diff --git a/src/vfs/VirtualFileSystem.ts b/src/vfs/VirtualFileSystem.ts
index 0a000396..90018863 100644
--- a/src/vfs/VirtualFileSystem.ts
+++ b/src/vfs/VirtualFileSystem.ts
@@ -1274,7 +1274,20 @@ export class VirtualFileSystem implements IVirtualFileSystem {
   }
 
   /**
-   * Read directory contents
+   * @description List a directory's contents. Non-recursive (default)
+   * returns direct children only, named by basename. `recursive: true`
+   * lists every descendant at any depth (files and directories), each
+   * reported as a path RELATIVE TO THE QUERIED DIRECTORY — matching Node's
+   * `fs.readdir(dir, { recursive: true })` convention — e.g. `'sub'` and
+   * `'sub/file.txt'` for a nested file. With `withFileTypes: true`, each
+   * {@link VFSDirent}'s `name` carries that same value (relative when
+   * recursive, basename otherwise); `path` is always the absolute VFS path
+   * either way.
+   * @param path - The directory to list.
+   * @param options - `recursive`, `withFileTypes`, `filter`, `sort`,
+   *   `offset`/`limit` (pagination applies AFTER filter/sort, over the full
+   *   recursive set when `recursive: true`).
+   * @throws {VFSError} ENOTDIR when `path` is not a directory.
    */
   async readdir(path: string, options?: ReaddirOptions): Promise<string[] | VFSDirent[]> {
     await this.ensureInitialized()
@@ -1287,8 +1300,12 @@ export class VirtualFileSystem implements IVirtualFileSystem {
       throw new VFSError(VFSErrorCode.ENOTDIR, `Not a directory: ${path}`, path, 'readdir')
     }
 
-    // Get children
-    let children = await this.pathResolver.getChildren(entityId)
+    // Direct children, or every descendant at any depth. gatherDescendants()
+    // is the same graph-traversal + ONE-batch-fetch path getTreeStructure()/
+    // getDescendants() already use — no per-directory storage round trips.
+    let children = options?.recursive
+      ? await this.gatherDescendants(entityId, Infinity)
+      : await this.pathResolver.getChildren(entityId)
 
     // Apply filters
     if (options?.filter) {
@@ -1312,17 +1329,29 @@ export class VirtualFileSystem implements IVirtualFileSystem {
     // Directory access time updates caused 50-100ms GCS write on EVERY readdir
     // await this.updateAccessTime(entityId)  // ← REMOVED
 
+    // The queried directory's own canonical (already-normalized) path — the
+    // base every recursive entry's relative name is computed against. Using
+    // the resolved entity's OWN path (rather than the raw `path` argument)
+    // means no separate normalization step is needed here.
+    const baseDir = entity.metadata.path
+    const relativeToBase = (childPath: string): string => {
+      const prefix = baseDir === '/' ? '/' : `${baseDir}/`
+      return childPath.startsWith(prefix) ? childPath.slice(prefix.length) : childPath
+    }
+
     // Return appropriate format
     if (options?.withFileTypes) {
       return children.map(child => ({
-        name: child.metadata.name,
+        name: options?.recursive ? relativeToBase(child.metadata.path) : child.metadata.name,
         path: child.metadata.path,
         type: child.metadata.vfsType,
         entityId: child.id
       } as VFSDirent))
     }
 
-    return children.map(child => child.metadata.name)
+    return children.map(child =>
+      options?.recursive ? relativeToBase(child.metadata.path) : child.metadata.name
+    )
   }
 
   // ============= Metadata Operations =============
diff --git a/src/vfs/types.ts b/src/vfs/types.ts
index 9188476b..17687dd3 100644
--- a/src/vfs/types.ts
+++ b/src/vfs/types.ts
@@ -133,8 +133,17 @@ export interface VFSStats {
  * Directory entry (for readdir)
  */
 export interface VFSDirent {
+  /**
+   * The entry's basename (e.g. `'file.txt'`) when `readdir()` was called
+   * WITHOUT `recursive: true`. When `recursive: true` was set, this is
+   * instead the entry's path RELATIVE TO THE QUERIED DIRECTORY (e.g.
+   * `'sub/file.txt'` for a nested file) — the same value that would appear
+   * in the plain string-array form of a recursive `readdir()` call. `path`
+   * below always carries the absolute VFS path regardless of `recursive`,
+   * so nothing is lost either way.
+   */
   name: string
-  path: string                   // Full path
+  path: string                   // Full (absolute) VFS path — always absolute, recursive or not
   type: 'file' | 'directory' | 'symlink'
   entityId: string               // Underlying entity ID
 }
@@ -240,7 +249,15 @@ export interface ReaddirOptions {
   withFileTypes?: boolean        // Return Dirent objects
 
