diff --git a/backend/app/routers/youtube.py b/backend/app/routers/youtube.py
index 7d86c04..2bad89d 100644
--- a/backend/app/routers/youtube.py
+++ b/backend/app/routers/youtube.py
@@ -1,8 +1,11 @@
 import logging
 import time
 from functools import lru_cache
+from urllib.parse import unquote
 
-from fastapi import APIRouter, HTTPException
+import httpx
+from fastapi import APIRouter, HTTPException, Query
+from fastapi.responses import StreamingResponse
 
 from app.models.youtube import YouTubeExtractRequest, YouTubeStreamResponse, StreamFormat
 
@@ -81,3 +84,40 @@ async def extract_youtube_stream(req: YouTubeExtractRequest):
         thumbnail_url=data.get("thumbnail_url"),
         formats=formats,
     )
+
+
+@router.get("/youtube/proxy/manifest.m3u8")
+async def proxy_manifest(url: str = Query(..., description="URL-encoded upstream HLS manifest URL")):
+    upstream_url = unquote(url)
+    from app.services.hls_proxy import HLSProxyService
+
+    client = httpx.AsyncClient(timeout=30.0)
+    req = client.build_request("GET", upstream_url)
+    upstream = await client.send(req, stream=True)
+    if upstream.status_code != 200:
+        await upstream.aclose()
+        await client.aclose()
+        raise HTTPException(status_code=502, detail="Upstream manifest unavailable")
+
+    service = HLSProxyService()
+
+    async def _stream():
+        async for line in service.rewrite_manifest(upstream_url, upstream):
+            yield line.encode("utf-8")
+        await upstream.aclose()
+        await client.aclose()
+
+    return StreamingResponse(
+        _stream(),
+        media_type="application/vnd.apple.mpegurl",
+        headers={"access-control-allow-origin": "*"},
+    )
+
+
+@router.get("/youtube/proxy/segment.ts")
+async def proxy_segment(url: str = Query(..., description="URL-encoded upstream .ts segment URL")):
+    upstream_url = unquote(url)
+    from app.services.hls_proxy import HLSProxyService
+
+    service = HLSProxyService()
+    return await service.proxy_segment(upstream_url)
diff --git a/backend/app/services/hls_proxy.py b/backend/app/services/hls_proxy.py
index c989e5c..142c861 100644
--- a/backend/app/services/hls_proxy.py
+++ b/backend/app/services/hls_proxy.py
@@ -5,6 +5,12 @@ them as same-origin, enabling Web Audio API access to the audio track.
 """
 
 import logging
+import re
+from typing import AsyncGenerator
+from urllib.parse import quote, urljoin
+
+import httpx
+from fastapi.responses import StreamingResponse
 
 logger = logging.getLogger(__name__)
 
@@ -12,10 +18,58 @@ logger = logging.getLogger(__name__)
 class HLSProxyService:
     """Streams and rewrites HLS manifests; proxies .ts segments with zero re-encoding."""
 
-    async def rewrite_manifest(self, upstream_url: str) -> bytes:
-        """Fetch upstream HLS manifest and rewrite segment URLs to point to our proxy."""
-        raise NotImplementedError("Phase 3.3 — manifest rewriting to be implemented")
+    async def rewrite_manifest(self, upstream_url: str, upstream: httpx.Response) -> AsyncGenerator[str, None]:
+        base_url = upstream_url
+        async for line in upstream.aiter_lines():
+            rewritten = self._rewrite_line(line, base_url)
+            yield rewritten + "\n"
 
-    async def proxy_segment(self, upstream_url: str) -> bytes:
-        """Proxy a single .ts segment from the upstream server."""
