diff --git a/src/lib/providers/fal.ts b/src/lib/providers/fal.ts
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+++ b/src/lib/providers/fal.ts
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+/**
+ * fal.ai Provider Implementation
+ *
+ * Implements ProviderInterface for fal.ai's AI model marketplace.
+ * Provides model discovery via fal.ai's REST API and self-registers
+ * in the provider registry when imported.
+ *
+ * Usage:
+ *   import "@/lib/providers/fal"; // Just importing registers the provider
+ *
+ *   // Or get it from registry:
+ *   import { getProvider } from "@/lib/providers";
+ *   const fal = getProvider("fal");
+ *
+ * Note: fal.ai works without an API key but with rate limits.
+ * Providing a key enables higher rate limits.
+ */
+
+import {
+  ProviderInterface,
+  ProviderModel,
+  ModelCapability,
+  GenerationInput,
+  GenerationOutput,
+  registerProvider,
+} from "@/lib/providers";
+
+const FAL_API_BASE = "https://api.fal.ai/v1";
+const PROVIDER_SETTINGS_KEY = "node-banana-provider-settings";
+
+/**
+ * Categories we care about for image/video generation
+ */
+const RELEVANT_CATEGORIES = [
+  "text-to-image",
+  "image-to-image",
+  "text-to-video",
+  "image-to-video",
+];
+
+/**
+ * Response schema from fal.ai models endpoint
+ */
+interface FalModelsResponse {
+  models: FalModel[];
+  next_cursor: string | null;
+  has_more: boolean;
+}
+
+/**
+ * Model schema from fal.ai API
+ */
+interface FalModel {
+  endpoint_id: string;
+  metadata: {
+    display_name: string;
+    category: string;
+    description: string;
+    status: "active" | "deprecated";
+    tags: string[];
+    updated_at: string;
+    is_favorited: boolean | null;
+    thumbnail_url: string;
+    model_url: string;
+    date: string;
+    highlighted: boolean;
+    pinned: boolean;
+    thumbnail_animated_url?: string;
+    github_url?: string;
+    license_type?: "commercial" | "research" | "private";
+  };
+  openapi?: Record<string, unknown>;
+}
+
+/**
+ * Get API key from localStorage (client-side only)
+ * Returns null when running on server or if not configured
+ */
+function getApiKeyFromStorage(): string | null {
+  if (typeof window === "undefined") {
+    return null;
+  }
+
+  try {
+    const settingsJson = localStorage.getItem(PROVIDER_SETTINGS_KEY);
+    if (!settingsJson) return null;
+
+    const settings = JSON.parse(settingsJson);
+    return settings?.providers?.fal?.apiKey ?? null;
+  } catch {
+    return null;
+  }
+}
+
+/**
+ * Map fal.ai category to ModelCapability
+ * Returns the capability if it's one we support, null otherwise
+ */
+function mapCategoryToCapability(category: string): ModelCapability | null {
+  if (RELEVANT_CATEGORIES.includes(category)) {
+    return category as ModelCapability;
+  }
+  return null;
+}
+
+/**
+ * Check if a model has a relevant category
+ */
+function isRelevantModel(model: FalModel): boolean {
+  return RELEVANT_CATEGORIES.includes(model.metadata.category);
+}
+
+/**
+ * Map fal.ai model to our normalized ProviderModel format
+ */
+function mapToProviderModel(model: FalModel): ProviderModel {
+  const capability = mapCategoryToCapability(model.metadata.category);
+
+  return {
+    id: model.endpoint_id,
+    name: model.metadata.display_name,
+    description: model.metadata.description,
+    provider: "fal",
+    capabilities: capability ? [capability] : [],
+    coverImage: model.metadata.thumbnail_url,
+  };
+}
+
+/**
+ * Build authorization headers for fal.ai API
+ */
+function buildHeaders(apiKey: string | null): HeadersInit {
+  const headers: HeadersInit = {};
+  if (apiKey) {
+    headers["Authorization"] = `Key ${apiKey}`;
