diff --git a/.mockery.yaml b/.mockery.yaml
index 877ad49..6105c3d 100644
--- a/.mockery.yaml
+++ b/.mockery.yaml
@@ -9,3 +9,6 @@ packages:
       QuoteService:
       ChallengeGenerator:
       ChallengeVerifier:
+  hash-of-wisdom/internal/controller:
+    interfaces:
+      WisdomService:
diff --git a/internal/application/application.go b/internal/application/application.go
new file mode 100644
index 0000000..3ea5722
--- /dev/null
+++ b/internal/application/application.go
@@ -0,0 +1,88 @@
+package application
+
+import (
+	"context"
+	"fmt"
+	"io"
+
+	"hash-of-wisdom/internal/pow/challenge"
+	"hash-of-wisdom/internal/protocol"
+	"hash-of-wisdom/internal/quotes"
+)
+
+// Response represents an encodable response that can write itself to a connection
+type Response interface {
+	Encode(w io.Writer) error
+}
+
+// WisdomService defines the interface for the wisdom service
+type WisdomService interface {
+	GenerateChallenge(ctx context.Context, resource string) (*challenge.Challenge, error)
+	VerifySolution(ctx context.Context, solution *challenge.Solution) error
+	GetQuote(ctx context.Context) (*quotes.Quote, error)
+}
+
+// WisdomApplication handles the Word of Wisdom application logic
+type WisdomApplication struct {
+	wisdomService WisdomService
+}
+
+// NewWisdomApplication creates a new wisdom application handler
+func NewWisdomApplication(wisdomService WisdomService) *WisdomApplication {
+	return &WisdomApplication{
+		wisdomService: wisdomService,
+	}
+}
+
+// HandleMessage processes a protocol message and returns an encodable response
+func (a *WisdomApplication) HandleMessage(ctx context.Context, msg *protocol.Message) (Response, error) {
+	switch msg.Type {
+	case protocol.ChallengeRequestType:
+		return a.handleChallengeRequest(ctx)
+	case protocol.SolutionRequestType:
+		return a.handleSolutionRequest(ctx, msg)
+	default:
+		return &protocol.ErrorResponse{
+			Code:    protocol.ErrMalformedMessage,
+			Message: fmt.Sprintf("unsupported message type: 0x%02x", msg.Type),
+		}, nil
+	}
+}
+
+// handleChallengeRequest processes challenge requests
+func (a *WisdomApplication) handleChallengeRequest(ctx context.Context) (Response, error) {
+	challenge, err := a.wisdomService.GenerateChallenge(ctx, "quotes")
+	if err != nil {
+		return &protocol.ErrorResponse{Code: protocol.ErrServerError, Message: "Contact administrator"}, nil
+	}
+
+	return &protocol.ChallengeResponse{Challenge: challenge}, nil
+}
+
+// handleSolutionRequest processes solution requests
+func (a *WisdomApplication) handleSolutionRequest(ctx context.Context, msg *protocol.Message) (Response, error) {
+	// Parse solution request
+	var solutionReq protocol.SolutionRequest
+	if err := solutionReq.Decode(msg.PayloadStream); err != nil {
+		return &protocol.ErrorResponse{Code: protocol.ErrMalformedMessage, Message: "invalid solution format"}, nil
+	}
+
+	// Create solution object
+	solution := &challenge.Solution{
+		Challenge: solutionReq.Challenge,
+		Nonce:     solutionReq.Nonce,
+	}
+
+	// Verify solution
+	if err := a.wisdomService.VerifySolution(ctx, solution); err != nil {
+		return &protocol.ErrorResponse{Code: protocol.ErrInvalidSolution, Message: "solution verification failed"}, nil
+	}
+
+	// Get quote
+	quote, err := a.wisdomService.GetQuote(ctx)
+	if err != nil {
+		return &protocol.ErrorResponse{Code: protocol.ErrServerError, Message: "Contact administrator"}, nil
+	}
+
+	return &protocol.SolutionResponse{Quote: quote}, nil
+}
