diff --git a/scripts/init-db.sql b/scripts/init-db.sql
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+++ b/scripts/init-db.sql
@@ -0,0 +1,103 @@
+-- Banatie Database Initialization Script
+-- This script creates the database schema for the Banatie image generation service
+
+-- Enable UUID extension for generating UUIDs
+CREATE EXTENSION IF NOT EXISTS "uuid-ossp";
+
+-- Organizations table - for multi-tenant support
+CREATE TABLE organizations (
+    id UUID PRIMARY KEY DEFAULT uuid_generate_v4(),
+    name VARCHAR(255) NOT NULL,
+    slug VARCHAR(100) UNIQUE NOT NULL,
+    settings JSONB DEFAULT '{}',
+    created_at TIMESTAMP WITH TIME ZONE DEFAULT NOW(),
+    updated_at TIMESTAMP WITH TIME ZONE DEFAULT NOW()
+);
+
+-- Users table - users within organizations
+CREATE TABLE users (
+    id UUID PRIMARY KEY DEFAULT uuid_generate_v4(),
+    organization_id UUID REFERENCES organizations(id) ON DELETE CASCADE,
+    username VARCHAR(100) NOT NULL,
+    email VARCHAR(255),
+    role VARCHAR(50) DEFAULT 'user',
+    settings JSONB DEFAULT '{}',
+    created_at TIMESTAMP WITH TIME ZONE DEFAULT NOW(),
+    updated_at TIMESTAMP WITH TIME ZONE DEFAULT NOW(),
+    UNIQUE(organization_id, username)
+);
+
+-- Images table - metadata for generated and uploaded images
+CREATE TABLE images (
+    id UUID PRIMARY KEY DEFAULT uuid_generate_v4(),
+    user_id UUID REFERENCES users(id) ON DELETE CASCADE,
+    filename VARCHAR(255) NOT NULL,
+    file_path VARCHAR(500),                -- Legacy: local file path (for backward compatibility)
+    minio_key VARCHAR(500),                -- MinIO object key
+    url VARCHAR(1000),                     -- Public or presigned URL to access the image
+    original_prompt TEXT,
+    enhanced_prompt TEXT,
+    model_used VARCHAR(100),
+    file_size BIGINT,
+    content_type VARCHAR(100),
+    category VARCHAR(50) DEFAULT 'generated', -- 'generated', 'references', 'temp'
+    metadata JSONB DEFAULT '{}',
+    created_at TIMESTAMP WITH TIME ZONE DEFAULT NOW(),
+    updated_at TIMESTAMP WITH TIME ZONE DEFAULT NOW()
+);
+
+-- Sessions table - for tracking user upload sessions
+CREATE TABLE upload_sessions (
+    id UUID PRIMARY KEY DEFAULT uuid_generate_v4(),
+    user_id UUID REFERENCES users(id) ON DELETE CASCADE,
+    session_data JSONB NOT NULL,
+    expires_at TIMESTAMP WITH TIME ZONE,
+    created_at TIMESTAMP WITH TIME ZONE DEFAULT NOW()
+);
+
+-- Create indexes for better query performance
+CREATE INDEX idx_users_org_id ON users(organization_id);
+CREATE INDEX idx_users_username ON users(username);
+CREATE INDEX idx_images_user_id ON images(user_id);
+CREATE INDEX idx_images_created_at ON images(created_at);
+CREATE INDEX idx_images_category ON images(category);
+CREATE INDEX idx_images_minio_key ON images(minio_key);
+CREATE INDEX idx_upload_sessions_user_id ON upload_sessions(user_id);
+CREATE INDEX idx_upload_sessions_expires_at ON upload_sessions(expires_at);
+
+-- Insert demo organization and user for development/testing
+INSERT INTO organizations (id, name, slug, settings) VALUES
+    ('00000000-0000-0000-0000-000000000001', 'Demo Organization', 'demo', '{"description": "Default demo organization for testing"}');
+
+INSERT INTO users (id, organization_id, username, email, role, settings) VALUES
+    ('00000000-0000-0000-0000-000000000001', '00000000-0000-0000-0000-000000000001', 'guest', 'guest@demo.banatie.app', 'user', '{"description": "Default guest user for testing"}');
+
+-- Create a function to update updated_at timestamp
+CREATE OR REPLACE FUNCTION update_updated_at_column()
+RETURNS TRIGGER AS $$
+BEGIN
+    NEW.updated_at = NOW();
+    RETURN NEW;
+END;
+$$ language 'plpgsql';
+
+-- Create triggers to automatically update updated_at
+CREATE TRIGGER update_organizations_updated_at
+    BEFORE UPDATE ON organizations
+    FOR EACH ROW EXECUTE FUNCTION update_updated_at_column();
+
+CREATE TRIGGER update_users_updated_at
+    BEFORE UPDATE ON users
+    FOR EACH ROW EXECUTE FUNCTION update_updated_at_column();
+
+CREATE TRIGGER update_images_updated_at
+    BEFORE UPDATE ON images
+    FOR EACH ROW EXECUTE FUNCTION update_updated_at_column();
+
+-- Display initialization completion message
+DO $$
+BEGIN
+    RAISE NOTICE 'Banatie database initialization completed successfully!';
+    RAISE NOTICE 'Created tables: organizations, users, images, upload_sessions';
+    RAISE NOTICE 'Created demo organization (id: 00000000-0000-0000-0000-000000000001) with guest user';
+END $$;
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