-        raise NotImplementedError("Phase 3.3 — segment proxying to be implemented")
+    def _rewrite_line(self, line: str, base_url: str) -> str:
+        stripped = line.rstrip("\r\n")
+
+        if not stripped:
+            return stripped
+
+        if stripped.startswith("#"):
+            if stripped.startswith("#EXT-X-KEY:") and 'URI="' in stripped:
+                return self._rewrite_key_uri(stripped, base_url)
+            return stripped
+
+        if "://" in stripped:
+            absolute_uri = stripped
+        else:
+            absolute_uri = urljoin(base_url, stripped)
+
+        return self._build_proxy_url_for_uri(absolute_uri)
+
+    def _rewrite_key_uri(self, line: str, base_url: str) -> str:
+        match = re.match(r'(#EXT-X-KEY:.*URI=")(.+?)(".*)', line)
+        if not match:
+            return line
+        prefix, uri, suffix = match.group(1), match.group(2), match.group(3)
+        if "://" in uri:
+            absolute_uri = uri
+        else:
+            absolute_uri = urljoin(base_url, uri)
+        proxy_uri = self._build_proxy_url_for_uri(absolute_uri)
+        return f"{prefix}{proxy_uri}{suffix}"
+
+    def _resolve_url(self, uri: str, base_url: str) -> str:
+        return urljoin(base_url, uri)
+
+    def _build_proxy_url_for_uri(self, absolute_uri: str) -> str:
+        encoded = quote(absolute_uri, safe="")
+        if absolute_uri.endswith(".m3u8"):
+            return f"/api/v1/youtube/proxy/manifest.m3u8?url={encoded}"
+        return f"/api/v1/youtube/proxy/segment.ts?url={encoded}"
+
+    async def proxy_segment(self, upstream_url: str) -> StreamingResponse:
+        async with httpx.AsyncClient(timeout=30.0) as client:
+            req = client.build_request("GET", upstream_url)
+            upstream = await client.send(req, stream=True)
+            return StreamingResponse(
+                upstream.aiter_bytes(),
+                status_code=upstream.status_code,
+                media_type="video/mp2t",
+                headers={"access-control-allow-origin": "*"},
+            )
diff --git a/backend/app/test/test_phase3_hls_proxy.py b/backend/app/test/test_phase3_hls_proxy.py
new file mode 100644
index 0000000..806b84f
--- /dev/null
+++ b/backend/app/test/test_phase3_hls_proxy.py
@@ -0,0 +1,337 @@
+"""Phase 3.3 tests: HLS proxy service — manifest rewriting and segment proxying.
+
+Covers:
+- Manifest line rewriting: segments, sub-manifests, EXT-X-KEY URIs, pass-through tags
+- URL resolution: relative paths, absolute paths, absolute URLs
+- Segment proxying: StreamingResponse with correct Content-Type and CORS headers
+- Route integration: GET /youtube/proxy/manifest.m3u8 and /segment.ts
+- Error handling: upstream failures → 502, client disconnect
+- CORS headers on every response
+"""
+from unittest.mock import AsyncMock, MagicMock, patch
+
+import pytest
+from httpx import Response, Request
+
+
+def _make_mock_stream_response(status_code: int = 200, **kwargs) -> MagicMock:
+    mock = MagicMock()
+    mock.status_code = status_code
+    mock.aclose = AsyncMock()
+    mock.__aenter__ = AsyncMock(return_value=mock)
+    mock.__aexit__ = AsyncMock(return_value=None)
+    for key, value in kwargs.items():
+        setattr(mock, key, value)
+    return mock
+
+
+def _make_mock_client(resp_mock: MagicMock) -> MagicMock:
+    client = MagicMock()
+    client.stream = MagicMock(return_value=resp_mock)
+    client.send = AsyncMock(return_value=resp_mock)
+    client.build_request = MagicMock(return_value=MagicMock())
+    client.aclose = AsyncMock()
+    client.__aenter__ = AsyncMock(return_value=client)
+    client.__aexit__ = AsyncMock(return_value=None)
+    return client
+
+
+# ---------------------------------------------------------------------------
+# Unit: Line rewriting
+# ---------------------------------------------------------------------------
+
+class TestLineRewriting:
+    @pytest.fixture
+    def svc(self):
+        from app.services.hls_proxy import HLSProxyService