diff --git a/internal/application/application_test.go b/internal/application/application_test.go
new file mode 100644
index 0000000..6017a28
--- /dev/null
+++ b/internal/application/application_test.go
@@ -0,0 +1,324 @@
+package application
+
+import (
+	"bytes"
+	"context"
+	"encoding/json"
+	"errors"
+	"testing"
+
+	"hash-of-wisdom/internal/application/mocks"
+	"hash-of-wisdom/internal/pow/challenge"
+	"hash-of-wisdom/internal/protocol"
+	"hash-of-wisdom/internal/quotes"
+	"hash-of-wisdom/internal/service"
+
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/mock"
+	"github.com/stretchr/testify/require"
+)
+
+func TestNewWisdomApplication(t *testing.T) {
+	mockService := mocks.NewMockWisdomService(t)
+	app := NewWisdomApplication(mockService)
+
+	assert.NotNil(t, app)
+	assert.Equal(t, mockService, app.wisdomService)
+}
+
+func TestWisdomApplication_HandleMessage_UnsupportedType(t *testing.T) {
+	mockService := mocks.NewMockWisdomService(t)
+	app := NewWisdomApplication(mockService)
+
+	ctx := context.Background()
+	msg := &protocol.Message{
+		Type:           protocol.MessageType(0xFF), // Invalid type
+		PayloadLength:  0,
+		PayloadStream:  nil,
+	}
+
+	response, err := app.HandleMessage(ctx, msg)
+	require.NoError(t, err)
+
+	// Type assert to ErrorResponse
+	errorResponse, ok := response.(*protocol.ErrorResponse)
+	require.True(t, ok, "Expected ErrorResponse")
+	assert.Equal(t, protocol.ErrMalformedMessage, errorResponse.Code)
+	assert.Contains(t, errorResponse.Message, "unsupported message type: 0xff")
+}
+
+func TestWisdomApplication_HandleChallengeRequest_Success(t *testing.T) {
+	mockService := mocks.NewMockWisdomService(t)
+	app := NewWisdomApplication(mockService)
+
+	// Mock successful challenge generation
+	testChallenge := &challenge.Challenge{
+		Resource:   "quotes",
+		Timestamp:  12345,
+		Difficulty: 4,
+		Random:     []byte("test"),
+		HMAC:       []byte("signature"),
+	}
+
+	mockService.On("GenerateChallenge", mock.Anything, "quotes").Return(testChallenge, nil)
+
+	ctx := context.Background()
+	msg := &protocol.Message{
+		Type:           protocol.ChallengeRequestType,
+		PayloadLength:  0,
+		PayloadStream:  nil,
+	}
+
+	response, err := app.HandleMessage(ctx, msg)
+	require.NoError(t, err)
+
+	// Type assert to ChallengeResponse
+	challengeResponse, ok := response.(*protocol.ChallengeResponse)
+	require.True(t, ok, "Expected ChallengeResponse")
+	assert.Equal(t, testChallenge, challengeResponse.Challenge)
+
+	mockService.AssertExpectations(t)
+}
+
+func TestWisdomApplication_HandleChallengeRequest_ServiceError(t *testing.T) {
+	mockService := mocks.NewMockWisdomService(t)
+	app := NewWisdomApplication(mockService)
+
+	// Mock service error
+	mockService.On("GenerateChallenge", mock.Anything, "quotes").Return(nil, errors.New("service error"))
+
+	ctx := context.Background()
+	msg := &protocol.Message{
+		Type:           protocol.ChallengeRequestType,
+		PayloadLength:  0,
+		PayloadStream:  nil,
+	}
+
+	response, err := app.HandleMessage(ctx, msg)
+	require.NoError(t, err)
+
+	// Type assert to ErrorResponse
+	errorResponse, ok := response.(*protocol.ErrorResponse)
+	require.True(t, ok, "Expected ErrorResponse")
+	assert.Equal(t, protocol.ErrServerError, errorResponse.Code)
+	assert.Equal(t, "Contact administrator", errorResponse.Message)
+
+	mockService.AssertExpectations(t)
+}
+
+func TestWisdomApplication_HandleSolutionRequest_Success(t *testing.T) {
+	mockService := mocks.NewMockWisdomService(t)
