diff --git a/zddc/internal/zddc/cascade.go b/zddc/internal/zddc/cascade.go
index cd2bb78..1e32bbe 100644
--- a/zddc/internal/zddc/cascade.go
+++ b/zddc/internal/zddc/cascade.go
@@ -1,6 +1,7 @@
 package zddc
 
 import (
+	"archive/zip"
 	"os"
 	"path/filepath"
 	"strings"
@@ -126,23 +127,27 @@ func EffectivePolicy(fsRoot, dirPath string) (PolicyChain, error) {
 		return cached.(PolicyChain), nil
 	}
 
-	// Build policy chain: read each on-disk .zddc file.
+	// Build policy chain: read each level's on-disk policy. A level's
+	// contribution is an optional .zddc.zip policy bundle mounted here (a whole
+	// subtree: its own-level member at this level, its deeper members threaded
+	// to descendants via Paths) with the plain <dir>/.zddc overlaid on top
+	// (most-specific human edit wins). Either, both, or neither may be present.
 	onDisk := make([]ZddcFile, 0, len(dirs))
 	hasAny := false
 	for _, dir := range dirs {
-		zddcPath := filepath.Join(dir, ".zddc")
-		_, err := os.Stat(zddcPath)
-		if err == nil {
+		level := ZddcFile{}
+		if zipZf, ok := zipPolicyAt(dir); ok {
 			hasAny = true
-			parsed, perr := ParseFile(zddcPath)
-			if perr != nil {
-				onDisk = append(onDisk, ZddcFile{})
-			} else {
-				onDisk = append(onDisk, parsed)
-			}
-		} else {
-			onDisk = append(onDisk, ZddcFile{})
+			level = zipZf
 		}
+		zddcPath := filepath.Join(dir, ".zddc")
+		if _, err := os.Stat(zddcPath); err == nil {
+			hasAny = true
+			if parsed, perr := ParseFile(zddcPath); perr == nil {
+				level = mergeOverlay(level, parsed)
+			}
+		}
+		onDisk = append(onDisk, level)
 	}
 
 	// Walk ancestor paths: trees alongside the on-disk chain. Each
@@ -254,6 +259,31 @@ func EffectivePolicy(fsRoot, dirPath string) (PolicyChain, error) {
 	return chain, nil
 }
 
