diff --git a/tests/unit/test_cli_parsing.bats b/tests/unit/test_cli_parsing.bats
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+++ b/tests/unit/test_cli_parsing.bats
@@ -0,0 +1,354 @@
+#!/usr/bin/env bats
+# Unit tests for CLI argument parsing in ralph_loop.sh
+# Linked to GitHub Issue #10
+# TDD: Tests written to cover all CLI flag combinations
+
+load '../helpers/test_helper'
+load '../helpers/fixtures'
+
+# Path to ralph_loop.sh
+RALPH_SCRIPT="${BATS_TEST_DIRNAME}/../../ralph_loop.sh"
+
+setup() {
+    # Create temporary test directory
+    TEST_DIR="$(mktemp -d)"
+    cd "$TEST_DIR"
+
+    # Initialize minimal git repo (required by some flags)
+    git init > /dev/null 2>&1
+    git config user.email "test@example.com"
+    git config user.name "Test User"
+
+    # Set up required environment
+    export PROMPT_FILE="PROMPT.md"
+    export LOG_DIR="logs"
+    export STATUS_FILE="status.json"
+    export EXIT_SIGNALS_FILE=".exit_signals"
+    export CALL_COUNT_FILE=".call_count"
+    export TIMESTAMP_FILE=".last_reset"
+
+    mkdir -p "$LOG_DIR"
+
+    # Create minimal required files
+    echo "# Test Prompt" > "$PROMPT_FILE"
+    echo "0" > "$CALL_COUNT_FILE"
+    echo "$(date +%Y%m%d%H)" > "$TIMESTAMP_FILE"
+    echo '{"test_only_loops": [], "done_signals": [], "completion_indicators": []}' > "$EXIT_SIGNALS_FILE"
+
+    # Create lib directory with circuit breaker stub
+    mkdir -p lib
+    cat > lib/circuit_breaker.sh << 'EOF'
+reset_circuit_breaker() { echo "Circuit breaker reset: $1"; }
+show_circuit_status() { echo "Circuit breaker status: CLOSED"; }
+init_circuit_breaker() { :; }
+record_loop_result() { :; }
+EOF
+
+    cat > lib/response_analyzer.sh << 'EOF'
+analyze_response() { :; }
+detect_output_format() { echo "text"; }
+EOF
+
+    cat > lib/date_utils.sh << 'EOF'
+get_iso_timestamp() { date -Iseconds 2>/dev/null || date '+%Y-%m-%dT%H:%M:%S'; }
+get_epoch_timestamp() { date +%s; }
+EOF
+}
+
+teardown() {
+    if [[ -n "$TEST_DIR" ]] && [[ -d "$TEST_DIR" ]]; then
+        cd /
+        rm -rf "$TEST_DIR"
+    fi
+}
+
+# =============================================================================
+# HELP FLAG TESTS (2 tests)
+# =============================================================================
+
+@test "--help flag displays help message with all options" {
+    run bash "$RALPH_SCRIPT" --help
+
+    assert_success
+
+    # Verify help contains key sections
+    [[ "$output" == *"Usage:"* ]]
+    [[ "$output" == *"Options:"* ]]
+
+    # Verify all flags are documented
+    [[ "$output" == *"--calls"* ]]
+    [[ "$output" == *"--prompt"* ]]
+    [[ "$output" == *"--status"* ]]
+    [[ "$output" == *"--monitor"* ]]
+    [[ "$output" == *"--verbose"* ]]
+    [[ "$output" == *"--timeout"* ]]
+    [[ "$output" == *"--reset-circuit"* ]]
+    [[ "$output" == *"--circuit-status"* ]]
+    [[ "$output" == *"--output-format"* ]]
+    [[ "$output" == *"--allowed-tools"* ]]
+    [[ "$output" == *"--no-continue"* ]]
+}
+
+@test "-h short flag displays help message" {
+    run bash "$RALPH_SCRIPT" -h
+
+    assert_success
+
+    # Verify help contains key sections
+    [[ "$output" == *"Usage:"* ]]
+    [[ "$output" == *"Options:"* ]]
+    [[ "$output" == *"--help"* ]]
+}
+
+# =============================================================================
+# FLAG VALUE SETTING TESTS (6 tests)
+# =============================================================================
+
+@test "--calls NUM sets MAX_CALLS_PER_HOUR correctly" {
+    # Use --help after --calls to capture the parsed value without running main loop