+	app := NewWisdomApplication(mockService)
+
+	// Create test solution request
+	testChallenge := challenge.Challenge{
+		Resource:   "quotes",
+		Timestamp:  12345,
+		Difficulty: 4,
+		Random:     []byte("test"),
+		HMAC:       []byte("signature"),
+	}
+
+	solutionPayload := protocol.SolutionRequest{
+		Challenge: testChallenge,
+		Nonce:     12345,
+	}
+
+	payloadJSON, err := json.Marshal(solutionPayload)
+	require.NoError(t, err)
+
+	testQuote := &quotes.Quote{
+		Text:   "Test quote",
+		Author: "Test Author",
+	}
+
+	// Mock successful verification and quote retrieval
+	mockService.On("VerifySolution", mock.Anything, mock.AnythingOfType("*challenge.Solution")).Return(nil)
+	mockService.On("GetQuote", mock.Anything).Return(testQuote, nil)
+
+	ctx := context.Background()
+	msg := &protocol.Message{
+		Type:           protocol.SolutionRequestType,
+		PayloadLength:  uint32(len(payloadJSON)),
+		PayloadStream:  bytes.NewReader(payloadJSON),
+	}
+
+	response, err := app.HandleMessage(ctx, msg)
+	require.NoError(t, err)
+
+	// Type assert to SolutionResponse
+	solutionResponse, ok := response.(*protocol.SolutionResponse)
+	require.True(t, ok, "Expected SolutionResponse")
+	assert.Equal(t, testQuote, solutionResponse.Quote)
+
+	mockService.AssertExpectations(t)
+}
+
+func TestWisdomApplication_HandleSolutionRequest_InvalidJSON(t *testing.T) {
+	mockService := mocks.NewMockWisdomService(t)
+	app := NewWisdomApplication(mockService)
+
+	invalidJSON := []byte("invalid json")
+	ctx := context.Background()
+	msg := &protocol.Message{
+		Type:           protocol.SolutionRequestType,
+		PayloadLength:  uint32(len(invalidJSON)),
+		PayloadStream:  bytes.NewReader(invalidJSON),
+	}
+
+	response, err := app.HandleMessage(ctx, msg)
+	require.NoError(t, err)
+
+	// Type assert to ErrorResponse
+	errorResponse, ok := response.(*protocol.ErrorResponse)
+	require.True(t, ok, "Expected ErrorResponse")
+	assert.Equal(t, protocol.ErrMalformedMessage, errorResponse.Code)
+	assert.Equal(t, "invalid solution format", errorResponse.Message)
+
+	mockService.AssertNotCalled(t, "VerifySolution")
+	mockService.AssertNotCalled(t, "GetQuote")
+}
+
+func TestWisdomApplication_HandleSolutionRequest_VerificationFailed(t *testing.T) {
+	mockService := mocks.NewMockWisdomService(t)
+	app := NewWisdomApplication(mockService)
+
+	// Create test solution request
+	testChallenge := challenge.Challenge{
+		Resource:   "quotes",
+		Timestamp:  12345,
+		Difficulty: 4,
+		Random:     []byte("test"),
+		HMAC:       []byte("signature"),
+	}
+
+	solutionPayload := protocol.SolutionRequest{
+		Challenge: testChallenge,
+		Nonce:     12345,
+	}
+
+	payloadJSON, err := json.Marshal(solutionPayload)
+	require.NoError(t, err)
+
+	// Mock verification failure
+	mockService.On("VerifySolution", mock.Anything, mock.AnythingOfType("*challenge.Solution")).Return(service.ErrInvalidSolution)
+
+	ctx := context.Background()
+	msg := &protocol.Message{
+		Type:           protocol.SolutionRequestType,
+		PayloadLength:  uint32(len(payloadJSON)),
+		PayloadStream:  bytes.NewReader(payloadJSON),
+	}
+
+	response, err := app.HandleMessage(ctx, msg)
+	require.NoError(t, err)
+
+	// Type assert to ErrorResponse
+	errorResponse, ok := response.(*protocol.ErrorResponse)
+	require.True(t, ok, "Expected ErrorResponse")
+	assert.Equal(t, protocol.ErrInvalidSolution, errorResponse.Code)
+	assert.Equal(t, "solution verification failed", errorResponse.Message)
+
+	mockService.AssertExpectations(t)