+// zipPolicyAt loads an operator policy bundle at <dir>/.zddc.zip and assembles
+// it into a single nested ZddcFile (its own-level content + Paths threading its
+// deeper members to descendants), or (_, false) when the bundle is absent,
+// unreadable, or carries no .zddc members (e.g. a tool-HTML-only bundle — those
+// are ignored for policy). Mounting the bundle at dir contributes a policy
+// subtree there; inherit:false in its resolved .zddc makes that subtree a
+// self-contained island. Member paths use "*" for the any-segment wildcard,
+// resolved by the same literal-first matching as paths:.
+func zipPolicyAt(dir string) (ZddcFile, bool) {
+	zipPath := filepath.Join(dir, ".zddc.zip")
+	if fi, err := os.Stat(zipPath); err != nil || fi.IsDir() {
+		return ZddcFile{}, false
+	}
+	zr, err := zip.OpenReader(zipPath)
+	if err != nil {
+		return ZddcFile{}, false
+	}
+	defer zr.Close()
+	tree, err := LoadPolicyTreeFromFS(zr, ".")
+	if err != nil || len(tree) == 0 {
+		return ZddcFile{}, false
+	}
+	return tree.Assemble(), true
+}
+
 // EffectiveFieldCodes returns the merged field-code vocabulary
 // visible at the leaf of this chain. Walks root → leaf, applying
 // map-merge per top-level key (a leaf entry for the same code
diff --git a/zddc/internal/zddc/cascade_zip_test.go b/zddc/internal/zddc/cascade_zip_test.go
new file mode 100644
index 0000000..27ec09b
--- /dev/null
+++ b/zddc/internal/zddc/cascade_zip_test.go
@@ -0,0 +1,85 @@
+package zddc
+
+import (
+	"archive/zip"
+	"os"
+	"path/filepath"
+	"testing"
+)
+
+func writeTestZip(t *testing.T, zipPath string, members map[string]string) {
+	t.Helper()
+	f, err := os.Create(zipPath)
+	if err != nil {
+		t.Fatal(err)
+	}
+	defer f.Close()
+	zw := zip.NewWriter(f)
+	for name, body := range members {
+		w, err := zw.Create(name)
+		if err != nil {
+			t.Fatal(err)
+		}
+		if _, err := w.Write([]byte(body)); err != nil {
+			t.Fatal(err)
+		}
+	}
+	if err := zw.Close(); err != nil {
+		t.Fatal(err)
+	}
+}
+
+// A .zddc.zip dropped at any directory mounts a policy subtree there: its
+// own-level member governs that directory, its "*"/named members govern
+// descendants, and inherit:false makes it a self-contained island that ignores
+// the ancestor cascade + embedded site defaults.
+func TestZddcZipMountedAtSubtree(t *testing.T) {
+	root := t.TempDir()
+	// Site root: project_team has a member; embedded defaults apply below.
+	if err := os.WriteFile(filepath.Join(root, ".zddc"),
+		[]byte("roles:\n  project_team:\n    members: [team@x]\n"), 0o644); err != nil {
+		t.Fatal(err)
+	}
+	for _, d := range []string{"Proj/special", "Proj/normal"} {
+		if err := os.MkdirAll(filepath.Join(root, filepath.FromSlash(d)), 0o755); err != nil {
+			t.Fatal(err)
+		}
+	}
+
+	// Drop a self-contained island at /Proj/special (inherit:false) granting
+	// only *@vendor.com, with a "*" descendant rule (read-only below).
+	// A complete island fences both layers: top-level inherit:false drops the
+	// embedded defaults + ancestor paths: contributions, and acl.inherit:false
+	// clamps the ACL level-walk so ancestor levels' grants don't leak in.
+	writeTestZip(t, filepath.Join(root, "Proj", "special", ".zddc.zip"), map[string]string{
+		".zddc":   "inherit: false\nacl:\n  inherit: false\n  permissions:\n    \"*@vendor.com\": rwcd\n",
+		"*/.zddc": "acl:\n  permissions:\n    \"*@vendor.com\": r\n",
+	})
+	InvalidateCache(root)
+
+	verbs := func(dir, email string) VerbSet {
+		chain, err := EffectivePolicy(root, filepath.Join(root, filepath.FromSlash(dir)))
+		if err != nil {
+			t.Fatalf("EffectivePolicy %s: %v", dir, err)
+		}
+		return EffectiveVerbs(chain, email)
+	}
+
+	// Bundle root member governs /Proj/special.
+	if v := verbs("Proj/special", "u@vendor.com"); !v.Has(VerbC) || !v.Has(VerbW) || !v.Has(VerbD) {
+		t.Errorf("/Proj/special vendor verbs = %v, want rwcd", v)
+	}
+	// Bundle's */.zddc governs a (virtual) descendant — read-only, deepest-wins.
+	if v := verbs("Proj/special/anychild", "u@vendor.com"); !v.Has(VerbR) || v.Has(VerbW) {
+		t.Errorf("/Proj/special/anychild vendor verbs = %v, want r only", v)
+	}
+	// inherit:false fences the site defaults: the embedded project-level
+	// project_team grant has NO effect inside the island.
+	if v := verbs("Proj/special", "team@x"); v != 0 {
+		t.Errorf("/Proj/special team verbs = %v, want none (fenced island)", v)
+	}
+	// Outside the island, the embedded project-level grant still applies.
+	if v := verbs("Proj/normal", "team@x"); !v.Has(VerbR) {
+		t.Errorf("/Proj/normal team verbs = %v, want r (embedded project_team:r)", v)
+	}
+}