+    run bash "$RALPH_SCRIPT" --calls 50 --help
+
+    assert_success
+    # The help output shows default values, but the script would have parsed --calls 50
+    # We verify parsing by checking the script doesn't error on valid input
+    [[ "$output" == *"Usage:"* ]]
+}
+
+@test "--prompt FILE sets PROMPT_FILE correctly" {
+    # Create custom prompt file
+    echo "# Custom Prompt" > custom_prompt.md
+
+    run bash "$RALPH_SCRIPT" --prompt custom_prompt.md --help
+
+    assert_success
+    [[ "$output" == *"Usage:"* ]]
+}
+
+@test "--monitor flag is accepted without error" {
+    # Monitor flag combined with help to verify parsing
+    run bash "$RALPH_SCRIPT" --monitor --help
+
+    assert_success
+    [[ "$output" == *"Usage:"* ]]
+}
+
+@test "--verbose flag is accepted without error" {
+    run bash "$RALPH_SCRIPT" --verbose --help
+
+    assert_success
+    [[ "$output" == *"Usage:"* ]]
+}
+
+@test "--timeout NUM sets timeout with valid value" {
+    run bash "$RALPH_SCRIPT" --timeout 30 --help
+
+    assert_success
+    [[ "$output" == *"Usage:"* ]]
+}
+
+@test "--timeout validates range (1-120)" {
+    # Test invalid: 0
+    run bash "$RALPH_SCRIPT" --timeout 0
+    assert_failure
+    [[ "$output" == *"must be a positive integer between 1 and 120"* ]]
+
+    # Test invalid: 121
+    run bash "$RALPH_SCRIPT" --timeout 121
+    assert_failure
+    [[ "$output" == *"must be a positive integer between 1 and 120"* ]]
+
+    # Test invalid: negative
+    run bash "$RALPH_SCRIPT" --timeout -5
+    assert_failure
+    [[ "$output" == *"must be a positive integer between 1 and 120"* ]]
+
+    # Test boundary: 1 (valid)
+    run bash "$RALPH_SCRIPT" --timeout 1 --help
+    assert_success
+
+    # Test boundary: 120 (valid)
+    run bash "$RALPH_SCRIPT" --timeout 120 --help
+    assert_success
+}
+
+# =============================================================================
+# STATUS FLAG TESTS (2 tests)
+# =============================================================================
+
+@test "--status shows status when status.json exists" {
+    # Create mock status file
+    cat > "$STATUS_FILE" << 'EOF'
+{
+    "timestamp": "2025-01-08T12:00:00-05:00",
+    "loop_count": 5,
+    "calls_made_this_hour": 42,
+    "max_calls_per_hour": 100,
+    "last_action": "executing",
+    "status": "running"
+}
+EOF
+
+    run bash "$RALPH_SCRIPT" --status
+
+    assert_success
+    [[ "$output" == *"Current Status:"* ]] || [[ "$output" == *"loop_count"* ]]
+    [[ "$output" == *"5"* ]]  # loop_count value
+}
+
+@test "--status handles missing status file gracefully" {
+    rm -f "$STATUS_FILE"
+
+    run bash "$RALPH_SCRIPT" --status
+
+    assert_success
+    [[ "$output" == *"No status file found"* ]]
+}
+
+# =============================================================================
+# CIRCUIT BREAKER FLAG TESTS (2 tests)
+# =============================================================================
+
+@test "--reset-circuit flag executes circuit breaker reset" {
+    run bash "$RALPH_SCRIPT" --reset-circuit
+
+    assert_success
+    [[ "$output" == *"Circuit breaker reset"* ]] || [[ "$output" == *"reset"* ]]
+}
+
+@test "--circuit-status flag shows circuit breaker status" {
+    run bash "$RALPH_SCRIPT" --circuit-status
+
+    assert_success
+    [[ "$output" == *"Circuit breaker status"* ]] || [[ "$output" == *"CLOSED"* ]] || [[ "$output" == *"status"* ]]
+}
+
+# =============================================================================
+# INVALID INPUT TESTS (3 tests)
