diff --git a/public/css/style.css b/public/css/style.css
index c5ffc92..a9b539f 100644
--- a/public/css/style.css
+++ b/public/css/style.css
@@ -932,6 +932,41 @@ ul, ol {
   border-top: 1px solid var(--color-border);
 }
 
+.modal-close {
+  background: none;
+  border: none;
+  color: var(--color-text-muted);
+  cursor: pointer;
+  padding: var(--space-1);
+  border-radius: var(--radius-sm);
+  font-size: 1rem;
+}
+
+.modal-close:hover {
+  background: var(--color-hover);
+  color: var(--color-text);
+}
+
+.form-control {
+  width: 100%;
+  padding: var(--space-3);
+  background: var(--color-bg);
+  border: 1px solid var(--color-border);
+  border-radius: var(--radius-md);
+  color: var(--color-text);
+  font-size: 0.875rem;
+}
+
+.form-control:focus {
+  outline: none;
+  border-color: var(--color-accent);
+}
+
+.form-control option {
+  background: var(--color-surface);
+  color: var(--color-text);
+}
+
 /* === Login Screen === */
 .login-screen {
   min-height: 100vh;
diff --git a/public/js/app.js b/public/js/app.js
index cf73bdf..b54a801 100644
--- a/public/js/app.js
+++ b/public/js/app.js
@@ -143,6 +143,6 @@ document.addEventListener('keydown', (e) => {
   }
   if ((e.ctrlKey || e.metaKey) && e.key === 'n' && window.app.state.view === 'dashboard') {
     e.preventDefault();
-    window.app.navigate('editor');
+    window.showNewDocModal();
   }
 });
diff --git a/public/js/components/sidebar.js b/public/js/components/sidebar.js
index af2c299..e7905f4 100644
--- a/public/js/components/sidebar.js
+++ b/public/js/components/sidebar.js
@@ -58,7 +58,8 @@ export function renderSidebar({ libraries, tags, selectedLibrary, selectedTag, o
         </div>
         <div class="quick-links">
           <a class="quick-link" data-action="home">📋 All Documents</a>
-          <a class="quick-link" onclick="window.app.navigate('editor')">+ New Document</a>
+          <a class="quick-link" onclick="window.showNewDocModal()">📄 New Document</a>
+          <a class="quick-link" onclick="window.showNewLibraryModal()">📁 New Library</a>
         </div>
       </div>
     </aside>
@@ -66,18 +67,21 @@ export function renderSidebar({ libraries, tags, selectedLibrary, selectedTag, o
       (function() {
         var callbacks = window.__sidebarCallbacks;
         document.querySelectorAll('[data-action="home"]').forEach(function(el) {
-          el.addEventListener('click', function() {
+          el.addEventListener('click', function(e) {
+            e.stopPropagation();
             if (callbacks && callbacks.onHome) callbacks.onHome();
           });
         });
         document.querySelectorAll('[data-action="library"]').forEach(function(el) {
-          el.addEventListener('click', function() {
+          el.addEventListener('click', function(e) {
+            e.stopPropagation();
             var id = this.getAttribute('data-library-id');
             if (callbacks && callbacks.onSelectLibrary) callbacks.onSelectLibrary(id);
           });
         });
         document.querySelectorAll('[data-action="tag"]').forEach(function(el) {
-          el.addEventListener('click', function() {
+          el.addEventListener('click', function(e) {
+            e.stopPropagation();
             var tag = this.getAttribute('data-tag');
             if (callbacks && callbacks.onSelectTag) callbacks.onSelectTag(tag);
           });
diff --git a/public/js/views/dashboard.js b/public/js/views/dashboard.js
index 00e3750..12705f9 100644
--- a/public/js/views/dashboard.js
+++ b/public/js/views/dashboard.js
@@ -83,8 +83,8 @@ export async function renderDashboard(app) {
           <input type="text" id="search-input" placeholder="Search documents..." value="${searchQuery}">
         </div>
         <div class="header-actions">
-          <button class="btn btn-ghost btn-icon-only" onclick="window.app.navigate('editor')" title="New Document">+</button>
-          <button class="btn btn-ghost btn-icon-only" onclick="window.app.navigate('editor', {libraryId: 'new'})" title="New Library">📁</button>
+          <button class="btn btn-primary" onclick="window.showNewDocModal()">+ New Document</button>
+          <button class="btn btn-ghost" onclick="window.showNewLibraryModal()">📁 New Library</button>
         </div>
       </header>
       <div class="app-layout">
@@ -99,7 +99,7 @@ export async function renderDashboard(app) {
           <div class="content-header">
             <h1>${selectedLibrary ? getLibraryName(libraries, selectedLibrary) : selectedTag ? `#${selectedTag}` : 'All Documents'}</h1>
