diff --git a/src/composables/useNostrChat.ts b/src/composables/useNostrChat.ts
index 718fe9a..c8674e5 100644
--- a/src/composables/useNostrChat.ts
+++ b/src/composables/useNostrChat.ts
@@ -24,6 +24,7 @@ export interface NostrRelayConfig {
 interface UnreadMessageData {
   lastReadTimestamp: number
   unreadCount: number
+  processedMessageIds: Set<string> // Track which messages we've already counted as unread
 }
 
 const UNREAD_MESSAGES_KEY = 'nostr-chat-unread-messages'
@@ -32,17 +33,30 @@ const UNREAD_MESSAGES_KEY = 'nostr-chat-unread-messages'
 const getUnreadData = (peerPubkey: string): UnreadMessageData => {
   try {
     const stored = localStorage.getItem(`${UNREAD_MESSAGES_KEY}-${peerPubkey}`)
-    return stored ? JSON.parse(stored) : { lastReadTimestamp: 0, unreadCount: 0 }
+    if (stored) {
+      const data = JSON.parse(stored)
+      // Convert the array back to a Set for processedMessageIds
+      return {
+        ...data,
+        processedMessageIds: new Set(data.processedMessageIds || [])
+      }
+    }
+    return { lastReadTimestamp: 0, unreadCount: 0, processedMessageIds: new Set() }
   } catch (error) {
     console.warn('Failed to load unread data for peer:', peerPubkey, error)
-    return { lastReadTimestamp: 0, unreadCount: 0 }
+    return { lastReadTimestamp: 0, unreadCount: 0, processedMessageIds: new Set() }
   }
 }
 
 // Save unread message data for a peer
 const saveUnreadData = (peerPubkey: string, data: UnreadMessageData): void => {
   try {
-    localStorage.setItem(`${UNREAD_MESSAGES_KEY}-${peerPubkey}`, JSON.stringify(data))
+    // Convert Set to array for localStorage serialization
+    const serializableData = {
+      ...data,
+      processedMessageIds: Array.from(data.processedMessageIds)
+    }
+    localStorage.setItem(`${UNREAD_MESSAGES_KEY}-${peerPubkey}`, JSON.stringify(serializableData))
   } catch (error) {
     console.warn('Failed to save unread data for peer:', peerPubkey, error)
   }
@@ -99,10 +113,11 @@ export function useNostrChat() {
     const currentTimestamp = Math.floor(Date.now() / 1000)
     const unreadData = getUnreadData(peerPubkey)
     
-    // Update last read timestamp and reset unread count
+    // Update last read timestamp, reset unread count, and clear processed message IDs
     const updatedData: UnreadMessageData = {
       lastReadTimestamp: currentTimestamp,
-      unreadCount: 0
+      unreadCount: 0,
+      processedMessageIds: new Set() // Clear processed messages when marking as read
     }
     
     saveUnreadData(peerPubkey, updatedData)
@@ -116,9 +131,17 @@ export function useNostrChat() {
         key.startsWith(`${UNREAD_MESSAGES_KEY}-`)
       )
       
+      console.log('Loading unread counts from localStorage. Found keys:', keys)
+      
       for (const key of keys) {
         const peerPubkey = key.replace(`${UNREAD_MESSAGES_KEY}-`, '')
         const unreadData = getUnreadData(peerPubkey)
+        console.log(`Peer ${peerPubkey}:`, {
+          lastReadTimestamp: unreadData.lastReadTimestamp,
+          unreadCount: unreadData.unreadCount,
+          processedMessageIdsCount: unreadData.processedMessageIds.size
+        })
+        
         if (unreadData.unreadCount > 0) {
           unreadCounts.value.set(peerPubkey, unreadData.unreadCount)
         }
@@ -150,6 +173,36 @@ export function useNostrChat() {
     }
   }
 
