diff --git a/src/codeforerunner/cli.py b/src/codeforerunner/cli.py
index 42dcf28..4240a1c 100644
--- a/src/codeforerunner/cli.py
+++ b/src/codeforerunner/cli.py
@@ -111,7 +111,8 @@ def cmd_generate(args: argparse.Namespace) -> int:
     repo_root = Path(args.repo).resolve() if args.repo else Path.cwd()
     cfg = load_from_repo(repo_root)
 
-    provider_name = args.provider or (cfg.provider if cfg else "anthropic")
+    explicit_provider = args.provider or (cfg.provider if cfg else None)
+    provider_name = explicit_provider or "anthropic"
     model = args.model or (cfg.model if cfg else None)
     provider_cls = _providers.get(provider_name)
     provider = provider_cls()
@@ -132,8 +133,19 @@ def cmd_generate(args: argparse.Namespace) -> int:
     env_var = (cfg.api_key_env.get(provider_name) if cfg else None) or provider.default_env_var
     api_key = os.environ.get(env_var)
     if api_key is None and provider_name != "ollama":
-        print(f"error: missing API key; set ${env_var}", file=sys.stderr)
-        return 3
+        if explicit_provider is None and _providers.ollama_available():
+            provider_name = "ollama"
+            provider_cls = _providers.get("ollama")
+            provider = provider_cls()
+            if not args.model:
+                model = provider.default_model
+            print("info: no API key; falling back to Ollama (local mode)", file=sys.stderr)
+        else:
+            msg = f"error: missing API key; set ${env_var}"
+            if explicit_provider is None:
+                msg += "\nhint: start Ollama for keyless local generation (https://ollama.com)"
+            print(msg, file=sys.stderr)
+            return 3
 
     if getattr(args, "stream", False):
         try:
diff --git a/src/codeforerunner/doctor.py b/src/codeforerunner/doctor.py
index 16138cd..a63aeb6 100644
--- a/src/codeforerunner/doctor.py
+++ b/src/codeforerunner/doctor.py
@@ -225,13 +225,23 @@ def _check_config_loadable(repo: Path) -> list[Finding]:
 
 
 def _check_provider_api_key(repo: Path) -> list[Finding]:
+    from codeforerunner.providers.ollama import is_available as _ollama_available
+
     cfg_path = repo / CONFIG_FILENAME
     if not cfg_path.is_file():
+        if _ollama_available():
+            return [
+                Finding(
+                    "ok",
+                    "provider-api-key",
+                    "no config; Ollama running — generate will use local mode automatically",
+                )
+            ]
         return [
             Finding(
                 "ok",
                 "provider-api-key",
-                f"no {CONFIG_FILENAME}; provider key not checked",
+                f"no {CONFIG_FILENAME}; set an API key in config or start Ollama for keyless local generation",
             )
         ]
     try:
@@ -259,7 +269,7 @@ def _check_provider_api_key(repo: Path) -> list[Finding]:
             Finding(
                 "ok",
                 "provider-api-key",
-                "ollama needs no API key (OLLAMA_HOST optional)",
+                "running in local mode (Ollama; no API key needed)",
             )
         ]
     env_var = cfg.api_key_env.get(provider) or _DEFAULT_PROVIDER_ENV.get(provider, "")
diff --git a/src/codeforerunner/providers/__init__.py b/src/codeforerunner/providers/__init__.py
index 60d68f2..0c71abf 100644
--- a/src/codeforerunner/providers/__init__.py
+++ b/src/codeforerunner/providers/__init__.py
@@ -5,7 +5,7 @@
 from codeforerunner.providers.anthropic import AnthropicProvider
 from codeforerunner.providers.base import CompletionResult, Provider, ProviderError
 from codeforerunner.providers.google import GoogleProvider
-from codeforerunner.providers.ollama import OllamaProvider
+from codeforerunner.providers.ollama import OllamaProvider, is_available as ollama_available
 from codeforerunner.providers.openai import OpenAIProvider
 
 __all__ = [
@@ -18,6 +18,7 @@
     "ProviderError",
     "REGISTRY",
     "get",
+    "ollama_available",
 ]
 
 REGISTRY: dict[str, type] = {
diff --git a/src/codeforerunner/providers/ollama.py b/src/codeforerunner/providers/ollama.py
index f51657e..1daab44 100644
--- a/src/codeforerunner/providers/ollama.py
+++ b/src/codeforerunner/providers/ollama.py
@@ -13,6 +13,16 @@
 DEFAULT_HOST = "http://localhost:11434"
 