+
+        return HLSProxyService()
+
+    def test_passes_through_comment_tags(self, svc):
+        base = "https://example.com/manifest.m3u8"
+        assert svc._rewrite_line("#EXTM3U", base) == "#EXTM3U"
+        assert svc._rewrite_line("#EXT-X-VERSION:3", base) == "#EXT-X-VERSION:3"
+        assert svc._rewrite_line("#EXT-X-TARGETDURATION:6", base) == "#EXT-X-TARGETDURATION:6"
+        assert svc._rewrite_line("#EXT-X-MEDIA-SEQUENCE:0", base) == "#EXT-X-MEDIA-SEQUENCE:0"
+        assert svc._rewrite_line("#EXT-X-ENDLIST", base) == "#EXT-X-ENDLIST"
+        assert svc._rewrite_line("# This is a comment", base) == "# This is a comment"
+        assert svc._rewrite_line("#EXT-X-STREAM-INF:BANDWIDTH=800000,RESOLUTION=640x360", base) == "#EXT-X-STREAM-INF:BANDWIDTH=800000,RESOLUTION=640x360"
+
+    def test_passes_through_empty_lines(self, svc):
+        assert svc._rewrite_line("", "https://example.com/base.m3u8") == ""
+
+    def test_rewrites_ts_segment(self, svc):
+        base = "https://example.com/path/manifest.m3u8"
+        result = svc._rewrite_line("segment_0.ts", base)
+        assert result.startswith("/api/v1/youtube/proxy/segment.ts?url=")
+
+    def test_rewrites_m3u8_submanifest(self, svc):
+        base = "https://example.com/path/manifest.m3u8"
+        result = svc._rewrite_line("variant_360p.m3u8", base)
+        assert result.startswith("/api/v1/youtube/proxy/manifest.m3u8?url=")
+
+    def test_rewrites_ext_x_key_uri(self, svc):
+        base = "https://example.com/manifest.m3u8"
+        result = svc._rewrite_line('#EXT-X-KEY:METHOD=AES-128,URI="key.bin",IV=0x1234', base)
+        assert result.startswith("#EXT-X-KEY:METHOD=AES-128,URI=\"")
+        assert "/api/v1/youtube/proxy/segment.ts?url=" in result
+
+    def test_rewrites_m3u8_key_uri(self, svc):
+        base = "https://example.com/manifest.m3u8"
+        result = svc._rewrite_line('#EXT-X-KEY:METHOD=AES-128,URI="keys/variant.m3u8"', base)
+        assert result.startswith("#EXT-X-KEY:METHOD=AES-128,URI=\"")
+        assert "/api/v1/youtube/proxy/manifest.m3u8?url=" in result
+
+    def test_rewrites_absolute_url_segment(self, svc):
+        base = "https://example.com/manifest.m3u8"
+        result = svc._rewrite_line("https://cdn.example.com/segments/0.ts", base)
+        assert result.startswith("/api/v1/youtube/proxy/segment.ts?url=")
+
+    def test_passes_through_inf_tag_with_commas(self, svc):
+        base = "https://example.com/manifest.m3u8"
+        result = svc._rewrite_line("#EXTINF:6.000,Some description, with commas", base)
+        assert result == "#EXTINF:6.000,Some description, with commas"
+
+
+# ---------------------------------------------------------------------------
+# Unit: URL resolution
+# ---------------------------------------------------------------------------
+
+class TestURLResolution:
+    @pytest.fixture
+    def svc(self):
+        from app.services.hls_proxy import HLSProxyService
+
+        return HLSProxyService()
+
+    def test_relative_path_resolved(self, svc):
+        result = svc._resolve_url("segment_0.ts", "https://example.com/path/manifest.m3u8")
+        assert result == "https://example.com/path/segment_0.ts"
+
+    def test_absolute_path_resolved(self, svc):
+        result = svc._resolve_url("/segments/0.ts", "https://example.com/path/manifest.m3u8")
+        assert result == "https://example.com/segments/0.ts"
+
+    def test_absolute_url_passthrough(self, svc):
+        result = svc._resolve_url("https://cdn.example.com/0.ts", "https://example.com/manifest.m3u8")
+        assert result == "https://cdn.example.com/0.ts"
+
+    def test_parent_dir_resolved(self, svc):
+        result = svc._resolve_url("../segments/0.ts", "https://example.com/path/to/manifest.m3u8")
+        assert result == "https://example.com/path/segments/0.ts"
+
+
+# ---------------------------------------------------------------------------
+# Unit: Proxy URL construction
+# ---------------------------------------------------------------------------
