diff --git a/.gitmodules b/.gitmodules
index 0f710637..576d0353 100644
--- a/.gitmodules
+++ b/.gitmodules
@@ -2,6 +2,6 @@
 	path = wiki
 	url = http://92.205.130.254:32166/coulomb/markitect_project.wiki.git
 	branch = main
-[submodule "issue-facade"]
-	path = issue-facade
+[submodule "capabilities/issue-facade"]
+	path = capabilities/issue-facade
 	url = http://92.205.130.254:32166/coulomb/issue-facade.git
diff --git a/CAPABILITY_INCLUSION_GUIDE.md b/CAPABILITY_INCLUSION_GUIDE.md
index 291efce4..875ac121 100644
--- a/CAPABILITY_INCLUSION_GUIDE.md
+++ b/CAPABILITY_INCLUSION_GUIDE.md
@@ -75,7 +75,7 @@ markitect/cli/           # CLI framework capability
 #### 1. **Submodule Capabilities** (Independent Repositories)
 - **Pattern**: Git submodules pointing to external repositories
 - **Benefits**: Independent versioning, separate development, easy updates
-- **Examples**: `issue-facade/`, `wiki/`
+- **Examples**: `capabilities/issue-facade/`, `wiki/`
 
 #### 2. **Local Extracted Capabilities** (Previously Internal, Now Separated)
 - **Pattern**: Moved to `capabilities/` directory but still in this repo
@@ -125,7 +125,7 @@ Extract capability → Choose inclusion pattern → Update registries
 Internal → markitect/issues/ (internal issue management)
 Evaluation → Self-contained, reusable, independent development needed
 Extraction → coulomb/issue-facade (separate repository)
-Inclusion → issue-facade/ (submodule capability)
+Inclusion → capabilities/issue-facade/ (submodule capability)
 Registration → CAPABILITY_REGISTRY.md updated
 ```
 
@@ -146,11 +146,11 @@ markitect/                    # Core repository
 
 ### External Capabilities (4 documented in CAPABILITY_REGISTRY.md)
 ```
-issue-facade/                 # Submodule: Universal issue tracking
-wiki/                        # Submodule: Documentation
 capabilities/
+├── issue-facade/            # Submodule: Universal issue tracking
 ├── markitect-content/       # Local: Content processing
 └── markitect-utils/         # Local: Utility functions
+wiki/                        # Submodule: Documentation
 [External dependencies: click, pytest, sqlalchemy, ...]
 ```
 
diff --git a/CAPABILITY_REGISTRY.md b/CAPABILITY_REGISTRY.md
index c6c85fc3..323dc6c9 100644
--- a/CAPABILITY_REGISTRY.md
+++ b/CAPABILITY_REGISTRY.md
@@ -25,11 +25,11 @@ Third-party packages providing specific capabilities via pip/pypi.
 
 ### Universal Issue Management
 - **Type**: Submodule Capability
-- **Location**: `issue-facade/`
+- **Location**: `capabilities/issue-facade/`
 - **Repository**: `coulomb/issue-facade`
 - **Purpose**: Backend-agnostic issue tracking with unified CLI
 - **Interfaces**:
-  - CLI: `cd issue-facade && python -m cli.main [command]`
+  - CLI: `cd capabilities/issue-facade && python -m cli.main [command]`
   - API: Core models, backends (local SQLite, Gitea, GitHub, GitLab)
 - **Usage Guidelines**:
   - ✅ **USE**: For all issue management tasks
@@ -95,7 +95,7 @@ Third-party packages providing specific capabilities via pip/pypi.
 ### Submodule Integration
 ```bash
 # Issue management
-cd issue-facade && python -m cli.main list
+cd capabilities/issue-facade && python -m cli.main list
 
 # Documentation updates
 cd wiki && git pull origin main
@@ -137,7 +137,7 @@ import pytest  # Testing framework
 - **Utilities**: Check `markitect-utils` before creating new utility functions
 