 
+def is_available(host: str | None = None) -> bool:
+    """Return True if an Ollama instance is reachable at the configured host."""
+    base = (host or os.environ.get("OLLAMA_HOST") or DEFAULT_HOST).rstrip("/")
+    try:
+        urllib.request.urlopen(f"{base}/api/tags", timeout=2)
+        return True
+    except Exception:
+        return False
+
+
 class OllamaProvider:
     name = "ollama"
     default_env_var = "OLLAMA_HOST"
diff --git a/tests/test_cli.py b/tests/test_cli.py
index 1793efe..ddea49e 100644
--- a/tests/test_cli.py
+++ b/tests/test_cli.py
@@ -307,3 +307,133 @@ def complete(self, *, prompt, model=None, api_key=None):
     assert rc == 0
     assert cap.out == "ok\n"
     assert calls == [{"model": "claude-opus-4-7", "api_key": "override-secret"}]
+
+
+# ── Ollama local-mode fallback ─────────────────────────────────────────────────
+
+def test_generate_falls_back_to_ollama_when_no_key_and_ollama_running(
+    tmp_path, capsys, monkeypatch
+):
+    """No explicit provider, no API key, Ollama reachable → auto-switch to Ollama."""
+    _seed_repo_with_config(tmp_path)
+    (tmp_path / "forerunner.config.yaml").unlink()
+    calls: list[dict] = []
+
+    class FakeOllamaProvider:
+        default_env_var = "OLLAMA_HOST"
+        default_model = "llama3"
+
+        def complete(self, *, prompt, model=None, api_key=None):
+            calls.append({"model": model, "api_key": api_key})
+            return CompletionResult(text="ollama output", model=model or "llama3")
+
+    from codeforerunner import providers
+    from unittest.mock import patch
+
+    monkeypatch.setitem(providers.REGISTRY, "ollama", FakeOllamaProvider)
+    monkeypatch.delenv("ANTHROPIC_API_KEY", raising=False)
+
+    with patch("codeforerunner.providers.ollama_available", return_value=True):
+        rc = main(["--repo", str(tmp_path), "generate", "readme"])
+
+    cap = capsys.readouterr()
+    assert rc == 0
+    assert "local mode" in cap.err
+    assert cap.out == "ollama output\n"
+    assert calls[0]["model"] == "llama3"
+
+
+def test_generate_no_fallback_when_provider_explicit_and_key_missing(
+    tmp_path, capsys, monkeypatch
+):
+    """Explicit --provider means no auto-fallback even if Ollama is running."""
+    _seed_repo_with_config(tmp_path)
+    (tmp_path / "forerunner.config.yaml").unlink()
+
+    class FakeProvider:
+        default_env_var = "FAKE_API_KEY"
+        default_model = "fake-default"
+
+        def complete(self, *, prompt, model=None, api_key=None):  # pragma: no cover
+            raise AssertionError("should not be called")
+
+    from codeforerunner import providers
+    from unittest.mock import patch
+
+    monkeypatch.setitem(providers.REGISTRY, "fake", FakeProvider)
+    monkeypatch.delenv("FAKE_API_KEY", raising=False)
+
+    with patch("codeforerunner.providers.ollama_available", return_value=True):
+        rc = main(["--repo", str(tmp_path), "generate", "readme", "--provider", "fake"])
+
+    cap = capsys.readouterr()
+    assert rc == 3
+    assert "missing API key" in cap.err
+
+
+def test_generate_no_fallback_when_config_provider_set_and_key_missing(
+    tmp_path, capsys, monkeypatch
+):
+    """Provider in config file counts as explicit — no auto-fallback."""
+    _seed_repo_with_config(tmp_path)
+    (tmp_path / "forerunner.config.yaml").write_text(
+        "provider: anthropic\n", encoding="utf-8"
+    )
+
+    from unittest.mock import patch
+
+    monkeypatch.delenv("ANTHROPIC_API_KEY", raising=False)
+
+    with patch("codeforerunner.providers.ollama_available", return_value=True):
+        rc = main(["--repo", str(tmp_path), "generate", "readme"])
+
+    cap = capsys.readouterr()
+    assert rc == 3
+    assert "missing API key" in cap.err
+
+
+def test_generate_missing_key_includes_ollama_hint_when_ollama_absent(
+    tmp_path, capsys, monkeypatch
+):
+    """No explicit provider, no API key, Ollama not running → error + Ollama hint."""
+    _seed_repo_with_config(tmp_path)
+    (tmp_path / "forerunner.config.yaml").unlink()
+
+    from unittest.mock import patch
+
+    monkeypatch.delenv("ANTHROPIC_API_KEY", raising=False)
+
+    with patch("codeforerunner.providers.ollama_available", return_value=False):
+        rc = main(["--repo", str(tmp_path), "generate", "readme"])
+
+    cap = capsys.readouterr()
+    assert rc == 3
+    assert "missing API key" in cap.err
+    assert "Ollama" in cap.err
+
+
+def test_generate_ollama_fallback_uses_explicit_model(tmp_path, capsys, monkeypatch):
+    """--model flag is preserved when falling back to Ollama."""
+    _seed_repo_with_config(tmp_path)
+    (tmp_path / "forerunner.config.yaml").unlink()
+    calls: list[dict] = []
+
+    class FakeOllamaProvider:
+        default_env_var = "OLLAMA_HOST"
+        default_model = "llama3"
+
+        def complete(self, *, prompt, model=None, api_key=None):
+            calls.append({"model": model})
+            return CompletionResult(text="ok", model=model or "llama3")
+
+    from codeforerunner import providers
+    from unittest.mock import patch
+
+    monkeypatch.setitem(providers.REGISTRY, "ollama", FakeOllamaProvider)
+    monkeypatch.delenv("ANTHROPIC_API_KEY", raising=False)
+
+    with patch("codeforerunner.providers.ollama_available", return_value=True):
+        rc = main(["--repo", str(tmp_path), "generate", "readme", "--model", "llama3.2"])
+
+    assert rc == 0
+    assert calls[0]["model"] == "llama3.2"
diff --git a/tests/test_doctor.py b/tests/test_doctor.py
index 1f577e6..71d2bde 100644
--- a/tests/test_doctor.py
+++ b/tests/test_doctor.py
@@ -174,3 +174,42 @@ def test_doctor_fix_does_not_overwrite_existing_config(tmp_path: Path, capsys):
     capsys.readouterr()
 