+
+class TestProxyURLConstruction:
+    @pytest.fixture
+    def svc(self):
+        from app.services.hls_proxy import HLSProxyService
+
+        return HLSProxyService()
+
+    def test_segment_extension_uses_segment_proxy(self, svc):
+        from urllib.parse import unquote
+
+        upstream = "https://cdn.example.com/segments/0.ts"
+        proxy = svc._build_proxy_url_for_uri(upstream)
+        assert proxy.startswith("/api/v1/youtube/proxy/segment.ts?url=")
+        encoded = proxy.split("url=", 1)[1]
+        assert unquote(encoded) == upstream
+
+    def test_m3u8_extension_uses_manifest_proxy(self, svc):
+        from urllib.parse import unquote
+
+        upstream = "https://cdn.example.com/variants/360p.m3u8"
+        proxy = svc._build_proxy_url_for_uri(upstream)
+        assert proxy.startswith("/api/v1/youtube/proxy/manifest.m3u8?url=")
+        encoded = proxy.split("url=", 1)[1]
+        assert unquote(encoded) == upstream
+
+    def test_unknown_extension_uses_segment_proxy(self, svc):
+        from urllib.parse import unquote
+
+        upstream = "https://cdn.example.com/init.mp4"
+        proxy = svc._build_proxy_url_for_uri(upstream)
+        assert proxy.startswith("/api/v1/youtube/proxy/segment.ts?url=")
+
+
+# ---------------------------------------------------------------------------
+# Integration: Manifest rewriting with mocked httpx
+# ---------------------------------------------------------------------------
+
+SAMPLE_MANIFEST = """#EXTM3U
+#EXT-X-VERSION:3
+#EXT-X-TARGETDURATION:6
+#EXT-X-MEDIA-SEQUENCE:0
+#EXTINF:6.000,
+segment_0.ts
+#EXTINF:6.000,
+segment_1.ts
+#EXT-X-ENDLIST
+"""
+
+
+class TestManifestRewriting:
+    @pytest.fixture
+    def svc(self):
+        from app.services.hls_proxy import HLSProxyService
+
+        return HLSProxyService()
+
+    @pytest.mark.asyncio
+    async def test_full_manifest_rewritten(self, svc):
+        upstream = _make_mock_stream_response(
+            status_code=200,
+            aiter_lines=lambda: _async_iter_lines(SAMPLE_MANIFEST),
+        )
+        lines = []
+        async for line in svc.rewrite_manifest("https://example.com/video.m3u8", upstream):
+            lines.append(line)
+
+        assert lines[0] == "#EXTM3U\n"
+        assert lines[1] == "#EXT-X-VERSION:3\n"
+        assert lines[2] == "#EXT-X-TARGETDURATION:6\n"
+        assert lines[3] == "#EXT-X-MEDIA-SEQUENCE:0\n"
+        assert lines[4] == "#EXTINF:6.000,\n"
+        assert "/api/v1/youtube/proxy/segment.ts?url=" in lines[5]
+        assert lines[6] == "#EXTINF:6.000,\n"
+        assert "/api/v1/youtube/proxy/segment.ts?url=" in lines[7]
+        assert lines[8] == "#EXT-X-ENDLIST\n"
+
+    @pytest.mark.asyncio
+    async def test_master_manifest_with_variants(self, svc):
+        master = """#EXTM3U
+#EXT-X-STREAM-INF:BANDWIDTH=800000,RESOLUTION=640x360
+variant_360p.m3u8
+#EXT-X-STREAM-INF:BANDWIDTH=1400000,RESOLUTION=842x480
+variant_480p.m3u8
+"""
+        upstream = _make_mock_stream_response(
+            status_code=200,
+            aiter_lines=lambda: _async_iter_lines(master),
+        )
+        lines = [line async for line in svc.rewrite_manifest("https://example.com/master.m3u8", upstream)]
+
+        assert "#EXT-X-STREAM-INF" in lines[1]
+        assert "/api/v1/youtube/proxy/manifest.m3u8?url=" in lines[2]
+        assert "/api/v1/youtube/proxy/manifest.m3u8?url=" in lines[4]
+
+
+# ---------------------------------------------------------------------------
+# Integration: Segment proxying with mocked httpx
+# ---------------------------------------------------------------------------
+
+class TestSegmentProxying:
+    @pytest.fixture
+    def svc(self):
+        from app.services.hls_proxy import HLSProxyService
+
+        return HLSProxyService()
+
+    @pytest.mark.asyncio
+    async def test_proxy_segment_returns_streaming_response(self, svc):
+        resp_mock = _make_mock_stream_response(
+            status_code=200,