 ### Integration Commands:
-- **Issue Operations**: `cd issue-facade && python -m cli.main [command]`
+- **Issue Operations**: `cd capabilities/issue-facade && python -m cli.main [command]`
 - **Content Analysis**: Import from `capabilities.markitect_content`
 - **Utility Functions**: Import from `capabilities.markitect_utils`
 - **Documentation**: Reference files in `wiki/`
diff --git a/agents/agent-project-management.md b/agents/agent-project-management.md
index e82968ef..616e7cad 100644
--- a/agents/agent-project-management.md
+++ b/agents/agent-project-management.md
@@ -48,7 +48,7 @@ You are the MarkiTect project assistant, specialized in providing project status
 - **Issue Workflow**: Create → Triage → Plan → Schedule → Implement → Close
 
 **TDD Workflow Management:**
-- For issue management tasks, use the **issue-facade** system located in `issue-facade/`
+- For issue management tasks, use the **issue-facade** system located in `capabilities/issue-facade/`
 - The issue-facade provides unified CLI for GitHub, GitLab, Gitea, and local SQLite backends
 - This includes sidequest management, test planning, and comprehensive development workflow guidance
 
diff --git a/agents/agent-requirements-engineering.md b/agents/agent-requirements-engineering.md
index 134d7cdb..f83799e8 100644
--- a/agents/agent-requirements-engineering.md
+++ b/agents/agent-requirements-engineering.md
@@ -117,7 +117,7 @@ python tools/requirements_engineering_toolkit.py validate-mocks --test-file test
 # Enhanced Makefile targets
 issue-start: validate-requirements
 	# Use issue-facade for issue management
-	cd issue-facade && python -m cli.main show $(NUM)
+	cd capabilities/issue-facade && python -m cli.main show $(NUM)
 
 validate-requirements:
 	python tools/requirements_engineering_toolkit.py analyze
@@ -456,7 +456,7 @@ validate-requirements:
 
 issue-start: validate-requirements
 	# Use issue-facade for issue management
-	cd issue-facade && python -m cli.main show $(NUM)
+	cd capabilities/issue-facade && python -m cli.main show $(NUM)
 ```
 
 ### Tool Dependencies
diff --git a/agents/agent-tdd-workflow.md b/agents/agent-tdd-workflow.md
index faefc2bf..892aa4f9 100644
--- a/agents/agent-tdd-workflow.md
+++ b/agents/agent-tdd-workflow.md
@@ -99,10 +99,10 @@ The **TDD8 cycle** is an 8-step comprehensive development workflow that extends
 You are the authoritative guide for the TDD8 workflow using the issue-facade system for issue management. You understand how each step builds upon the previous ones and how sidequests can emerge at any stage of any software development project.
 
 **Primary Issue Management Commands:**
-- Issue management via issue-facade: `cd issue-facade && python -m cli.main list`
-- `cd issue-facade && python -m cli.main show ISSUE_NUM` - Show issue details
-- `cd issue-facade && python -m cli.main create "Title" "Description"` - Create new issue
-- `cd issue-facade && python -m cli.main close ISSUE_NUM` - Close completed issue
+- Issue management via issue-facade: `cd capabilities/issue-facade && python -m cli.main list`
+- `cd capabilities/issue-facade && python -m cli.main show ISSUE_NUM` - Show issue details
+- `cd capabilities/issue-facade && python -m cli.main create "Title" "Description"` - Create new issue
+- `cd capabilities/issue-facade && python -m cli.main close ISSUE_NUM` - Close completed issue
 
 **Capability Awareness:**
 - **Before implementing**: Check `CAPABILITY_REGISTRY.md` for existing functionality
@@ -116,7 +116,7 @@ You are the authoritative guide for the TDD8 workflow using the issue-facade sys
 - Tea CLI: `tea issue show NUM` - Show detailed view of specific issue
 
 ### Workspace Management Understanding
-You understand the project structure with issue-facade for issue management:
+You understand the project structure with capabilities/issue-facade for issue management:
 ```
 {workspace_dir}/
 ├── current_issue.json          # Active issue metadata
@@ -157,7 +157,7 @@ You understand the project structure with issue-facade for issue management:
 
 ### TDDAi Framework Components
 **Core Infrastructure:**
-- `issue-facade/` - Universal issue management facade
+- `capabilities/issue-facade/` - Universal issue management facade
   - `workspace.py` - Workspace management
   - `issue_fetcher.py` - Issue API integration
   - `issue_writer.py` - Issue updates via PATCH
diff --git a/issue-facade b/capabilities/issue-facade
similarity index 100%
rename from issue-facade
rename to capabilities/issue-facade