     assert cfg_path.read_text(encoding="utf-8") == "# my custom config\n"
+
+
+# ── local-mode surfacing ───────────────────────────────────────────────────────
+
+def test_provider_api_key_local_mode_when_ollama_running_no_config(tmp_path: Path):
+    from unittest.mock import patch
+    repo = _copy_repo_layout(tmp_path)
+    # no forerunner.config.yaml
+    with patch("codeforerunner.providers.ollama.is_available", return_value=True):
+        findings = run(repo)
+    matches = [f for f in findings if f.check == "provider-api-key"]
+    assert len(matches) == 1
+    assert matches[0].severity == "ok"
+    assert "local mode" in matches[0].message
+
+
+def test_provider_api_key_hint_when_ollama_absent_no_config(tmp_path: Path):
+    from unittest.mock import patch
+    repo = _copy_repo_layout(tmp_path)
+    # no forerunner.config.yaml
+    with patch("codeforerunner.providers.ollama.is_available", return_value=False):
+        findings = run(repo)
+    matches = [f for f in findings if f.check == "provider-api-key"]
+    assert len(matches) == 1
+    assert matches[0].severity == "ok"
+    assert "Ollama" in matches[0].message
+
+
+def test_provider_api_key_ollama_config_shows_local_mode(tmp_path: Path, monkeypatch):
+    repo = _copy_repo_layout(tmp_path)
+    (repo / "forerunner.config.yaml").write_text(
+        "provider: ollama\nmodel: llama3\n", encoding="utf-8"
+    )
+    monkeypatch.delenv("OLLAMA_HOST", raising=False)
+    findings = run(repo)
+    matches = [f for f in findings if f.check == "provider-api-key"]
+    assert len(matches) == 1
+    assert matches[0].severity == "ok"
+    assert "local mode" in matches[0].message
diff --git a/tests/test_providers.py b/tests/test_providers.py
index 618e081..011a2d1 100644
--- a/tests/test_providers.py
+++ b/tests/test_providers.py
@@ -479,3 +479,52 @@ def test_ollama_stream_http_error_raises():
     with patch("urllib.request.urlopen", side_effect=_stream_http_error(500)):
         with pytest.raises(ProviderError, match="HTTP 500"):
             list(OllamaProvider().stream(prompt="hi"))
+
+
+# ── OllamaProvider.is_available ───────────────────────────────────────────────
+
+def test_ollama_is_available_returns_true_when_reachable(monkeypatch):
+    monkeypatch.delenv("OLLAMA_HOST", raising=False)
+    with patch("urllib.request.urlopen", return_value=MagicMock()):
+        from codeforerunner.providers.ollama import is_available
+        assert is_available() is True
+
+
+def test_ollama_is_available_returns_false_on_connection_error(monkeypatch):
+    import urllib.error
+    monkeypatch.delenv("OLLAMA_HOST", raising=False)
+    with patch("urllib.request.urlopen", side_effect=OSError("connection refused")):
+        from codeforerunner.providers.ollama import is_available
+        assert is_available() is False
+
+
+def test_ollama_is_available_uses_env_host(monkeypatch):
+    monkeypatch.setenv("OLLAMA_HOST", "http://myhost:11434")
+    captured_url: list[str] = []
+
+    def fake_open(url, timeout=None):
+        captured_url.append(url)
+        return MagicMock()
+
+    with patch("urllib.request.urlopen", side_effect=fake_open):
+        from codeforerunner.providers.ollama import is_available
+        assert is_available() is True
+    assert captured_url[0].startswith("http://myhost:11434")
+
+
+def test_ollama_is_available_uses_explicit_host():
+    captured_url: list[str] = []
+
+    def fake_open(url, timeout=None):
+        captured_url.append(url)
+        return MagicMock()
+
+    with patch("urllib.request.urlopen", side_effect=fake_open):
+        from codeforerunner.providers.ollama import is_available
+        assert is_available(host="http://custom:9999") is True
+    assert captured_url[0].startswith("http://custom:9999")
+
+
+def test_ollama_available_exported_from_providers_package():
+    from codeforerunner.providers import ollama_available
+    assert callable(ollama_available)