diff --git a/packages/cli/__tests__/commands/init.test.ts b/packages/cli/__tests__/commands/init.test.ts
index 7f530fd38..7c91c57d4 100644
--- a/packages/cli/__tests__/commands/init.test.ts
+++ b/packages/cli/__tests__/commands/init.test.ts
@@ -2,9 +2,10 @@ import { describe, it, expect, vi, afterEach } from "vitest";
 import { mkdtempSync, writeFileSync, readFileSync, rmSync, existsSync } from "node:fs";
 import { join } from "node:path";
 import { tmpdir } from "node:os";
-import { createServer } from "node:net";
+import { createServer, type Server } from "node:net";
 
 import { Command } from "commander";
+import { parse as yamlParse } from "yaml";
 import { registerInit } from "../../src/commands/init.js";
 
 let tmpDir: string;
@@ -85,4 +86,101 @@ describe("init command", () => {
       await new Promise<void>((resolve) => blocker.close(() => resolve()));
     }
   });
+
+  it("auto mode writes name and sessionPrefix to project config", async () => {
+    tmpDir = mkdtempSync(join(tmpdir(), "ao-init-test-"));
+    const outputPath = join(tmpDir, "agent-orchestrator.yaml");
+
+    const program = new Command();
+    program.exitOverride();
+    registerInit(program);
+
+    vi.spyOn(console, "log").mockImplementation(() => {});
+
+    await program.parseAsync(["node", "test", "init", "--auto", "--output", outputPath]);
+
+    const content = readFileSync(outputPath, "utf-8");
+    const config = yamlParse(content) as Record<string, unknown>;
+    const projects = config.projects as Record<string, Record<string, unknown>>;
+    const projectIds = Object.keys(projects);
+    expect(projectIds.length).toBeGreaterThan(0);
+
+    const projectId = projectIds[0];
+    const project = projects[projectId];
+
+    // BUG-01: sessionPrefix must exist and not be "undefined"
+    expect(project.sessionPrefix).toBeDefined();
+    expect(project.sessionPrefix).not.toBe("undefined");
+    expect(typeof project.sessionPrefix).toBe("string");
+    expect((project.sessionPrefix as string).length).toBeGreaterThan(0);
+
+    // BUG-02: name must match the project ID
+    expect(project.name).toBe(projectId);
+  });
+
+  it("auto mode warns when no free port is found", async () => {
+    tmpDir = mkdtempSync(join(tmpdir(), "ao-init-test-"));
+    const outputPath = join(tmpDir, "agent-orchestrator.yaml");
+
+    // Mock isPortAvailable to always return false (all ports busy)
+    const webDirModule = await import("../../src/lib/web-dir.js");
+    vi.spyOn(webDirModule, "isPortAvailable").mockResolvedValue(false);
+
+    const logSpy = vi.spyOn(console, "log").mockImplementation(() => {});
+
+    const program = new Command();
+    program.exitOverride();
+    registerInit(program);
+
+    await program.parseAsync(["node", "test", "init", "--auto", "--output", outputPath]);
+
+    // Should warn about no free port
+    const logCalls = logSpy.mock.calls.map((args) => args.join(" "));
+    const hasPortWarning = logCalls.some((msg) => msg.includes("No free port found"));
+    expect(hasPortWarning).toBe(true);
+
+    // Should still write config with fallback port 3000
+    const content = readFileSync(outputPath, "utf-8");
+    expect(content).toContain("port: 3000");
+  });
+
+  it("--smart flag description includes 'coming soon'", () => {
+    const program = new Command();
+    registerInit(program);
+
+    const initCmd = program.commands.find((c) => c.name() === "init");
+    expect(initCmd).toBeDefined();
+
+    const smartOption = initCmd!.options.find((o) => o.long === "--smart");
+    expect(smartOption).toBeDefined();
+    expect(smartOption!.description).toContain("coming soon");
+  });
+
+  it("auto mode sessionPrefix uses core generateSessionPrefix heuristics", async () => {
+    tmpDir = mkdtempSync(join(tmpdir(), "ao-init-test-"));
+    const outputPath = join(tmpDir, "agent-orchestrator.yaml");
+
+    // Run from a directory whose basename is kebab-case
+    // The cwd() in init.ts determines the projectId via basename()
+    // We can't easily control cwd in tests, but we can verify the prefix
+    // is consistent with generateSessionPrefix for whatever projectId is used
+    const { generateSessionPrefix } = await import("@composio/ao-core");
+
+    const program = new Command();
+    program.exitOverride();
+    registerInit(program);
+
+    vi.spyOn(console, "log").mockImplementation(() => {});
+
+    await program.parseAsync(["node", "test", "init", "--auto", "--output", outputPath]);
+
+    const content = readFileSync(outputPath, "utf-8");
+    const config = yamlParse(content) as Record<string, unknown>;
+    const projects = config.projects as Record<string, Record<string, unknown>>;
+    const projectId = Object.keys(projects)[0];
+    const project = projects[projectId];
+
+    // sessionPrefix must match what generateSessionPrefix produces
+    expect(project.sessionPrefix).toBe(generateSessionPrefix(projectId));
+  });
 });