diff --git a/pom.xml b/pom.xml
index e549e32..15eb9aa 100644
--- a/pom.xml
+++ b/pom.xml
@@ -69,11 +69,10 @@
             <optional>true</optional>
         </dependency>
 
-        <!-- JUnit 5 -->
+        <!-- Spring Boot Test Starter - brings JUnit 5, Mockito, MockMvc, and AssertJ -->
         <dependency>
-            <groupId>org.junit.jupiter</groupId>
-            <artifactId>junit-jupiter</artifactId>
-            <version>5.10.2</version>
+            <groupId>org.springframework.boot</groupId>
+            <artifactId>spring-boot-starter-test</artifactId>
             <scope>test</scope>
         </dependency>
     </dependencies>
diff --git a/src/main/java/com/devassistant/processor/BuildFailureEventProcessor.java b/src/main/java/com/devassistant/processor/BuildFailureEventProcessor.java
index 42a8ab0..19038b1 100644
--- a/src/main/java/com/devassistant/processor/BuildFailureEventProcessor.java
+++ b/src/main/java/com/devassistant/processor/BuildFailureEventProcessor.java
@@ -1,3 +1,81 @@
 package com.devassistant.processor;
 
-public class BuildFailureEventProcessor {}
+import com.devassistant.logging.Logger;
+import com.fasterxml.jackson.databind.JsonNode;
+import com.fasterxml.jackson.databind.ObjectMapper;
+import org.springframework.ai.chat.client.ChatClient;
+import org.springframework.stereotype.Component;
+
+/**
+ * Processes incoming Build Failure events and uses AI to explain the failure.
+ *
+ * <p>Educational Note: This processor extracts the raw CI logs from the webhook payload. It
+ * leverages the LLM as an expert systems engineer to analyze the stack trace or output, identify
+ * the most likely root cause, assign a confidence score, and suggest fixes.
+ */
+@Component
+public class BuildFailureEventProcessor implements EventProcessor {
+
+  private static final String SUPPORTED_EVENT = "build_failure";
+
+  private final ObjectMapper objectMapper;
+  private final Logger logger;
+  private final ChatClient chatClient;
+
+  public BuildFailureEventProcessor(Logger logger, ChatClient.Builder chatClientBuilder) {
+    this.objectMapper = new ObjectMapper();
+    this.logger = logger;
+    this.chatClient = chatClientBuilder.build();
+  }
+
+  @Override
+  public boolean supports(String eventType) {
+    return SUPPORTED_EVENT.equalsIgnoreCase(eventType);
+  }
+
+  @Override
+  public void processEvent(String payload) {
+    try {
+      JsonNode root = objectMapper.readTree(payload);
+      JsonNode repoNode = root.path("repository");
+      JsonNode logsNode = root.path("logs");
+
+      if (logsNode.isMissingNode() || repoNode.isMissingNode()) {
+        logger.warn("Missing logs or repository data in build failure payload.");
+        return;
+      }
+
+      String repoName = repoNode.asText();
+      String logs = logsNode.asText();
+
+      // Truncate logs to avoid exceeding LLM context limits (e.g., last 2000 chars)
+      if (logs.length() > 2000) {
+        logs = logs.substring(logs.length() - 2000);
+      }
+
+      String aiPrompt =
+          String.format(
+              "You are a Senior DevOps Engineer. Analyze the following CI build failure logs for repository '%s'.\n"
+                  + "Please provide a structured response with exactly these three sections:\n"
+                  + "Likely Cause:\n"
+                  + "Confidence:\n"
+                  + "Possible Fixes:\n\n"
+                  + "Logs:\n%s",
+              repoName, logs);
+
+      String aiExplanation = "AI Explanation not available";
