diff --git a/frontend/src/components/Layout.tsx b/frontend/src/components/Layout.tsx
index 240c35d..98f135b 100644
--- a/frontend/src/components/Layout.tsx
+++ b/frontend/src/components/Layout.tsx
@@ -18,31 +18,76 @@ import {
   SquareStack,
   Sun,
   Users,
+  type LucideIcon,
 } from "lucide-react";
 import { useEffect } from "react";
 
 import { token } from "../api/client";
 import { useTheme } from "../stores/theme";
 
-const nav = [
-  { to: "/", label: "Dashboard", icon: LayoutDashboard },
-  { to: "/clusters", label: "Clusters", icon: Server },
-  { to: "/nodes", label: "Nodes", icon: Activity },
-  { to: "/workloads", label: "VMs/LXCs", icon: Blocks },
-  { to: "/networks", label: "Networks", icon: Network },
-  { to: "/ipam", label: "IPAM", icon: Database },
-  { to: "/tenants", label: "Tenants", icon: BriefcaseBusiness },
-  { to: "/security-groups", label: "Security Groups", icon: Shield },
-  { to: "/policies", label: "Policies", icon: GitBranch },
-  { to: "/services", label: "Service Catalog", icon: SquareStack },
-  { to: "/designer", label: "Policy Designer", icon: LockKeyhole },
-  { to: "/firewall", label: "Firewall Preview", icon: Flame },
+const navGroups = [
+  {
+    label: "Operate",
+    items: [
+      { to: "/", label: "Dashboard", icon: LayoutDashboard },
+      { to: "/clusters", label: "Clusters", icon: Server },
+      { to: "/nodes", label: "Nodes", icon: Activity },
+      { to: "/workloads", label: "VMs/LXCs", icon: Blocks },
+    ],
+  },
+  {
+    label: "Network",
+    items: [
+      { to: "/networks", label: "Networks", icon: Network },
+      { to: "/ipam", label: "IPAM", icon: Database },
+      { to: "/services", label: "Service Catalog", icon: SquareStack },
+      { to: "/tenants", label: "Tenants", icon: BriefcaseBusiness },
+    ],
+  },
+  {
+    label: "Security",
+    items: [
+      { to: "/security-groups", label: "Security Groups", icon: Shield },
+      { to: "/policies", label: "Policies", icon: GitBranch },
+      { to: "/designer", label: "Policy Designer", icon: LockKeyhole },
+      { to: "/firewall", label: "Firewall Preview", icon: Flame },
+    ],
+  },
+];
+
+const systemNav = [
   { to: "/jobs", label: "Jobs", icon: ClipboardList },
   { to: "/audit", label: "Audit Logs", icon: BookOpen },
   { to: "/users", label: "Users", icon: Users },
   { to: "/settings", label: "Settings", icon: Settings },
 ];
 
+function SidebarLink({ item }: { item: { to: string; label: string; icon: LucideIcon } }) {
+  const Icon = item.icon;
+  return (
+    <NavLink
+      key={item.to}
+      to={item.to}
+      end={item.to === "/"}
+      className={({ isActive }) =>
+        `group relative flex h-9 items-center gap-3 rounded-md px-3 text-sm transition-colors ${
+          isActive
+            ? "bg-accent/10 text-accent dark:bg-accent/15"
+            : "text-slate-600 hover:bg-slate-100 hover:text-slate-950 dark:text-slate-300 dark:hover:bg-slate-800/80 dark:hover:text-white"
+        }`
+      }
+    >
+      {({ isActive }) => (
+        <>
+          <span className={`absolute left-0 h-5 w-0.5 rounded-r-full ${isActive ? "bg-accent" : "bg-transparent"}`} />
+          <Icon size={17} className={isActive ? "text-accent" : "text-slate-400 group-hover:text-slate-700 dark:group-hover:text-slate-200"} />
+          <span className="truncate">{item.label}</span>
+        </>
+      )}
+    </NavLink>
+  );
+}
+
 export function Layout() {
   const navigate = useNavigate();
   const { dark, toggle } = useTheme();
@@ -60,29 +105,31 @@ export function Layout() {
     <div className="min-h-screen bg-canvas text-slate-900 dark:text-slate-100">
       <aside className="fixed inset-y-0 left-0 hidden w-64 border-r border-border bg-panel md:block">
         <div className="flex h-16 items-center border-b border-border px-5">
-          <div>
-            <div className="text-lg font-semibold">NexaFabric</div>
-            <div className="text-xs text-slate-500 dark:text-slate-400">Control Plane</div>
+          <div className="flex items-center gap-3">
+            <div className="grid h-9 w-9 place-items-center rounded-md bg-accent text-sm font-semibold text-white">NF</div>
+            <div>
+              <div className="text-base font-semibold leading-5">NexaFabric</div>
+              <div className="text-xs text-slate-500 dark:text-slate-400">Control Plane</div>
+            </div>
           </div>
         </div>
-        <nav className="h-[calc(100vh-4rem)] overflow-y-auto p-3">
-          {nav.map((item) => {
-            const Icon = item.icon;
-            return (
-              <NavLink
-                key={item.to}
-                to={item.to}
-                className={({ isActive }) =>
-                  `mb-1 flex h-10 items-center gap-3 rounded-md px-3 text-sm ${
-                    isActive ? "bg-accent text-white" : "text-slate-600 hover:bg-slate-100 dark:text-slate-300 dark:hover:bg-slate-800"
-                  }`
-                }
-              >
-                <Icon size={18} />
-                <span>{item.label}</span>
-              </NavLink>
-            );
-          })}
+        <nav className="flex h-[calc(100vh-4rem)] flex-col overflow-y-auto p-3">
+          <div className="space-y-5">
+            {navGroups.map((group) => (
+              <section key={group.label}>
+                <div className="mb-2 px-3 text-[11px] font-semibold uppercase tracking-wider text-slate-400 dark:text-slate-500">{group.label}</div>
+                <div className="space-y-1">
+                  {group.items.map((item) => <SidebarLink key={item.to} item={item} />)}
+                </div>
+              </section>
+            ))}
+          </div>
+          <div className="mt-auto border-t border-border pt-3">
+            <div className="mb-2 px-3 text-[11px] font-semibold uppercase tracking-wider text-slate-400 dark:text-slate-500">System</div>
+            <div className="space-y-1">
+              {systemNav.map((item) => <SidebarLink key={item.to} item={item} />)}
+            </div>
+          </div>
         </nav>
       </aside>
       <main className="md:pl-64">