             <div class="header-actions">
-              <button class="btn btn-primary" onclick="window.app.navigate('editor')">+ New Document</button>
+              <button class="btn btn-primary" onclick="window.showNewDocModal()">+ New Document</button>
             </div>
           </div>
           <div class="content-body">
@@ -108,7 +108,7 @@ export async function renderDashboard(app) {
                 <div class="icon">📄</div>
                 <h3>No documents found</h3>
                 <p>${searchQuery || selectedTag ? 'Try adjusting your filters' : 'Create your first document'}</p>
-                <button class="btn btn-primary" onclick="window.app.navigate('editor')">+ Create Document</button>
+                <button class="btn btn-primary" onclick="window.showNewDocModal()">+ Create Document</button>
               </div>
             ` : `
               <div class="doc-grid">
@@ -174,3 +174,171 @@ function formatDate(dateStr) {
   const date = new Date(dateStr);
   return date.toLocaleDateString('en-US', { month: 'short', day: 'numeric' });
 }
+
+// Global function: Show modal to create new document (with library selection)
+window.showNewDocModal = async function() {
+  let libraries = [];
+  try {
+    const libResult = await api.getLibraries();
+    libraries = libResult.libraries || [];
+  } catch (e) {}
+
+  let step = 1; // 1 = choose library, 2 = create new library
+  let newLibraryName = '';
+
+  function render() {
+    const backdrop = document.createElement('div');
+    backdrop.className = 'modal-backdrop';
+    
+    if (step === 1) {
+      backdrop.innerHTML = `
+        <div class="modal" style="min-width: 450px;">
+          <div class="modal-header">
+            <span>📄</span>
+            <h3>Create New Document</h3>
+            <button class="modal-close" onclick="this.closest('.modal-backdrop').remove()">✕</button>
+          </div>
+          <div class="modal-body">
+            <p style="color: var(--color-text-secondary); margin-bottom: 16px;">Choose a library for your document:</p>
+            <div class="form-group">
+              <label for="doc-library-select">Library</label>
+              <select id="doc-library-select" class="form-control">
+                <option value="">— No Library —</option>
+                ${libraries.map(l => `<option value="${l.id}">📁 ${escapeHtml(l.name)}</option>`).join('')}
+                <option value="__new__">+ Create New Library</option>
+              </select>
+            </div>
+          </div>
+          <div class="modal-footer">
+            <button class="btn btn-ghost" onclick="this.closest('.modal-backdrop').remove()">Cancel</button>
+            <button class="btn btn-primary" id="doc-next-btn">Next →</button>
+          </div>
+        </div>
+      `;
+    } else {
+      backdrop.innerHTML = `
+        <div class="modal" style="min-width: 450px;">
+          <div class="modal-header">
+            <span>📁</span>
+            <h3>Create New Library</h3>
+            <button class="modal-close" onclick="this.closest('.modal-backdrop').remove()">✕</button>
+          </div>
+          <div class="modal-body">
+            <div class="form-group">
+              <label for="new-library-name">Library Name</label>
+              <input type="text" id="new-library-name" class="form-control" placeholder="e.g., Backend Requirements" value="${escapeHtml(newLibraryName)}">
+            </div>
+          </div>
+          <div class="modal-footer">
+            <button class="btn btn-ghost" id="doc-back-btn">← Back</button>
+            <button class="btn btn-primary" id="doc-create-lib-btn">Create Library</button>
+          </div>
+        </div>
+      `;
+    }
+
+    document.body.appendChild(backdrop);
+
+    if (step === 1) {
+      const select = document.getElementById('doc-library-select');
+      const nextBtn = document.getElementById('doc-next-btn');
+      
+      nextBtn.onclick = () => {
+        const value = select.value;
+        if (value === '__new__') {
+          step = 2;
+          backdrop.remove();
+          render();
+        } else {
+          backdrop.remove();
+          window.app.navigate('editor', { libraryId: value || null });
+        }
+      };
+    } else {
+      const backBtn = document.getElementById('doc-back-btn');
+      const createBtn = document.getElementById('doc-create-lib-btn');
+      const nameInput = document.getElementById('new-library-name');
+      
+      backBtn.onclick = () => {
