diff --git a/TODO.md b/TODO.md
index 865e214..95a0502 100644
--- a/TODO.md
+++ b/TODO.md
@@ -2,14 +2,14 @@
 
 ## Critical Issues
 
-### 1. Custom Layout Persistence (extension.js:297)
+### 1. Custom Layout Persistence ✅ COMPLETED
 **Priority: High**
-- [ ] Custom layouts are only stored in memory
-- [ ] Layouts are lost when extension reloads or Cinnamon restarts
-- [ ] Need to implement file-based storage
-- [ ] Location: `~/.config/gridsnap/layouts.json` or similar
-- [ ] Save layouts when created in graphical editor
-- [ ] Load layouts on extension initialization
+- [x] Custom layouts are only stored in memory
+- [x] Layouts are lost when extension reloads or Cinnamon restarts
+- [x] Need to implement file-based storage
+- [x] Location: `~/.local/share/gridsnap/layouts.json`
+- [x] Save layouts when created in graphical editor
+- [x] Load layouts on extension initialization
 
 ### 2. Remove Last Zone Implementation (extension.js:236-274)
 **Priority: Medium**
diff --git a/extension.js b/extension.js
index ee421b8..860848d 100644
--- a/extension.js
+++ b/extension.js
@@ -5,9 +5,15 @@ const Clutter = imports.gi.Clutter;
 const Lang = imports.lang;
 const Mainloop = imports.mainloop;
 const Settings = imports.ui.settings;
+const GLib = imports.gi.GLib;
+const Gio = imports.gi.Gio;
 
 let zoneManager;
 
+// Storage path for custom layouts
+const STORAGE_DIR = GLib.get_user_data_dir() + '/gridsnap';
+const LAYOUTS_FILE = STORAGE_DIR + '/layouts.json';
+
 // Default zone layouts
 const DEFAULT_LAYOUTS = {
     'grid-2x2': {
@@ -291,11 +297,11 @@ ZoneEditor.prototype = {
                 zones: this.zones
             };
             zoneManager.currentLayout = layoutId;
-            
+
+            // Persist to file for permanent storage
+            zoneManager._saveLayouts();
+
             Main.notify('GridSnap', 'Layout saved: ' + layoutName);
-            
-            // TODO: Persist to file for permanent storage
-            global.log('GridSnap: Layout saved - ' + JSON.stringify(zoneManager.layouts[layoutId]));
         }
         
         this._cancelEditor();
@@ -330,12 +336,15 @@ ZoneManager.prototype = {
     _init: function() {
         this.overlay = null;
         this.currentLayout = 'grid-2x2';
-        this.layouts = DEFAULT_LAYOUTS;
+        this.layouts = {};
         this.isShowing = false;
         this.dragInProgress = false;
         this.draggedWindow = null;
         this.editor = new ZoneEditor();
 
+        // Load layouts (default + saved custom layouts)
+        this._loadLayouts();
+
         // Connect to window grab events
         this._connectSignals();
         this._setupKeybindings();
@@ -379,6 +388,58 @@ ZoneManager.prototype = {
             );
         }
     },
+
+    _loadLayouts: function() {
+        // Start with default layouts
+        for (let layoutId in DEFAULT_LAYOUTS) {
+            this.layouts[layoutId] = DEFAULT_LAYOUTS[layoutId];
+        }
+
+        // Try to load custom layouts from file
+        try {
+            let file = Gio.File.new_for_path(LAYOUTS_FILE);
+            if (file.query_exists(null)) {
+                let [success, contents] = file.load_contents(null);
+                if (success) {
+                    let customLayouts = JSON.parse(contents.toString());
+                    // Merge custom layouts with defaults
+                    for (let layoutId in customLayouts) {
+                        this.layouts[layoutId] = customLayouts[layoutId];
+                    }
+                    global.log('GridSnap: Loaded ' + Object.keys(customLayouts).length + ' custom layout(s)');
+                }
+            }
+        } catch(e) {
+            global.logError('GridSnap: Error loading custom layouts - ' + e);
+        }
+    },
+
+    _saveLayouts: function() {
+        try {
+            // Create directory if it doesn't exist
+            let dir = Gio.File.new_for_path(STORAGE_DIR);
+            if (!dir.query_exists(null)) {
+                dir.make_directory_with_parents(null);
+            }
+
+            // Extract only custom layouts (those starting with 'custom-')
+            let customLayouts = {};
+            for (let layoutId in this.layouts) {
+                if (layoutId.startsWith('custom-')) {
+                    customLayouts[layoutId] = this.layouts[layoutId];
+                }
+            }
+
+            // Save to file
+            let file = Gio.File.new_for_path(LAYOUTS_FILE);
+            let contents = JSON.stringify(customLayouts, null, 2);
+            file.replace_contents(contents, null, false, Gio.FileCreateFlags.REPLACE_DESTINATION, null);
+
+            global.log('GridSnap: Saved ' + Object.keys(customLayouts).length + ' custom layout(s) to ' + LAYOUTS_FILE);
+        } catch(e) {
+            global.logError('GridSnap: Error saving custom layouts - ' + e);
+        }
+    },
     
     _checkModifiersDuringDrag: function() {
         if (!this.dragInProgress) {