+	mockService.AssertNotCalled(t, "GetQuote")
+}
+
+func TestWisdomApplication_HandleSolutionRequest_QuoteServiceError(t *testing.T) {
+	mockService := mocks.NewMockWisdomService(t)
+	app := NewWisdomApplication(mockService)
+
+	// Create test solution request
+	testChallenge := challenge.Challenge{
+		Resource:   "quotes",
+		Timestamp:  12345,
+		Difficulty: 4,
+		Random:     []byte("test"),
+		HMAC:       []byte("signature"),
+	}
+
+	solutionPayload := protocol.SolutionRequest{
+		Challenge: testChallenge,
+		Nonce:     12345,
+	}
+
+	payloadJSON, err := json.Marshal(solutionPayload)
+	require.NoError(t, err)
+
+	// Mock successful verification but quote service error
+	mockService.On("VerifySolution", mock.Anything, mock.AnythingOfType("*challenge.Solution")).Return(nil)
+	mockService.On("GetQuote", mock.Anything).Return(nil, errors.New("quote service error"))
+
+	ctx := context.Background()
+	msg := &protocol.Message{
+		Type:           protocol.SolutionRequestType,
+		PayloadLength:  uint32(len(payloadJSON)),
+		PayloadStream:  bytes.NewReader(payloadJSON),
+	}
+
+	response, err := app.HandleMessage(ctx, msg)
+	require.NoError(t, err)
+
+	// Type assert to ErrorResponse
+	errorResponse, ok := response.(*protocol.ErrorResponse)
+	require.True(t, ok, "Expected ErrorResponse")
+	assert.Equal(t, protocol.ErrServerError, errorResponse.Code)
+	assert.Equal(t, "Contact administrator", errorResponse.Message)
+
+	mockService.AssertExpectations(t)
+}
+
+func TestWisdomApplication_HandleMessage_ContextCancellation(t *testing.T) {
+	mockService := mocks.NewMockWisdomService(t)
+	app := NewWisdomApplication(mockService)
+
+	// Create cancelled context
+	ctx, cancel := context.WithCancel(context.Background())
+	cancel()
+
+	// Mock service to respect context cancellation
+	mockService.On("GenerateChallenge", mock.Anything, "quotes").Return(nil, context.Canceled)
+
+	msg := &protocol.Message{
+		Type:           protocol.ChallengeRequestType,
+		PayloadLength:  0,
+		PayloadStream:  nil,
+	}
+
+	response, err := app.HandleMessage(ctx, msg)
+	require.NoError(t, err)
+
+	// Type assert to ErrorResponse
+	errorResponse, ok := response.(*protocol.ErrorResponse)
+	require.True(t, ok, "Expected ErrorResponse")
+	assert.Equal(t, protocol.ErrServerError, errorResponse.Code)
+
+	mockService.AssertExpectations(t)
+}
+
+func TestResponseEncoding(t *testing.T) {
+	// Test ChallengeResponse encoding produces valid binary format
+	testChallenge := &challenge.Challenge{
+		Resource:   "quotes",
+		Timestamp:  12345,
+		Difficulty: 4,
+		Random:     []byte("test"),
+		HMAC:       []byte("signature"),
+	}
+
+	challengeResponse := &protocol.ChallengeResponse{Challenge: testChallenge}
+	var buf bytes.Buffer
+	err := challengeResponse.Encode(&buf)
+	require.NoError(t, err)
+
+	// Verify binary format
+	data := buf.Bytes()
+	assert.GreaterOrEqual(t, len(data), 5) // At least header size
+
+	// Check message type
+	assert.Equal(t, byte(protocol.ChallengeResponseType), data[0])
+
+	// Check payload contains expected data
+	payload := string(data[5:]) // Skip header
+	assert.Contains(t, payload, "quotes")
+	assert.Contains(t, payload, "12345")
+}
diff --git a/internal/application/mocks/mock_wisdom_service.go b/internal/application/mocks/mock_wisdom_service.go
new file mode 100644
index 0000000..eb039bb
--- /dev/null
+++ b/internal/application/mocks/mock_wisdom_service.go
@@ -0,0 +1,203 @@
+// Code generated by mockery v2.53.5. DO NOT EDIT.