+  // Clear processed message IDs for a specific peer (useful for debugging)
+  const clearProcessedMessageIds = (peerPubkey: string): void => {
+    try {
+      const unreadData = getUnreadData(peerPubkey)
+      const updatedData: UnreadMessageData = {
+        ...unreadData,
+        processedMessageIds: new Set()
+      }
+      saveUnreadData(peerPubkey, updatedData)
+      console.log(`Cleared processed message IDs for peer: ${peerPubkey}`)
+    } catch (error) {
+      console.warn('Failed to clear processed message IDs for peer:', peerPubkey, error)
+    }
+  }
+
+  // Debug function to show current state of unread data for a peer
+  const debugUnreadData = (peerPubkey: string): void => {
+    try {
+      const unreadData = getUnreadData(peerPubkey)
+      console.log(`Debug unread data for ${peerPubkey}:`, {
+        lastReadTimestamp: unreadData.lastReadTimestamp,
+        unreadCount: unreadData.unreadCount,
+        processedMessageIds: Array.from(unreadData.processedMessageIds),
+        processedMessageIdsCount: unreadData.processedMessageIds.size
+      })
+    } catch (error) {
+      console.warn('Failed to debug unread data for peer:', peerPubkey, error)
+    }
+  }
+
   // Get relays from config - requires VITE_NOSTR_RELAYS to be set
   const getRelays = (): NostrRelayConfig[] => {
     const configuredRelays = config.nostr.relays
@@ -536,22 +589,37 @@ export function useNostrChat() {
       if (!isSentByMe) {
         const unreadData = getUnreadData(peerPubkey)
         
-        // Check if this message is newer than the last read timestamp
-        if (message.created_at > unreadData.lastReadTimestamp) {
+        console.log(`Processing unread message logic for ${peerPubkey}:`, {
+          messageId: event.id,
+          messageTimestamp: message.created_at,
+          lastReadTimestamp: unreadData.lastReadTimestamp,
+          currentUnreadCount: unreadData.unreadCount,
+          alreadyProcessed: unreadData.processedMessageIds.has(event.id),
+          processedMessageIdsCount: unreadData.processedMessageIds.size
+        })
+        
+        // Check if this message is newer than the last read timestamp AND we haven't already counted it
+        if (message.created_at > unreadData.lastReadTimestamp && !unreadData.processedMessageIds.has(event.id)) {
+          // Add this message ID to the processed set
+          unreadData.processedMessageIds.add(event.id)
+          
           const updatedUnreadData: UnreadMessageData = {
             lastReadTimestamp: unreadData.lastReadTimestamp,
-            unreadCount: unreadData.unreadCount + 1
+            unreadCount: unreadData.unreadCount + 1,
+            processedMessageIds: unreadData.processedMessageIds
           }
           
           saveUnreadData(peerPubkey, updatedUnreadData)
           updateUnreadCount(peerPubkey, updatedUnreadData.unreadCount)
           
-          console.log(`New unread message from ${peerPubkey}. Total unread: ${updatedUnreadData.unreadCount}`)
+          console.log(`✅ New unread message from ${peerPubkey}. Total unread: ${updatedUnreadData.unreadCount}`)
+        } else if (unreadData.processedMessageIds.has(event.id)) {
+          console.log(`⏭️ Message ${event.id} from ${peerPubkey} already counted as unread. Skipping.`)
         } else {
-          console.log(`Message from ${peerPubkey} is older than last read timestamp. Skipping unread count.`)
+          console.log(`⏰ Message from ${peerPubkey} is older than last read timestamp. Skipping unread count.`)
         }
       } else {
-        console.log(`Message from ${peerPubkey} was sent by current user. Skipping unread count.`)
+        console.log(`📤 Message from ${peerPubkey} was sent by current user. Skipping unread count.`)
       }
       
       // Trigger callback if set
@@ -723,6 +791,8 @@ export function useNostrChat() {
     getUnreadCount,
     getAllUnreadCounts,
     getTotalUnreadCount,
-    clearAllUnreadCounts
+    clearAllUnreadCounts,
+    clearProcessedMessageIds,
+    debugUnreadData
   }
 } 
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