diff --git a/capiscio_sdk/simple_guard.py b/capiscio_sdk/simple_guard.py
index b28bb44..386faab 100644
--- a/capiscio_sdk/simple_guard.py
+++ b/capiscio_sdk/simple_guard.py
@@ -300,6 +300,8 @@ def _load_or_generate_keys(self) -> None:
             else:
                 raise ConfigurationError(f"capiscio_keys directory not found at {self.keys_dir}")
 
+        did_key_path = self.keys_dir / "did_key.txt"
+
         if private_key_path.exists():
             # Load existing key via gRPC
             key_info, error = self._client.simpleguard.load_key(str(private_key_path))
@@ -308,6 +310,11 @@ def _load_or_generate_keys(self) -> None:
             # Update signing kid to match the loaded key
             self.signing_kid = key_info["key_id"]
             logger.info(f"Loaded key: {self.signing_kid}")
+
+            # Recover did:key identity from sidecar file if in dev mode
+            if self.dev_mode and not self._explicit_agent_id and did_key_path.exists():
+                self.agent_id = did_key_path.read_text().strip()
+                logger.info(f"Dev Mode: Recovered did:key identity: {self.agent_id}")
         elif self.dev_mode:
             logger.info("Dev Mode: Generating Ed25519 keypair via gRPC")
             
@@ -323,6 +330,8 @@ def _load_or_generate_keys(self) -> None:
             if did_key and not self._explicit_agent_id:
                 self.agent_id = did_key
                 logger.info(f"Dev Mode: Using did:key identity: {self.agent_id}")
+                # Persist did:key for recovery on subsequent loads
+                did_key_path.write_text(did_key)
             
             # Save private key
             with open(private_key_path, "w") as f:
diff --git a/tests/unit/test_simple_guard.py b/tests/unit/test_simple_guard.py
index c20477b..61e3fcf 100644
--- a/tests/unit/test_simple_guard.py
+++ b/tests/unit/test_simple_guard.py
@@ -121,6 +121,58 @@ def test_legacy_agent_card_with_deprecation_warning(self, temp_workspace, mock_r
         guard.close()
 
 
+class TestSimpleGuardDidKeyRecovery:
+    """Tests for dev mode did:key persistence and recovery."""
+
+    def test_dev_mode_persists_did_key_on_generate(self, temp_workspace, mock_rpc_client):
+        """Test that dev_mode persists did:key to sidecar file on first generation."""
+        mock_rpc_client.simpleguard.generate_key_pair.return_value = ({
+            "key_id": "test-key",
+            "did_key": "did:key:z6MkTestGeneratedKey",
+            "private_key_pem": "-----BEGIN PRIVATE KEY-----\ntest\n-----END PRIVATE KEY-----",
+            "public_key_pem": "-----BEGIN PUBLIC KEY-----\ntest\n-----END PUBLIC KEY-----",
+        }, None)
+
+        guard = SimpleGuard(dev_mode=True)
+
+        assert guard.agent_id == "did:key:z6MkTestGeneratedKey"
+        did_key_path = temp_workspace / "capiscio_keys" / "did_key.txt"
+        assert did_key_path.exists()
+        assert did_key_path.read_text() == "did:key:z6MkTestGeneratedKey"
+
+        guard.close()
+
+    def test_dev_mode_recovers_did_key_on_load(self, temp_workspace, mock_rpc_client):
+        """Test that dev_mode recovers did:key from sidecar file when key exists."""
+        keys_dir = temp_workspace / "capiscio_keys"
+        keys_dir.mkdir(parents=True)
+        (keys_dir / "trusted").mkdir()
+        (keys_dir / "private.pem").write_text("mock key")
+        (keys_dir / "public.pem").write_text("mock pub")
+        (keys_dir / "did_key.txt").write_text("did:key:z6MkRecoveredKey")
+
+        guard = SimpleGuard(dev_mode=True)
+
+        assert guard.agent_id == "did:key:z6MkRecoveredKey"
+        mock_rpc_client.simpleguard.generate_key_pair.assert_not_called()
+
+        guard.close()
+
+    def test_dev_mode_explicit_agent_id_ignores_sidecar(self, temp_workspace, mock_rpc_client):
+        """Test that explicit agent_id is not overridden by sidecar did_key.txt."""
+        keys_dir = temp_workspace / "capiscio_keys"
+        keys_dir.mkdir(parents=True)
+        (keys_dir / "trusted").mkdir()
+        (keys_dir / "private.pem").write_text("mock key")
+        (keys_dir / "did_key.txt").write_text("did:key:z6MkShouldBeIgnored")
+
+        guard = SimpleGuard(dev_mode=True, agent_id="did:web:example.com:myagent")
+
+        assert guard.agent_id == "did:web:example.com:myagent"
+
+        guard.close()
+
+
 class TestSimpleGuardSigning:
     """Tests for SimpleGuard signing operations."""