+
+package mocks
+
+import (
+	context "context"
+	challenge "hash-of-wisdom/internal/pow/challenge"
+
+	mock "github.com/stretchr/testify/mock"
+
+	quotes "hash-of-wisdom/internal/quotes"
+)
+
+// MockWisdomService is an autogenerated mock type for the WisdomService type
+type MockWisdomService struct {
+	mock.Mock
+}
+
+type MockWisdomService_Expecter struct {
+	mock *mock.Mock
+}
+
+func (_m *MockWisdomService) EXPECT() *MockWisdomService_Expecter {
+	return &MockWisdomService_Expecter{mock: &_m.Mock}
+}
+
+// GenerateChallenge provides a mock function with given fields: ctx, resource
+func (_m *MockWisdomService) GenerateChallenge(ctx context.Context, resource string) (*challenge.Challenge, error) {
+	ret := _m.Called(ctx, resource)
+
+	if len(ret) == 0 {
+		panic("no return value specified for GenerateChallenge")
+	}
+
+	var r0 *challenge.Challenge
+	var r1 error
+	if rf, ok := ret.Get(0).(func(context.Context, string) (*challenge.Challenge, error)); ok {
+		return rf(ctx, resource)
+	}
+	if rf, ok := ret.Get(0).(func(context.Context, string) *challenge.Challenge); ok {
+		r0 = rf(ctx, resource)
+	} else {
+		if ret.Get(0) != nil {
+			r0 = ret.Get(0).(*challenge.Challenge)
+		}
+	}
+
+	if rf, ok := ret.Get(1).(func(context.Context, string) error); ok {
+		r1 = rf(ctx, resource)
+	} else {
+		r1 = ret.Error(1)
+	}
+
+	return r0, r1
+}
+
+// MockWisdomService_GenerateChallenge_Call is a *mock.Call that shadows Run/Return methods with type explicit version for method 'GenerateChallenge'
+type MockWisdomService_GenerateChallenge_Call struct {
+	*mock.Call
+}
+
+// GenerateChallenge is a helper method to define mock.On call
+//   - ctx context.Context
+//   - resource string
+func (_e *MockWisdomService_Expecter) GenerateChallenge(ctx interface{}, resource interface{}) *MockWisdomService_GenerateChallenge_Call {
+	return &MockWisdomService_GenerateChallenge_Call{Call: _e.mock.On("GenerateChallenge", ctx, resource)}
+}
+
+func (_c *MockWisdomService_GenerateChallenge_Call) Run(run func(ctx context.Context, resource string)) *MockWisdomService_GenerateChallenge_Call {
+	_c.Call.Run(func(args mock.Arguments) {
+		run(args[0].(context.Context), args[1].(string))
+	})
+	return _c
+}
+
+func (_c *MockWisdomService_GenerateChallenge_Call) Return(_a0 *challenge.Challenge, _a1 error) *MockWisdomService_GenerateChallenge_Call {
+	_c.Call.Return(_a0, _a1)
+	return _c
+}
+
+func (_c *MockWisdomService_GenerateChallenge_Call) RunAndReturn(run func(context.Context, string) (*challenge.Challenge, error)) *MockWisdomService_GenerateChallenge_Call {
+	_c.Call.Return(run)
+	return _c
+}
+
+// GetQuote provides a mock function with given fields: ctx
+func (_m *MockWisdomService) GetQuote(ctx context.Context) (*quotes.Quote, error) {
+	ret := _m.Called(ctx)
+
+	if len(ret) == 0 {
+		panic("no return value specified for GetQuote")
+	}
+
+	var r0 *quotes.Quote
+	var r1 error
+	if rf, ok := ret.Get(0).(func(context.Context) (*quotes.Quote, error)); ok {
+		return rf(ctx)
+	}
+	if rf, ok := ret.Get(0).(func(context.Context) *quotes.Quote); ok {
+		r0 = rf(ctx)
+	} else {
+		if ret.Get(0) != nil {
+			r0 = ret.Get(0).(*quotes.Quote)
+		}
+	}
+
+	if rf, ok := ret.Get(1).(func(context.Context) error); ok {
