diff --git a/README.md b/README.md
index b8f0bad..c703552 100644
--- a/README.md
+++ b/README.md
@@ -62,6 +62,7 @@ ynab accounts transactions <id>
 ```bash
 ynab categories list
 ynab categories view <id>
+ynab categories update <id> [--name <name>] [--note <note>] [--category-group-id <id>] [--goal-target <amount>]
 ynab categories budget <id> --month <YYYY-MM> --amount <amount>
 ynab categories transactions <id>
 ```
diff --git a/src/commands/categories.ts b/src/commands/categories.ts
index f8ba596..cdc9c72 100644
--- a/src/commands/categories.ts
+++ b/src/commands/categories.ts
@@ -36,6 +36,64 @@ export function createCategoriesCommand(): Command {
       })
     );
 
+  cmd
+    .command('update')
+    .description('Update category details')
+    .argument('<id>', 'Category ID')
+    .option('--name <name>', 'New category name')
+    .option('--note <note>', 'Category note (use empty string to clear)')
+    .option('--category-group-id <id>', 'Move to a different category group')
+    .option('--goal-target <amount>', 'Goal target amount in dollars (ignored if category has no goal)', parseFloat)
+    .option('-b, --budget <id>', 'Budget ID')
+    .action(
+      withErrorHandling(
+        async (
+          id: string,
+          options: {
+            name?: string;
+            note?: string;
+            categoryGroupId?: string;
+            goalTarget?: number;
+            budget?: string;
+          } & CommandOptions
+        ) => {
+          if (options.name === undefined && options.note === undefined && options.categoryGroupId === undefined && options.goalTarget === undefined) {
+            throw new YnabCliError(
+              'At least one field to update must be provided (--name, --note, --category-group-id, or --goal-target)',
+              400
+            );
+          }
+
+          if (options.name !== undefined && options.name.trim() === '') {
+            throw new YnabCliError('Category name cannot be empty or whitespace', 400);
+          }
+
+          const updateData: {
+            name?: string;
+            note?: string | null;
+            category_group_id?: string;
+            goal_target?: number | null;
+          } = {};
+
+          if (options.name !== undefined) {
+            updateData.name = options.name.trim();
+          }
+          if (options.note !== undefined) {
+            updateData.note = options.note.trim() || null;
+          }
+          if (options.categoryGroupId !== undefined) {
+            updateData.category_group_id = options.categoryGroupId;
+          }
+          if (options.goalTarget !== undefined) {
+            updateData.goal_target = amountToMilliunits(options.goalTarget);
+          }
+
+          const category = await client.updateCategory(id, { category: updateData }, options.budget);
+          outputJson(category);
+        }
+      )
+    );
+
   cmd
     .command('budget')
     .description('Set category budgeted amount for a month (overrides existing amount)')
diff --git a/src/lib/api-client.ts b/src/lib/api-client.ts
index e95ff12..f6bf6f8 100644
--- a/src/lib/api-client.ts
+++ b/src/lib/api-client.ts
@@ -159,6 +159,15 @@ export class YnabClient {
     });
   }
 
+  async updateCategory(categoryId: string, data: ynab.PatchCategoryWrapper, budgetId?: string) {
+    return this.withErrorHandling(async () => {
+      const api = await this.getApi();
+      const id = await this.getBudgetId(budgetId);
+      const response = await api.categories.updateCategory(id, categoryId, data);
+      return response.data.category;
+    });
+  }
+
   async getPayees(budgetId?: string, lastKnowledgeOfServer?: number) {
     return this.withErrorHandling(async () => {
       const api = await this.getApi();
diff --git a/src/mcp/server.ts b/src/mcp/server.ts
index 451745c..5616c0f 100644
--- a/src/mcp/server.ts
+++ b/src/mcp/server.ts
@@ -3,7 +3,7 @@ import { StdioServerTransport } from '@modelcontextprotocol/sdk/server/stdio.js'
 import { z } from 'zod';
 import { client } from '../lib/api-client.js';
 import { auth } from '../lib/auth.js';
-import { convertMilliunitsToAmounts } from '../lib/utils.js';
+import { amountToMilliunits, convertMilliunitsToAmounts } from '../lib/utils.js';
 
 const toolRegistry = [
   { name: 'list_budgets', description: 'List all budgets in the YNAB account' },
@@ -12,6 +12,7 @@ const toolRegistry = [
   { name: 'get_account', description: 'Get detailed information about a specific account' },
   { name: 'list_categories', description: 'List all category groups and categories in a budget' },
   { name: 'get_category', description: 'Get detailed information about a specific category' },
+  { name: 'update_category', description: 'Update category name, note, group, or goal target' },
   { name: 'list_transactions', description: 'List transactions with optional filtering' },
   { name: 'get_transaction', description: 'Get detailed information about a specific transaction' },
   { name: 'list_transactions_by_account', description: 'List transactions for a specific account' },
@@ -84,6 +85,27 @@ server.tool(
   async ({ categoryId, budgetId }) => currencyResponse(await client.getCategory(categoryId, budgetId))
 );
 
+server.tool(
+  'update_category',
+  'Update category name, note, group, or goal target',
+  {
+    categoryId: z.string().describe('Category ID'),
+    name: z.string().optional().describe('New category name'),
+    note: z.string().optional().describe('Category note (use empty string to clear)'),
+    categoryGroupId: z.string().optional().describe('Move to a different category group'),
+    goalTarget: z.number().optional().describe('Goal target amount in dollars (ignored if category has no goal)'),
+    budgetId: z.string().optional().describe('Budget ID (uses default if not specified)'),
+  },
+  async ({ categoryId, name, note, categoryGroupId, goalTarget, budgetId }) => {
+    const updateData: Record<string, unknown> = {};
+    if (name !== undefined) updateData.name = name.trim();
+    if (note !== undefined) updateData.note = note.trim() || null;
+    if (categoryGroupId !== undefined) updateData.category_group_id = categoryGroupId;
+    if (goalTarget !== undefined) updateData.goal_target = amountToMilliunits(goalTarget);
+    return currencyResponse(await client.updateCategory(categoryId, { category: updateData }, budgetId));
+  }
+);
+
 server.tool(
   'list_transactions',
   'List transactions with optional filtering',