diff --git a/docs/virtual-llms.md b/docs/virtual-llms.md
index 008746b..0a5629c 100644
--- a/docs/virtual-llms.md
+++ b/docs/virtual-llms.md
@@ -97,11 +97,11 @@ route branches on it server-side.
 
 ## Lifecycle in detail
 
-| State          | What it means                                                         |
-|----------------|-----------------------------------------------------------------------|
-| `active`       | Heartbeat received within the last 90 s and the SSE channel is open.  |
+| State          | What it means                                                                   |
+|----------------|---------------------------------------------------------------------------------|
+| `active`       | Heartbeat received within the last 90 s and the SSE channel is open.            |
 | `inactive`     | Either the SSE closed or the heartbeat watchdog tripped. Inference returns 503. |
-| `hibernating`  | Reserved for v2 (wake-on-demand). v1 never writes this state.         |
+| `hibernating`  | Publisher is online but the backend is asleep; the next inference triggers a `wake` task before relaying. |
 
 Two timers on mcpd run the GC sweep:
 
@@ -132,10 +132,75 @@ a finalized `CompletionResult`, not a token stream. Streaming requests
 therefore arrive at the caller as a single delta + `[DONE]`. Real
 per-token streaming is a v2 concern.
 
+## Wake-on-demand (v2)
+
+A provider whose backend hibernates (a vLLM instance that suspends
+when idle, an Ollama daemon that exits when nothing's connected, …)
+can declare a **wake recipe** in mcplocal config. When that provider's
+`isAvailable()` returns false at registrar startup, the row is
+published as `status=hibernating`. The next inference request that
+hits the row triggers the recipe and waits for the backend to come up
+before relaying.
+
+Two recipe types:
+
+```jsonc
+// HTTP — POST to a "wake controller" that starts the backend out of band.
+{
+  "name": "vllm-local",
+  "type": "openai",
+  "model": "...",
+  "publish": true,
+  "wake": {
+    "type": "http",
+    "url": "http://10.0.0.50:9090/wake/vllm",
+    "method": "POST",
+    "headers": { "Authorization": "Bearer ..." },
+    "maxWaitSeconds": 60
+  }
+}
+```
+
+```jsonc
+// command — spawn a local process (systemd, wakeonlan, custom script).
+{
+  "name": "vllm-local",
+  "type": "openai",
+  "model": "...",
+  "publish": true,
+  "wake": {
+    "type": "command",
+    "command": "/usr/local/bin/start-vllm",
+    "args": ["--profile", "qwen3"],
+    "maxWaitSeconds": 120
+  }
+}
+```
+
+How a request flows when the row is `hibernating`:
+
+```
+client → mcpd POST /api/v1/llms/<name>/infer
+         mcpd: status === hibernating → push wake task on SSE
+         mcplocal: receive wake task → run recipe → poll isAvailable()
+                   → heartbeat each tick → POST { ok: true } back
+         mcpd: flip row → active, push the original infer task
+         mcplocal: run inference → POST result back
+mcpd → client (forwards the inference result)
+```
+
+Concurrent infers for the same hibernating Llm share a single wake
+task — only the first request triggers the recipe; later ones await
+the same in-flight wake promise. After the wake settles, every queued
+infer dispatches in order.
+
+If the recipe fails (HTTP non-2xx, command exits non-zero, or the
+provider doesn't come up within `maxWaitSeconds`), every queued infer
+is rejected with a clear error and the row stays `hibernating` —
+the next request gets a fresh wake attempt.
+
 ## Roadmap (later stages)
 