   // VFS-specific options
-  recursive?: boolean            // Include subdirectories
+  /**
+   * List every descendant (files and directories, all depths), not just
+   * direct children. Entries are reported as paths RELATIVE TO THE QUERIED
+   * DIRECTORY (Node's `fs.readdir(dir, { recursive: true })` convention) —
+   * a string-array result contains e.g. `'sub/file.txt'`, and with
+   * `withFileTypes: true` each `VFSDirent.name` carries that same relative
+   * path (see {@link VFSDirent}). Default: `false` (direct children only).
+   */
+  recursive?: boolean
   limit?: number                 // Max results
   offset?: number                // Skip N results
   cursor?: string                // Pagination cursor
diff --git a/tests/unit/vfs-readdir-recursive.test.ts b/tests/unit/vfs-readdir-recursive.test.ts
new file mode 100644
index 00000000..2ee8a775
--- /dev/null
+++ b/tests/unit/vfs-readdir-recursive.test.ts
@@ -0,0 +1,99 @@
+/**
+ * vfs.readdir()'s `recursive` option: typed since 7.30 but never read, so it
+ * silently behaved exactly like `recursive: false`. This pins the real,
+ * documented contract: a recursive listing returns every descendant (files
+ * AND directories, all depths) as paths RELATIVE TO THE QUERIED DIRECTORY —
+ * the same convention Node's `fs.readdir(dir, { recursive: true })` uses —
+ * for both the plain string-array form and the `withFileTypes` VFSDirent
+ * form (whose `name` carries that same relative path when recursive).
+ */
+
+import { describe, it, expect, beforeEach, afterEach } from 'vitest'
+import { Brainy } from '../../src/brainy.js'
+import type { VFSDirent } from '../../src/vfs/types.js'
+
+describe('vfs.readdir() recursive option', () => {
+  let brain: Brainy
+
+  beforeEach(async () => {
+    brain = new Brainy({
+      requireSubtype: false,
+      storage: { type: 'memory' },
+      silent: true
+    })
+    await brain.init()
+
+    // Build:
+    //   /a/b.txt
+    //   /a/sub/c.txt
+    //   /a/sub/deeper/d.txt
+    //   /a/sub2/            (empty directory)
+    await brain.vfs.writeFile('/a/b.txt', 'B')
+    await brain.vfs.writeFile('/a/sub/c.txt', 'C')
+    await brain.vfs.writeFile('/a/sub/deeper/d.txt', 'D')
+    await brain.vfs.mkdir('/a/sub2', { recursive: true })
+  })
+
+  afterEach(async () => {
+    await brain.close()
+  })
+
+  it('non-recursive (default) still returns only direct children, by basename', async () => {
+    const entries = await brain.vfs.readdir('/a') as string[]
+    expect([...entries].sort()).toEqual(['b.txt', 'sub', 'sub2'])
+  })
+
+  it('recursive: true returns every descendant as a path relative to the queried directory', async () => {
+    const entries = await brain.vfs.readdir('/a', { recursive: true }) as string[]
+    expect([...entries].sort()).toEqual([
+      'b.txt',
+      'sub',
+      'sub/c.txt',
+      'sub/deeper',
+      'sub/deeper/d.txt',
+      'sub2'
+    ])
+  })
+
+  it('recursive: true at the root has no leading slash on relative entries', async () => {
+    const entries = await brain.vfs.readdir('/', { recursive: true }) as string[]
+    expect(entries).toContain('a')
+    expect(entries).toContain('a/b.txt')
+    expect(entries).toContain('a/sub/deeper/d.txt')
+    for (const entry of entries) {
+      expect(entry.startsWith('/')).toBe(false)
+    }
+  })
+
+  it('recursive + withFileTypes: VFSDirent.name is the relative path, .path stays absolute', async () => {
+    const entries = await brain.vfs.readdir('/a', {
+      recursive: true,
+      withFileTypes: true
+    }) as VFSDirent[]
+
+    const byName = new Map(entries.map((e) => [e.name, e]))
+
+    const nested = byName.get('sub/deeper/d.txt')
+    expect(nested).toBeDefined()
+    expect(nested!.path).toBe('/a/sub/deeper/d.txt')
+    expect(nested!.type).toBe('file')
+
+    const nestedDir = byName.get('sub/deeper')
+    expect(nestedDir).toBeDefined()
+    expect(nestedDir!.path).toBe('/a/sub/deeper')
+    expect(nestedDir!.type).toBe('directory')
+
+    // Non-recursive VFSDirent behavior is unchanged: name is the basename.
+    const direct = await brain.vfs.readdir('/a', { withFileTypes: true }) as VFSDirent[]
+    const directEntry = direct.find((e) => e.path === '/a/b.txt')
+    expect(directEntry?.name).toBe('b.txt')
+  })
+
+  it('recursive + filter composes: only files survive a type filter', async () => {
+    const entries = await brain.vfs.readdir('/a', {
+      recursive: true,
+      filter: { type: 'file' }
+    }) as string[]
+    expect([...entries].sort()).toEqual(['b.txt', 'sub/c.txt', 'sub/deeper/d.txt'])
+  })
+})