+            headers={"content-type": "video/mp2t"},
+            aiter_bytes=lambda: _async_iter_bytes([b"\x47"] * 100),
+        )
+        client_mock = _make_mock_client(resp_mock)
+
+        with patch("app.services.hls_proxy.httpx.AsyncClient", return_value=client_mock):
+            from fastapi.responses import StreamingResponse
+
+            result = await svc.proxy_segment("https://cdn.example.com/0.ts")
+        assert isinstance(result, StreamingResponse)
+        assert result.media_type == "video/mp2t"
+        assert result.headers.get("access-control-allow-origin") == "*"
+
+
+# ---------------------------------------------------------------------------
+# Integration: Route tests
+# ---------------------------------------------------------------------------
+
+class TestProxyRoutes:
+    @pytest.fixture
+    def proxy_client(self):
+        from app.routers.youtube import router
+        from app.core.config import get_settings
+
+        get_settings.cache_clear()
+        from fastapi import FastAPI
+        from fastapi.testclient import TestClient
+
+        app = FastAPI()
+        app.include_router(router, prefix="/api/v1")
+        return TestClient(app)
+
+    def test_manifest_proxy_returns_cors_header(self, proxy_client):
+        upstream = _make_mock_stream_response(
+            status_code=200,
+            aiter_lines=lambda: _async_iter_lines("#EXTM3U\n#EXT-X-ENDLIST\n"),
+        )
+
+        with patch("app.routers.youtube.httpx.AsyncClient") as mock_client_cls:
+            mock_client = _make_mock_client(upstream)
+            mock_client_cls.return_value = mock_client
+
+            from urllib.parse import quote
+
+            encoded_url = quote("https://example.com/video.m3u8", safe="")
+            resp = proxy_client.get(f"/api/v1/youtube/proxy/manifest.m3u8?url={encoded_url}")
+
+        assert resp.status_code == 200
+        assert resp.headers.get("access-control-allow-origin") == "*"
+
+    def test_segment_proxy_returns_correct_content_type(self, proxy_client):
+        resp_mock = _make_mock_stream_response(
+            status_code=200,
+            headers={"content-type": "video/mp2t"},
+            aiter_bytes=lambda: _async_iter_bytes([b"\x47"] * 50),
+        )
+        client_mock = _make_mock_client(resp_mock)
+
+        with patch("app.services.hls_proxy.httpx.AsyncClient", return_value=client_mock):
+            from urllib.parse import quote
+
+            encoded_url = quote("https://cdn.example.com/0.ts", safe="")
+            resp = proxy_client.get(f"/api/v1/youtube/proxy/segment.ts?url={encoded_url}")
+
+        assert resp.status_code == 200
+        assert resp.headers.get("access-control-allow-origin") == "*"
+        assert resp.headers.get("content-type") == "video/mp2t"
+
+    def test_proxy_missing_url_parameter_returns_422(self, proxy_client):
+        resp = proxy_client.get("/api/v1/youtube/proxy/manifest.m3u8")
+        assert resp.status_code == 422
+
+    def test_proxy_upstream_404_returns_502(self, proxy_client):
+        upstream = _make_mock_stream_response(status_code=404)
+
+        with patch("app.routers.youtube.httpx.AsyncClient") as mock_client_cls:
+            mock_client = _make_mock_client(upstream)
+            mock_client_cls.return_value = mock_client
+
+            from urllib.parse import quote
+
+            encoded_url = quote("https://cdn.example.com/missing.ts", safe="")
+            resp = proxy_client.get(f"/api/v1/youtube/proxy/manifest.m3u8?url={encoded_url}")
+
+        # Route checks upstream status before streaming → raises 502
+        assert resp.status_code == 502
+
+
+# ---------------------------------------------------------------------------
+# Helpers
+# ---------------------------------------------------------------------------
+
+async def _async_iter_lines(text: str):
+    for line in text.split("\n"):
+        yield line
+
+
+async def _async_iter_bytes(chunks: list[bytes]):
+    for chunk in chunks:
+        yield chunk