+      try {
+        aiExplanation = chatClient.prompt().user(aiPrompt).call().content();
+      } catch (Exception aiException) {
+        logger.error("Failed to generate AI explanation for build failure", aiException);
+      }
+
+      logger.info("=== BUILD FAILURE DETECTED in " + repoName + " ===");
+      logger.info("AI Analysis:\n" + aiExplanation);
+      logger.info("===========================================");
+
+    } catch (Exception e) {
+      logger.error("Failed to process build failure event", e);
+    }
+  }
+}
diff --git a/src/test/java/com/devassistant/processor/BuildFailureEventProcessorIT.java b/src/test/java/com/devassistant/processor/BuildFailureEventProcessorIT.java
new file mode 100644
index 0000000..eba0569
--- /dev/null
+++ b/src/test/java/com/devassistant/processor/BuildFailureEventProcessorIT.java
@@ -0,0 +1,194 @@
+package com.devassistant.processor;
+
+import static org.assertj.core.api.Assertions.assertThat;
+import static org.junit.jupiter.api.Assertions.assertFalse;
+import static org.junit.jupiter.api.Assertions.assertTrue;
+import static org.mockito.ArgumentCaptor.forClass;
+import static org.mockito.ArgumentMatchers.anyString;
+import static org.mockito.Mockito.mock;
+import static org.mockito.Mockito.never;
+import static org.mockito.Mockito.times;
+import static org.mockito.Mockito.verify;
+import static org.mockito.Mockito.when;
+
+import com.devassistant.logging.Logger;
+import java.util.List;
+import org.junit.jupiter.api.BeforeEach;
+import org.junit.jupiter.api.Test;
+import org.mockito.ArgumentCaptor;
+import org.springframework.ai.chat.client.ChatClient;
+import org.springframework.beans.factory.annotation.Autowired;
+import org.springframework.boot.test.context.SpringBootTest;
+import org.springframework.boot.test.mock.mockito.MockBean;
+
+/**
+ * Integration test for {@link BuildFailureEventProcessor}.
+ *
+ * <p>Educational Note: Aggressive assertions are essential in a good integration test. The goal is
+ * NOT just to check that the code "doesn't crash" ({@code assertDoesNotThrow}). The goal is to
+ * verify the exact behaviour of the system:
+ *
+ * <ul>
+ *   <li>What exact values were logged? (via {@code ArgumentCaptor})
+ *   <li>How many times was a method called? (via {@code verify(mock, times(N))})
+ *   <li>Was a method NOT called when it shouldn't be? (via {@code verify(mock, never())})
+ *   <li>Does the logged output actually contain the AI response?
+ * </ul>
+ *
+ * <p>This philosophy ensures that if a developer accidentally silences the logger or changes the
+ * format of the AI prompt, the test will catch it immediately.
+ */
+@SpringBootTest
+class BuildFailureEventProcessorIT {
+
+  private static final String EXPECTED_AI_RESPONSE =
+      "Likely Cause: NullPointerException in DAO layer\n"
+          + "Confidence: 95%\n"
+          + "Possible Fixes: Add null check before the DB call";
+
+  private static final String REPO_NAME = "devops-notifier";
+
+  @Autowired private BuildFailureEventProcessor processor;
+
+  @MockBean private ChatClient.Builder chatClientBuilderMock;
+
+  @MockBean private Logger logger;
+
+  private ChatClient chatClientMock;
+  private ChatClient.ChatClientRequest chatClientRequestMock;
+  private ChatClient.ChatClientRequest.CallResponseSpec callResponseSpecMock;
+
+  /**
+   * Wire up the mock chain before each test. Using @BeforeEach avoids duplication and ensures every
+   * test gets a fresh, predictable mock state.
