity.COMMON,
+            description="Restores 50 HP.",
+            value=25,
+        )
+
+        assert potion.is_consumable() == True
+        assert potion.is_tradeable == True
+
+
+class TestItemTypeMethods:
+    """Tests for item type checking methods."""
+
+    def test_is_weapon(self):
+        """Test is_weapon() method."""
+        weapon = Item(item_id="w", name="W", item_type=ItemType.WEAPON)
+        armor = Item(item_id="a", name="A", item_type=ItemType.ARMOR)
+
+        assert weapon.is_weapon() == True
+        assert armor.is_weapon() == False
+
+    def test_is_armor(self):
+        """Test is_armor() method."""
+        weapon = Item(item_id="w", name="W", item_type=ItemType.WEAPON)
+        armor = Item(item_id="a", name="A", item_type=ItemType.ARMOR)
+
+        assert armor.is_armor() == True
+        assert weapon.is_armor() == False
+
+    def test_is_consumable(self):
+        """Test is_consumable() method."""
+        consumable = Item(item_id="c", name="C", item_type=ItemType.CONSUMABLE)
+        weapon = Item(item_id="w", name="W", item_type=ItemType.WEAPON)
+
+        assert consumable.is_consumable() == True
+        assert weapon.is_consumable() == False
+
+    def test_is_quest_item(self):
+        """Test is_quest_item() method."""
+        quest = Item(item_id="q", name="Q", item_type=ItemType.QUEST_ITEM)
+        weapon = Item(item_id="w", name="W", item_type=ItemType.WEAPON)
+
+        assert quest.is_quest_item() == True
+        assert weapon.is_quest_item() == False
+
+
+class TestItemSerialization:
+    """Tests for Item serialization and deserialization."""
+
+    def test_to_dict_includes_rarity(self):
+        """Test that to_dict() includes rarity as string."""
+        item = Item(
+            item_id="test",
+            name="Test",
+            item_type=ItemType.WEAPON,
+            rarity=ItemRarity.EPIC,
+            description="Test item",
+        )
+
+        data = item.to_dict()
+
+        assert data["rarity"] == "epic"
+        assert data["item_type"] == "weapon"
+
+    def test_from_dict_parses_rarity(self):
+        """Test that from_dict() parses rarity correctly."""
+        data = {
+            "item_id": "test",
+            "name": "Test",
+            "item_type": "weapon",
+            "rarity": "legendary",
+            "description": "Test item",
+        }
+
+        item = Item.from_dict(data)
+
+        assert item.rarity == ItemRarity.LEGENDARY
+        assert item.item_type == ItemType.WEAPON
+
+    def test_from_dict_defaults_to_common_rarity(self):
+        """Test that from_dict() defaults to COMMON if rarity missing."""
+        data = {
+            "item_id": "test",
+            "name": "Test",
+            "item_type": "weapon",
+            "description": "Test item",
+            # No rarity field
+        }
+
+        item = Item.from_dict(data)
+
+        assert item.rarity == ItemRarity.COMMON
+
+    def test_round_trip_serialization(self):
+        """Test serialization and deserialization preserve all data."""
+        original = Item(
+            item_id="flame_sword",
+            name="Flame Blade",
+            item_type=ItemType.WEAPON,
+            rarity=ItemRarity.RARE,
+            description="A fiery blade.",
+            value=500,
+            damage=25,
+            damage_type=DamageType.PHYSICAL,
+            crit_chance=0.12,
+            crit_multiplier=2.5,
+            elemental_damage_type=DamageType.FIRE,
+            physical_ratio=0.7,
+            elemental_ratio=0.3,
+            defense=0,
+            resistance=0,
+            required_level=5,
+            stat_bonuses={"strength": 3},
+        )
+
+        # Serialize then deserialize
+        data = original.to_dict()
+        restored = Item.from_dict(data)
+
+        assert restored.item_id == original.item_id
+        assert restored.name == original.name
+        assert restored.item_type == original.item_type
+        assert restored.rarity == original.rarity
+        assert restored.description == original.description
+        assert restored.value == original.value
+        assert restored.damage == original.damage
+        assert restored.damage_type == original.damage_type
+        assert restored.crit_chance == original.crit_chance
+        assert restored.crit_multiplier == original.crit_multiplier
+        assert restored.elemental_damage_type == original.elemental_damage_type
+        assert restored.physical_ratio == original.physical_ratio
+        assert restored.elemental_ratio == original.elemental_ratio
+        assert restored.required_level == original.required_level
+        assert restored.stat_bonuses == original.stat_bonuses
+
+    def test_round_trip_all_rarities(self):
+        """Test round-trip serialization for all rarity levels."""
+        for rarity in ItemRarity:
+            original = Item(
+                item_id=f"item_{rarity.value}",
+                name=f"{rarity.value.title()} Item",
+                item_type=ItemType.CONSUMABLE,
+                rarity=rarity,
+            )
+
+            data = original.to_dict()
+            restored = Item.from_dict(data)
+
+            assert restored.rarity == rarity
+
+
+class TestItemEquippability:
+    """Tests for item equip requirements."""
+
+    def test_can_equip_level_requirement(self):
+        """Test level requirement checking."""
+        item = Item(
+            item_id="high_level_sword",
+            name="Epic Sword",
+            item_type=ItemType.WEAPON,
+            required_level=10,
+        )
+
+        assert item.can_equip(character_level=5) == False
+        assert item.can_equip(character_level=10) == True
+        assert item.can_equip(character_level=15) == True
+
+    def test_can_equip_class_requirement(self):
+        """Test class requirement checking."""
+        item = Item(
+            item_id="mage_staff",
+            name="Mage Staff",
+            item_type=ItemType.WEAPON,
+            required_class="mage",
+        )
+
+        assert item.can_equip(character_level=1, character_class="warrior") == False
+        assert item.can_equip(character_level=1, character_class="mage") == True
+
+
+class TestItemStatBonuses:
+    """Tests for item stat bonus methods."""
+
+    def test_get_total_stat_bonus(self):
+        """Test getting stat bonuses from items."""
+        item = Item(
+            item_id="ring_of_power",
+            name="Ring of Power",
+            item_type=ItemType.ARMOR,
+            stat_bonuses={"strength": 5, "constitution": 3},
+        )
+
+        assert item.get_total_stat_bonus("strength") == 5
+        assert item.get_total_stat_bonus("constitution") == 3
+        assert item.get_total_stat_bonus("dexterity") == 0  # Not in bonuses
+
+
+class TestItemRepr:
+    """Tests for item string representation."""
+
+    def test_weapon_repr(self):
+        """Test weapon __repr__ output."""
+        weapon = Item(
+            item_id="sword",
+            name="Iron Sword",
+            item_type=ItemType.WEAPON,
+            damage=10,
+            value=50,
+        )
+
+        repr_str = repr(weapon)
+        assert "Iron Sword" in repr_str
+        assert "weapon" in repr_str
+
+    def test_armor_repr(self):
+        """Test armor __repr__ output."""
+        armor = Item(
+            item_id="armor",
+            name="Leather Armor",
+            item_type=ItemType.ARMOR,
+            defense=5,
+            value=30,
+        )
+
+        repr_str = repr(armor)
+        assert "Leather Armor" in repr_str
+        assert "armor" in repr_str
+
+    def test_consumable_repr(self):
+        """Test consumable __repr__ output."""
+        potion = Item(
+            item_id="potion",
+            name="Health Potion",
+            item_type=ItemType.CONSUMABLE,
+            value=10,
+        )
+
+        repr_str = repr(potion)
+        assert "Health Potion" in repr_str
+        assert "consumable" in repr_str