+  }
+  return headers;
+}
+
+/**
+ * Build category filter query string for relevant categories
+ */
+function buildCategoryFilter(): string {
+  return RELEVANT_CATEGORIES.map((cat) => `category=${encodeURIComponent(cat)}`).join("&");
+}
+
+/**
+ * fal.ai provider implementation
+ */
+const falProvider: ProviderInterface = {
+  id: "fal",
+  name: "fal.ai",
+
+  async listModels(): Promise<ProviderModel[]> {
+    const apiKey = getApiKeyFromStorage();
+
+    try {
+      // Fetch models with category filter for relevant types
+      const url = `${FAL_API_BASE}/models?${buildCategoryFilter()}&status=active`;
+      const response = await fetch(url, {
+        headers: buildHeaders(apiKey),
+      });
+
+      if (!response.ok) {
+        throw new Error(`fal.ai API error: ${response.status}`);
+      }
+
+      const data: FalModelsResponse = await response.json();
+
+      // Filter to relevant categories and map to ProviderModel
+      return data.models.filter(isRelevantModel).map(mapToProviderModel);
+    } catch (error) {
+      console.error("[fal.ai] Failed to list models:", error);
+      return [];
+    }
+  },
+
+  async searchModels(query: string): Promise<ProviderModel[]> {
+    const apiKey = getApiKeyFromStorage();
+
+    try {
+      // Search with query and category filter
+      const url = `${FAL_API_BASE}/models?q=${encodeURIComponent(query)}&${buildCategoryFilter()}&status=active`;
+      const response = await fetch(url, {
+        headers: buildHeaders(apiKey),
+      });
+
+      if (!response.ok) {
+        throw new Error(`fal.ai API error: ${response.status}`);
+      }
+
+      const data: FalModelsResponse = await response.json();
+
+      // Filter to relevant categories and map to ProviderModel
+      return data.models.filter(isRelevantModel).map(mapToProviderModel);
+    } catch (error) {
+      console.error("[fal.ai] Failed to search models:", error);
+      return [];
+    }
+  },
+
+  async getModel(modelId: string): Promise<ProviderModel | null> {
+    const apiKey = getApiKeyFromStorage();
+
+    try {
+      // Fetch specific model by endpoint_id
+      const url = `${FAL_API_BASE}/models?endpoint_id=${encodeURIComponent(modelId)}`;
+      const response = await fetch(url, {
+        headers: buildHeaders(apiKey),
+      });
+
+      if (!response.ok) {
+        if (response.status === 404) {
+          return null;
+        }
+        throw new Error(`fal.ai API error: ${response.status}`);
+      }
+
+      const data: FalModelsResponse = await response.json();
+
+      if (data.models.length === 0) {
+        return null;
+      }
+
+      const model = data.models[0];
+
+      // Check if it's a relevant model type
+      if (!isRelevantModel(model)) {
+        console.warn(`[fal.ai] Model ${modelId} is not an image/video model`);
+        return null;
+      }
+
+      return mapToProviderModel(model);
+    } catch (error) {
+      console.error("[fal.ai] Failed to get model:", error);
+      return null;
+    }
+  },
+
+  async generate(_input: GenerationInput): Promise<GenerationOutput> {
+    // Generation will be implemented in Phase 3
+    return {
+      success: false,
+      error: "Not implemented - generation support coming in Phase 3",
+    };
+  },
+
+  isConfigured(): boolean {
+    // fal.ai works without API key (with rate limits)
+    // Return true if key exists, but note that provider is usable without it
+    return !!getApiKeyFromStorage();
+  },
+
+  getApiKey(): string | null {
+    return getApiKeyFromStorage();
+  },
+};
+
+// Self-register when module is imported
+registerProvider(falProvider);
+
+export default falProvider;