diff --git a/webui/src/web-components/demo/sketch-theme-toggle.demo.ts b/webui/src/web-components/demo/sketch-theme-toggle.demo.ts
new file mode 100644
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+++ b/webui/src/web-components/demo/sketch-theme-toggle.demo.ts
@@ -0,0 +1,118 @@
+/**
+ * Demo module for theme-toggle component
+ */
+
+import { DemoModule } from "./demo-framework/types";
+import { demoUtils } from "./demo-fixtures/index";
+import { ThemeService } from "../theme-service.js";
+
+const demo: DemoModule = {
+  title: "Theme Toggle Demo",
+  description:
+    "Three-way theme toggle: light mode, dark mode, and system preference",
+  imports: ["../sketch-theme-toggle"],
+  styles: ["/dist/tailwind.css"],
+
+  setup: async (container: HTMLElement) => {
+    // Initialize the theme service
+    const themeService = ThemeService.getInstance();
+    themeService.initializeTheme();
+    // Create demo sections
+    const basicSection = demoUtils.createDemoSection(
+      "Three-Way Theme Toggle",
+      "Click the toggle button to cycle through: light → dark → system → light",
+    );
+
+    const toggleContainer = document.createElement("div");
+    toggleContainer.className =
+      "flex items-center gap-4 p-4 bg-white dark:bg-gray-800 rounded-lg border border-gray-200 dark:border-gray-700";
+    toggleContainer.innerHTML = `
+      <sketch-theme-toggle></sketch-theme-toggle>
+      <div class="text-sm text-gray-600 dark:text-gray-400">
+        <div class="font-medium mb-1">Theme modes:</div>
+        <div class="space-y-1">
+          <div>☀️ Light mode - Always light theme</div>
+          <div>🌙 Dark mode - Always dark theme</div>
+          <div>💻 System theme - Follows OS preference</div>
+        </div>
+      </div>
+    `;
+    basicSection.appendChild(toggleContainer);
+
+    // Visual test elements section
+    const visualSection = demoUtils.createDemoSection(
+      "Visual Test Elements",
+      "Elements that demonstrate the theme switching behavior",
+    );
+
+    const visualContainer = document.createElement("div");
+    visualContainer.className = "space-y-4";
+    visualContainer.innerHTML = `
+      <div class="bg-white dark:bg-gray-800 p-4 rounded border border-gray-200 dark:border-gray-600">
+        <h4 class="font-medium text-gray-900 dark:text-gray-100 mb-2">Test Card</h4>
+        <p class="text-gray-600 dark:text-gray-300">
+          This card should switch between light and dark styling when you toggle the theme.
+        </p>
+      </div>
+      
+      <div class="flex gap-3">
+        <button class="px-4 py-2 bg-blue-500 hover:bg-blue-600 text-white rounded transition-colors">
+          Primary Button
+        </button>
+        <button class="px-4 py-2 bg-gray-200 dark:bg-gray-700 hover:bg-gray-300 dark:hover:bg-gray-600 text-gray-700 dark:text-gray-200 rounded transition-colors">
+          Secondary Button
+        </button>
+      </div>
+      
+      <div class="grid grid-cols-3 gap-4">
+        <div class="bg-white dark:bg-gray-800 p-3 rounded border border-gray-200 dark:border-gray-600">
+          <div class="text-sm font-medium text-gray-900 dark:text-gray-100">Light Background</div>
+          <div class="text-xs text-gray-500 dark:text-gray-400">Should be dark in dark mode</div>
+        </div>
+        <div class="bg-gray-100 dark:bg-gray-800 p-3 rounded border border-gray-200 dark:border-gray-600">
+          <div class="text-sm font-medium text-gray-900 dark:text-gray-100">Gray Background</div>
+          <div class="text-xs text-gray-500 dark:text-gray-400">Should be darker in dark mode</div>
+        </div>
+        <div class="bg-gray-200 dark:bg-gray-700 p-3 rounded border border-gray-200 dark:border-gray-600">
+          <div class="text-sm font-medium text-gray-900 dark:text-gray-100">Darker Background</div>
+          <div class="text-xs text-gray-500 dark:text-gray-400">Should be lighter in dark mode</div>
+        </div>
+      </div>
+    `;
+    visualSection.appendChild(visualContainer);
+
+    // Features section
+    const featuresSection = demoUtils.createDemoSection(
+      "Features",
+      "Key capabilities of the theme toggle component",
+    );
+
+    const featuresContainer = document.createElement("div");
+    featuresContainer.className =
+      "bg-blue-50 dark:bg-blue-900/20 p-6 rounded-lg border border-blue-200 dark:border-blue-800";
+    featuresContainer.innerHTML = `
+      <ul class="space-y-2 text-sm text-blue-800 dark:text-blue-200">
+        <li>• Three-way toggle: light → dark → system → light</li>
+        <li>• Icons: ☀️ (light), 🌙 (dark), 💻 (system)</li>
+        <li>• System mode follows OS dark/light preference</li>
+        <li>• Theme preference persists across page reloads</li>
+        <li>• Emits theme-changed events for component coordination</li>
+        <li>• Smooth transitions between themes</li>
+        <li>• Uses localStorage for preference storage</li>
+      </ul>
+    `;
+    featuresSection.appendChild(featuresContainer);
+
+    // Add all sections to container
+    container.appendChild(basicSection);
+    container.appendChild(visualSection);
+    container.appendChild(featuresSection);
+  },
+
+  cleanup: async () => {
+    // Clean up any event listeners or resources if needed
+    // The theme toggle component handles its own cleanup
+  },
+};
+
+export default demo;