diff --git a/src/core/__init__.py b/src/core/__init__.py
new file mode 100644
index 0000000..53d4f84
--- /dev/null
+++ b/src/core/__init__.py
@@ -0,0 +1 @@
+"""Core layer — config, dependencies, exceptions, and shared models."""
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diff --git a/src/core/config.py b/src/core/config.py
new file mode 100644
index 0000000..feb1845
--- /dev/null
+++ b/src/core/config.py
@@ -0,0 +1,39 @@
+"""Application configuration loaded from .env via pydantic-settings."""
+
+from pydantic_settings import BaseSettings, SettingsConfigDict
+
+
+class Settings(BaseSettings):
+    """All environment variables with defaults and validation."""
+
+    model_config = SettingsConfigDict(env_file=".env", env_file_encoding="utf-8")
+
+    # OpenAI
+    openai_api_key: str
+    embedding_model: str = "text-embedding-3-small"
+    llm_model: str = "gpt-4o-mini"
+
+    # Qdrant
+    qdrant_url: str = "http://localhost:6333"
+    qdrant_api_key: str | None = None
+
+    # Retrieval
+    top_k: int = 5
+
+    # LLM generation
+    temperature: float = 0.0
+    max_tokens: int = 1024
+
+    # Chunking defaults
+    chunk_size: int = 512
+    chunk_overlap: int = 50
+
+    # Semantic chunking
+    semantic_threshold: float = 0.3
+    semantic_min_chunk_size: int = 3
+
+    # Database
+    database_url: str = "sqlite:///./data/chunking_benchmark.db"
+
+
+settings = Settings()
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diff --git a/src/core/dependencies.py b/src/core/dependencies.py
new file mode 100644
index 0000000..427eb6d
--- /dev/null
+++ b/src/core/dependencies.py
@@ -0,0 +1,20 @@
+"""Dependency injection singletons for OpenAI and Qdrant clients."""
+
+from functools import lru_cache
+
+from openai import OpenAI
+from qdrant_client import QdrantClient
+
+from src.core.config import settings
+
+
+@lru_cache()
+def get_openai_client() -> OpenAI:
+    """Return a cached OpenAI client singleton."""
+    return OpenAI(api_key=settings.openai_api_key)
+
+
+@lru_cache()
+def get_qdrant_client() -> QdrantClient:
+    """Return a cached Qdrant client singleton."""
+    return QdrantClient(url=settings.qdrant_url, api_key=settings.qdrant_api_key)
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diff --git a/src/core/exceptions.py b/src/core/exceptions.py
new file mode 100644
index 0000000..ae944e6
--- /dev/null
+++ b/src/core/exceptions.py
@@ -0,0 +1,52 @@
+"""Custom exception classes and FastAPI exception handlers."""
+
+from fastapi import Request
+from fastapi.responses import JSONResponse
+
+
+class ChunkingError(Exception):
+    """Base exception for chunking-related errors."""
+
+
+class StrategyNotFoundError(ChunkingError):
+    """Raised when an unknown strategy name is requested."""
+
+
+class DocumentProcessingError(ChunkingError):
+    """Raised when a document cannot be parsed or processed."""
+
+
+class EnrichmentError(ChunkingError):
+    """Raised when the contextual enrichment LLM call fails."""
+
+
+class EmbeddingError(ChunkingError):
+    """Raised when the OpenAI embedding API call fails."""
+
+
+class QdrantError(ChunkingError):
+    """Raised when a Qdrant operation fails."""
+
+
+class BenchmarkError(Exception):
+    """Base exception for benchmarking-related errors."""
+
+
+class DryRunError(BenchmarkError):
+    """Raised when a dry-run estimation fails."""
+
+
+async def chunking_exception_handler(request: Request, exc: ChunkingError) -> JSONResponse:
+    """Handle all chunking-related errors."""
+    return JSONResponse(
+        status_code=400,
+        content={"detail": str(exc), "type": type(exc).__name__},
+    )
+
+
+async def benchmark_exception_handler(request: Request, exc: BenchmarkError) -> JSONResponse:
+    """Handle all benchmarking-related errors."""
+    return JSONResponse(
+        status_code=400,
+        content={"detail": str(exc), "type": type(exc).__name__},
+    )
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diff --git a/src/core/models.py b/src/core/models.py
new file mode 100644
index 0000000..a1e0a45
--- /dev/null
+++ b/src/core/models.py
@@ -0,0 +1,59 @@
+"""Shared Pydantic models used across all domains."""
+
+from enum import Enum
+from typing import Optional
+
+from pydantic import BaseModel, Field
+
+
+class StrategyName(str, Enum):
+    """Canonical identifiers for each chunking strategy."""
+
+    CONTEXTUAL_STRUCTURE = "contextual_structure"
+    PARENT_CHILD = "parent_child"
+    SEMANTIC = "semantic"
+    MARKDOWN_STRUCTURE = "markdown_structure"
+    RECURSIVE = "recursive"
+
+
+class Chunk(BaseModel):
+    """Unified chunk model returned by all five chunking strategies.
+
+    Strategy-specific fields (parent_id, enriched_content) are nullable
+    when not applicable to the strategy that produced the chunk.
+    """
+
+    document_name: str
+    chunk_id: str
+    strategy_name: StrategyName
+    chunk_index: int
+    text: str
+    token_count: int
+    character_count: int
+    parent_id: Optional[str] = None
+    enriched_content: Optional[str] = None
+
+
+class ChunkMetadata(BaseModel):
+    """Payload stored alongside every chunk vector in Qdrant."""
+
+    document_name: str
+    chunk_id: str
+    strategy_name: StrategyName
+    chunk_index: int
+    token_count: int
+    character_count: int
+    parent_id: Optional[str] = None
+
+
+def chunk_to_metadata(chunk: Chunk) -> ChunkMetadata:
+    """Extract metadata payload from a Chunk for Qdrant storage."""
+    return ChunkMetadata(
+        document_name=chunk.document_name,
+        chunk_id=chunk.chunk_id,
+        strategy_name=chunk.strategy_name,
+        chunk_index=chunk.chunk_index,
+        token_count=chunk.token_count,
+        character_count=chunk.character_count,
+        parent_id=chunk.parent_id,
+    )
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diff --git a/src/main.py b/src/main.py
new file mode 100644
index 0000000..59dc158
--- /dev/null
+++ b/src/main.py
@@ -0,0 +1,43 @@
+"""FastAPI app factory. Composes all domain routers and middleware."""
+
+from fastapi import FastAPI
+from fastapi.middleware.cors import CORSMiddleware
+
+from src.core.exceptions import (
+    ChunkingError,
+    BenchmarkError,
+    chunking_exception_handler,
+    benchmark_exception_handler,
+)
+
+
+def create_app() -> FastAPI:
+    """Create and configure the FastAPI application.
+
+    Mounts domain routers and registers exception handlers.
+    Routers are imported lazily — domains are added in later phases.
+    """
+    app = FastAPI(
+        title="RAG Chunking Benchmarker",
+        description="Benchmark five chunking strategies on regulatory documents. "
+        "Compare retrieval quality, answer faithfulness, and cost.",
+        version="0.1.0",
+    )
+
+    # CORS — allow all origins for development
+    app.add_middleware(
+        CORSMiddleware,
+        allow_origins=["*"],
+        allow_credentials=True,
+        allow_methods=["*"],
+        allow_headers=["*"],
+    )
+
+    # Register exception handlers
+    app.add_exception_handler(ChunkingError, chunking_exception_handler)
+    app.add_exception_handler(BenchmarkError, benchmark_exception_handler)
+
+    return app
+
+
+app = create_app()
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