-- **v2 — Wake-on-demand**: Secret-stored "wake recipe" so mcpd can ask
-  mcplocal to start a hibernating backend before sending inference.
 - **v3 — Virtual agents**: mcplocal publishes its local agent configs
   (model + system prompt + sampling defaults) into mcpd's `Agent` table.
 - **v4 — LB pool by model**: agents can target a model name instead of
diff --git a/src/mcplocal/tests/smoke/virtual-llm.smoke.test.ts b/src/mcplocal/tests/smoke/virtual-llm.smoke.test.ts
index 1586a1a..c332b9b 100644
--- a/src/mcplocal/tests/smoke/virtual-llm.smoke.test.ts
+++ b/src/mcplocal/tests/smoke/virtual-llm.smoke.test.ts
@@ -207,3 +207,137 @@ describe('virtual-LLM smoke', () => {
     expect(res.body).toMatch(/publisher offline|inactive/);
   }, 30_000);
 });
+
+// ── v2: hibernating + wake-on-demand ──
+
+const HIBERNATING_NAME = `smoke-virtual-hib-${SUFFIX}`;
+let hibernatingRegistrar: VirtualLlmRegistrar | null = null;
+
+/**
+ * Provider that's "asleep" until \`wakeFn()\` is called. Used to drive
+ * the wake-on-demand smoke without standing up an actual sleep/wake
+ * controller — we flip the bool from inside the wake recipe.
+ */
+function makeSleepingProvider(name: string, content: string): {
+  provider: LlmProvider;
+  wakeFn: () => void;
+  wakeCount: () => number;
+} {
+  let awake = false;
+  let count = 0;
+  const provider: LlmProvider = {
+    name,
+    async complete(): Promise<CompletionResult> {
+      if (!awake) throw new Error('provider not awake');
+      return {
+        content,
+        toolCalls: [],
+        usage: { promptTokens: 1, completionTokens: 4, totalTokens: 5 },
+        finishReason: 'stop',
+      };
+    },
+    async listModels() { return []; },
+    async isAvailable() { return awake; },
+  };
+  return {
+    provider,
+    wakeFn: () => { awake = true; count += 1; },
+    wakeCount: () => count,
+  };
+}
+
+describe('virtual-LLM smoke — wake-on-demand', () => {
+  let wakeServerUrl: string;
+  let wakeServer: http.Server;
+  let wakeFn: (() => void) | null = null;
+
+  beforeAll(async () => {
+    if (!mcpdUp) return;
+    // Tiny in-process "wake controller" — receives the http wake recipe
+    // POST and flips the local provider's `awake` bool.
+    await new Promise<void>((resolve) => {
+      wakeServer = http.createServer((req, res) => {
+        if (req.url === '/wake' && wakeFn !== null) {
+          wakeFn();
+          res.writeHead(200);
+          res.end('woken');
+          return;
+        }
+        res.writeHead(404);
+        res.end();
+      });
+      wakeServer.listen(0, '127.0.0.1', () => {
+        const addr = wakeServer.address();
+        if (addr === null || typeof addr === 'string') throw new Error('listen failed');
+        wakeServerUrl = `http://127.0.0.1:${String(addr.port)}/wake`;
+        resolve();
+      });
+    });
+  });
+
+  afterAll(async () => {
+    if (hibernatingRegistrar !== null) hibernatingRegistrar.stop();
+    if (wakeServer) await new Promise<void>((r) => wakeServer.close(() => r()));
+    if (mcpdUp) {
+      const list = await httpRequest('GET', `${MCPD_URL}/api/v1/llms`, undefined);
+      if (list.status === 200) {
+        const rows = JSON.parse(list.body) as Array<{ id: string; name: string }>;
+        const row = rows.find((r) => r.name === HIBERNATING_NAME);
+        if (row !== undefined) {
+          await httpRequest('DELETE', `${MCPD_URL}/api/v1/llms/${row.id}`, undefined);
+        }
+      }
+    }
+  });
+
+  it('publishes a sleeping provider as kind=virtual / status=hibernating', async () => {
+    if (!mcpdUp) return;
+    const token = readToken();
+    if (token === null) return;
+    const sleeping = makeSleepingProvider(HIBERNATING_NAME, 'awake now');
+    wakeFn = sleeping.wakeFn;
+
+    const published: RegistrarPublishedProvider[] = [{
+      provider: sleeping.provider,
+      type: 'openai',
+      model: 'fake-hibernating',
+      tier: 'fast',
+      wake: { type: 'http', url: wakeServerUrl, method: 'POST', maxWaitSeconds: 5 },
+    }];
+    hibernatingRegistrar = new VirtualLlmRegistrar({
+      mcpdUrl: MCPD_URL,
+      token,
+      publishedProviders: published,
+      sessionFilePath: join(tempDir, 'hib-session'),
+      log: { info: () => {}, warn: () => {}, error: () => {} },
+      heartbeatIntervalMs: 60_000,
+    });
+    await hibernatingRegistrar.start();
+    await new Promise((r) => setTimeout(r, 400));
+
+    const res = await httpRequest('GET', `${MCPD_URL}/api/v1/llms`, undefined);
+    expect(res.status).toBe(200);
+    const rows = JSON.parse(res.body) as Array<{ name: string; kind: string; status: string }>;
+    const row = rows.find((r) => r.name === HIBERNATING_NAME);
+    expect(row, `${HIBERNATING_NAME} must be present`).toBeDefined();
+    expect(row!.kind).toBe('virtual');
+    expect(row!.status).toBe('hibernating');
+  }, 30_000);
+
+  it('first inference triggers the wake recipe and then completes', async () => {
+    if (!mcpdUp) return;
+    // wakeFn was set in the previous test; it flips the provider's
+    // `awake` bool when the wake POST lands.
+    const res = await httpRequest('POST', `${MCPD_URL}/api/v1/llms/${HIBERNATING_NAME}/infer`, {
+      messages: [{ role: 'user', content: 'wake then say hello' }],
+    });
+    expect(res.status).toBe(200);
+    const body = JSON.parse(res.body) as { choices?: Array<{ message?: { content?: string } }> };
+    expect(body.choices?.[0]?.message?.content).toBe('awake now');
+
+    // After the wake, the row should now be active.
+    const list = await httpRequest('GET', `${MCPD_URL}/api/v1/llms`, undefined);
+    const rows = JSON.parse(list.body) as Array<{ name: string; status: string }>;
+    expect(rows.find((r) => r.name === HIBERNATING_NAME)?.status).toBe('active');
+  }, 30_000);
+});