+		r1 = rf(ctx)
+	} else {
+		r1 = ret.Error(1)
+	}
+
+	return r0, r1
+}
+
+// MockWisdomService_GetQuote_Call is a *mock.Call that shadows Run/Return methods with type explicit version for method 'GetQuote'
+type MockWisdomService_GetQuote_Call struct {
+	*mock.Call
+}
+
+// GetQuote is a helper method to define mock.On call
+//   - ctx context.Context
+func (_e *MockWisdomService_Expecter) GetQuote(ctx interface{}) *MockWisdomService_GetQuote_Call {
+	return &MockWisdomService_GetQuote_Call{Call: _e.mock.On("GetQuote", ctx)}
+}
+
+func (_c *MockWisdomService_GetQuote_Call) Run(run func(ctx context.Context)) *MockWisdomService_GetQuote_Call {
+	_c.Call.Run(func(args mock.Arguments) {
+		run(args[0].(context.Context))
+	})
+	return _c
+}
+
+func (_c *MockWisdomService_GetQuote_Call) Return(_a0 *quotes.Quote, _a1 error) *MockWisdomService_GetQuote_Call {
+	_c.Call.Return(_a0, _a1)
+	return _c
+}
+
+func (_c *MockWisdomService_GetQuote_Call) RunAndReturn(run func(context.Context) (*quotes.Quote, error)) *MockWisdomService_GetQuote_Call {
+	_c.Call.Return(run)
+	return _c
+}
+
+// VerifySolution provides a mock function with given fields: ctx, solution
+func (_m *MockWisdomService) VerifySolution(ctx context.Context, solution *challenge.Solution) error {
+	ret := _m.Called(ctx, solution)
+
+	if len(ret) == 0 {
+		panic("no return value specified for VerifySolution")
+	}
+
+	var r0 error
+	if rf, ok := ret.Get(0).(func(context.Context, *challenge.Solution) error); ok {
+		r0 = rf(ctx, solution)
+	} else {
+		r0 = ret.Error(0)
+	}
+
+	return r0
+}
+
+// MockWisdomService_VerifySolution_Call is a *mock.Call that shadows Run/Return methods with type explicit version for method 'VerifySolution'
+type MockWisdomService_VerifySolution_Call struct {
+	*mock.Call
+}
+
+// VerifySolution is a helper method to define mock.On call
+//   - ctx context.Context
+//   - solution *challenge.Solution
+func (_e *MockWisdomService_Expecter) VerifySolution(ctx interface{}, solution interface{}) *MockWisdomService_VerifySolution_Call {
+	return &MockWisdomService_VerifySolution_Call{Call: _e.mock.On("VerifySolution", ctx, solution)}
+}
+
+func (_c *MockWisdomService_VerifySolution_Call) Run(run func(ctx context.Context, solution *challenge.Solution)) *MockWisdomService_VerifySolution_Call {
+	_c.Call.Run(func(args mock.Arguments) {
+		run(args[0].(context.Context), args[1].(*challenge.Solution))
+	})
+	return _c
+}
+
+func (_c *MockWisdomService_VerifySolution_Call) Return(_a0 error) *MockWisdomService_VerifySolution_Call {
+	_c.Call.Return(_a0)
+	return _c
+}
+
+func (_c *MockWisdomService_VerifySolution_Call) RunAndReturn(run func(context.Context, *challenge.Solution) error) *MockWisdomService_VerifySolution_Call {
+	_c.Call.Return(run)
+	return _c
+}
+
+// NewMockWisdomService creates a new instance of MockWisdomService. It also registers a testing interface on the mock and a cleanup function to assert the mocks expectations.
+// The first argument is typically a *testing.T value.
+func NewMockWisdomService(t interface {
+	mock.TestingT
+	Cleanup(func())
+}) *MockWisdomService {
+	mock := &MockWisdomService{}
+	mock.Mock.Test(t)
+
+	t.Cleanup(func() { mock.AssertExpectations(t) })
+
+	return mock
+}