+   */
+  @BeforeEach
+  void setUpChatClientMock() {
+    chatClientMock = mock(ChatClient.class);
+    chatClientRequestMock = mock(ChatClient.ChatClientRequest.class);
+    callResponseSpecMock = mock(ChatClient.ChatClientRequest.CallResponseSpec.class);
+
+    when(chatClientBuilderMock.build()).thenReturn(chatClientMock);
+    when(chatClientMock.prompt()).thenReturn(chatClientRequestMock);
+    when(chatClientRequestMock.user(anyString())).thenReturn(chatClientRequestMock);
+    when(chatClientRequestMock.call()).thenReturn(callResponseSpecMock);
+    when(callResponseSpecMock.content()).thenReturn(EXPECTED_AI_RESPONSE);
+  }
+
+  @Test
+  void supports_shouldReturnTrueForBuildFailureEvent() {
+    assertTrue(processor.supports("build_failure"));
+  }
+
+  @Test
+  void supports_shouldBeCaseInsensitive() {
+    assertTrue(processor.supports("BUILD_FAILURE"));
+    assertTrue(processor.supports("Build_Failure"));
+  }
+
+  @Test
+  void supports_shouldReturnFalseForOtherEventTypes() {
+    assertFalse(processor.supports("pull_request"));
+    assertFalse(processor.supports("push"));
+    assertFalse(processor.supports("unknown_event"));
+    assertFalse(processor.supports(""));
+  }
+
+  @Test
+  void processEvent_shouldCallAIWithPromptContainingRepoNameAndLogs() {
+    String logSnippet = "ERROR: NullPointerException at com.devassistant.service.SomeService:42";
+    String payload =
+        """
+        {
+          "repository": "%s",
+          "author": "Agaba-derrick",
+          "logs": "%s"
+        }
+        """
+            .formatted(REPO_NAME, logSnippet);
+
+    processor.processEvent(payload);
+
+    // Capture the exact prompt that was sent to the AI and assert its content
+    ArgumentCaptor<String> promptCaptor = forClass(String.class);
+    verify(chatClientRequestMock, times(1)).user(promptCaptor.capture());
+
+    String capturedPrompt = promptCaptor.getValue();
+    assertThat(capturedPrompt).contains(REPO_NAME);
+    assertThat(capturedPrompt).contains(logSnippet);
+    assertThat(capturedPrompt).containsIgnoringCase("Likely Cause");
+    assertThat(capturedPrompt).containsIgnoringCase("Confidence");
+    assertThat(capturedPrompt).containsIgnoringCase("Possible Fixes");
+  }
+
+  @Test
+  void processEvent_shouldLogAIResponseContainingRepoNameAndAnalysis() {
+    String payload =
+        """
+        {
+          "repository": "%s",
+          "author": "Agaba-derrick",
+          "logs": "ERROR: NullPointerException at com.devassistant.service.SomeService:42"
+        }
+        """
+            .formatted(REPO_NAME);
+
+    processor.processEvent(payload);
+
+    // Capture all info() calls and assert on their exact content
+    ArgumentCaptor<String> logCaptor = forClass(String.class);
+    verify(logger, times(3)).info(logCaptor.capture());
+
+    List<String> allLoggedMessages = logCaptor.getAllValues();
+
+    // Assert the header log line contains the repository name
+    assertThat(allLoggedMessages.get(0)).contains("BUILD FAILURE DETECTED").contains(REPO_NAME);
+
+    // Assert the AI analysis log line contains the full AI response text
+    assertThat(allLoggedMessages.get(1))
+        .contains("AI Analysis")
+        .contains("Likely Cause: NullPointerException in DAO layer")
+        .contains("Confidence: 95%")
+        .contains("Possible Fixes: Add null check before the DB call");
+
+    // Assert the footer separator was logged exactly as defined
+    assertThat(allLoggedMessages.get(2)).contains("==========");
+  }
+
+  @Test
+  void processEvent_withMissingLogsField_shouldWarnAndNotCallAI() {
+    // A payload that is missing the required 'logs' field
+    String malformedPayload =
+        """
+        {
+          "repository": "devops-notifier"
+        }
+        """;
+
+    processor.processEvent(malformedPayload);
+
+    // Assert that a warning was logged with the correct message
+    ArgumentCaptor<String> warnCaptor = forClass(String.class);
+    verify(logger, times(1)).warn(warnCaptor.capture());
+    assertThat(warnCaptor.getValue()).containsIgnoringCase("missing");
+
+    // Assert the AI was never called because the payload was invalid
+    verify(chatClientRequestMock, never()).user(anyString());
+  }
+
+  @Test
+  void processEvent_withInvalidJson_shouldLogErrorAndNotCrash() {
+    String invalidJson = "this is not valid json {{{{";
+
+    processor.processEvent(invalidJson);
+
+    // Assert that an error was logged — the processor must not silently swallow the exception
+    ArgumentCaptor<String> errorCaptor = forClass(String.class);
+    verify(logger, times(1))
+        .error(errorCaptor.capture(), org.mockito.ArgumentMatchers.any(Throwable.class));
+    assertThat(errorCaptor.getValue()).containsIgnoringCase("failed");
+
+    // Assert the AI was never called since parsing failed
+    verify(chatClientRequestMock, never()).user(anyString());
+  }
+}