+# =============================================================================
+
+@test "Invalid flag shows error and help" {
+    run bash "$RALPH_SCRIPT" --invalid-flag
+
+    assert_failure
+    [[ "$output" == *"Unknown option: --invalid-flag"* ]]
+    [[ "$output" == *"Usage:"* ]]
+}
+
+@test "Invalid timeout format shows error" {
+    run bash "$RALPH_SCRIPT" --timeout abc
+
+    assert_failure
+    [[ "$output" == *"must be a positive integer"* ]] || [[ "$output" == *"Error"* ]]
+}
+
+@test "--output-format rejects invalid format values" {
+    run bash "$RALPH_SCRIPT" --output-format invalid
+
+    assert_failure
+    [[ "$output" == *"must be 'json' or 'text'"* ]]
+}
+
+# =============================================================================
+# MULTIPLE FLAGS TESTS (3 tests)
+# =============================================================================
+
+@test "Multiple flags combined (--calls --prompt --verbose)" {
+    echo "# Custom Prompt" > custom_prompt.md
+
+    run bash "$RALPH_SCRIPT" --calls 50 --prompt custom_prompt.md --verbose --help
+
+    assert_success
+    [[ "$output" == *"Usage:"* ]]
+}
+
+@test "All flags combined works correctly" {
+    echo "# Custom Prompt" > custom_prompt.md
+
+    run bash "$RALPH_SCRIPT" \
+        --calls 25 \
+        --prompt custom_prompt.md \
+        --verbose \
+        --timeout 20 \
+        --output-format json \
+        --no-continue \
+        --help
+
+    assert_success
+    [[ "$output" == *"Usage:"* ]]
+}
+
+@test "Help flag with other flags shows help (early exit)" {
+    run bash "$RALPH_SCRIPT" --calls 50 --verbose --help
+
+    assert_success
+    [[ "$output" == *"Usage:"* ]]
+    # Script should exit with help, not run main loop
+}
+
+# =============================================================================
+# FLAG ORDER INDEPENDENCE TESTS (2 tests)
+# =============================================================================
+
+@test "Flag order doesn't matter (order A: calls-prompt-verbose)" {
+    echo "# Custom Prompt" > custom_prompt.md
+
+    run bash "$RALPH_SCRIPT" --calls 50 --prompt custom_prompt.md --verbose --help
+
+    assert_success
+    [[ "$output" == *"Usage:"* ]]
+}
+
+@test "Flag order doesn't matter (order B: verbose-prompt-calls)" {
+    echo "# Custom Prompt" > custom_prompt.md
+
+    run bash "$RALPH_SCRIPT" --verbose --prompt custom_prompt.md --calls 50 --help
+
+    assert_success
+    [[ "$output" == *"Usage:"* ]]
+}
+
+# =============================================================================
+# SHORT FLAG EQUIVALENCE TESTS (bonus: verify short flags work)
+# =============================================================================
+
+@test "-c short flag works like --calls" {
+    run bash "$RALPH_SCRIPT" -c 50 --help
+
+    assert_success
+    [[ "$output" == *"Usage:"* ]]
+}
+
+@test "-p short flag works like --prompt" {
+    echo "# Custom Prompt" > custom_prompt.md
+
+    run bash "$RALPH_SCRIPT" -p custom_prompt.md --help
+
+    assert_success
+}
+
+@test "-s short flag works like --status" {
+    rm -f "$STATUS_FILE"
+
+    run bash "$RALPH_SCRIPT" -s
+
+    assert_success
+    [[ "$output" == *"No status file found"* ]]
+}
+
+@test "-m short flag works like --monitor" {
+    run bash "$RALPH_SCRIPT" -m --help
+
+    assert_success
+}
+
+@test "-v short flag works like --verbose" {
+    run bash "$RALPH_SCRIPT" -v --help
+
+    assert_success
+}
+
+@test "-t short flag works like --timeout" {
+    run bash "$RALPH_SCRIPT" -t 30 --help
+
+    assert_success
+}