+        newLibraryName = nameInput.value;
+        step = 1;
+        backdrop.remove();
+        render();
+      };
+      
+      createBtn.onclick = async () => {
+        const name = nameInput.value.trim();
+        if (!name) {
+          window.app.showToast('Please enter a library name', 'error');
+          return;
+        }
+        try {
+          const result = await api.createLibrary({ name });
+          backdrop.remove();
+          window.app.showToast('Library created', 'success');
+          window.app.navigate('editor', { libraryId: result.id });
+        } catch (e) {
+          window.app.showToast('Failed to create library: ' + e.message, 'error');
+        }
+      };
+    }
+
+    backdrop.onclick = (e) => {
+      if (e.target === backdrop) backdrop.remove();
+    };
+  }
+
+  render();
+};
+
+// Global function: Show modal to create new library
+window.showNewLibraryModal = function() {
+  const backdrop = document.createElement('div');
+  backdrop.className = 'modal-backdrop';
+  backdrop.innerHTML = `
+    <div class="modal" style="min-width: 450px;">
+      <div class="modal-header">
+        <span>📁</span>
+        <h3>Create New Library</h3>
+        <button class="modal-close" onclick="this.closest('.modal-backdrop').remove()">✕</button>
+      </div>
+      <div class="modal-body">
+        <p style="color: var(--color-text-secondary); margin-bottom: 16px;">Libraries help you organize your documents.</p>
+        <div class="form-group">
+          <label for="new-lib-name">Library Name</label>
+          <input type="text" id="new-lib-name" class="form-control" placeholder="e.g., Backend Requirements">
+        </div>
+      </div>
+      <div class="modal-footer">
+        <button class="btn btn-ghost" onclick="this.closest('.modal-backdrop').remove()">Cancel</button>
+        <button class="btn btn-primary" id="create-lib-btn">Create Library</button>
+      </div>
+    </div>
+  `;
+  document.body.appendChild(backdrop);
+
+  const nameInput = document.getElementById('new-lib-name');
+  const createBtn = document.getElementById('create-lib-btn');
+  
+  createBtn.onclick = async () => {
+    const name = nameInput.value.trim();
+    if (!name) {
+      window.app.showToast('Please enter a library name', 'error');
+      return;
+    }
+    try {
+      await api.createLibrary({ name });
+      backdrop.remove();
+      window.app.showToast('Library created successfully', 'success');
+      window.app.navigate('dashboard');
+    } catch (e) {
+      window.app.showToast('Failed to create library: ' + e.message, 'error');
+    }
+  };
+
+  backdrop.onclick = (e) => {
+    if (e.target === backdrop) backdrop.remove();
+  };
+
+  nameInput.focus();
+};
diff --git a/public/js/views/document.js b/public/js/views/document.js
index 7988f6e..8f5e16e 100644
--- a/public/js/views/document.js
+++ b/public/js/views/document.js
@@ -23,11 +23,11 @@ export async function renderDocument(app) {
 
     appEl.innerHTML = `
       <header class="app-header">
-        <button class="btn btn-ghost" onclick="window.app.navigate('dashboard')">← Back</button>
+        <button type="button" class="btn btn-ghost" onclick="window.app.navigate('dashboard')">← Back</button>
         <div class="header-actions">
-          <button class="btn btn-ghost" onclick="window.app.navigate('editor', {id: '${doc.id}'})">✏️ Edit</button>
-          <button class="btn btn-ghost" onclick="exportDoc()">📥 Export</button>
-          <button class="btn btn-ghost danger" onclick="deleteDoc()">🗑️ Delete</button>
+          <button type="button" class="btn btn-ghost" onclick="window.app.navigate('editor', {id: '${doc.id}'})">✏️ Edit</button>
+          <button type="button" class="btn btn-ghost" onclick="exportDoc()">📥 Export</button>
+          <button type="button" class="btn btn-ghost danger" onclick="deleteDoc()">🗑️ Delete</button>
         </div>
       </header>
       <main class="main-content">
@@ -70,7 +70,7 @@ export async function renderDocument(app) {
                 <div class="meta-section">
                   <div class="meta-header">Tags</div>
                   <div class="meta-body doc-tags">
-                    ${doc.tags.map(t => `<span class="tag-pill" onclick="filterByTag('${escapeHtml(t)}')">${escapeHtml(t)}</span>`).join('')}
+                    ${doc.tags.map(t => `<span class="tag-pill" onclick="filterByTag('${escapeHtml(t)}'); event.stopPropagation();">${escapeHtml(t)}</span>`).join('')}
                   </div>
                 </div>
               ` : ''}