diff --git a/src/popup/App.tsx b/src/popup/App.tsx
index d856a82..8684936 100644
--- a/src/popup/App.tsx
+++ b/src/popup/App.tsx
@@ -1,4 +1,4 @@
-import React, { useEffect, useState } from 'react';
+import React, { useEffect, useRef, useState } from 'react';
 import { Box } from '@chakra-ui/react';
 import browser from 'webextension-polyfill';
 import { useWalletStore } from '@/store/walletStore';
@@ -53,6 +53,7 @@ const App: React.FC = () => {
   const [isReady, setIsReady] = useState(false);
   const [minTimeElapsed, setMinTimeElapsed] = useState(false);
   const [approvalId, setApprovalId] = useState<string | null>(null);
+  const resetToImport = useRef(false);
   const { isInitialized, isLocked, initialize } = useWalletStore();
 
   // Minimum display time for smooth loading animation
@@ -104,7 +105,7 @@ const App: React.FC = () => {
     if (approvalId) return;
 
     if (!isInitialized) {
-      setView('create');
+      setView(resetToImport.current ? 'import' : 'create');
     } else if (isLocked) {
       setView('unlock');
     } else {
@@ -124,6 +125,11 @@ const App: React.FC = () => {
     setView('dashboard');
   };
 
+  const handleWalletReset = () => {
+    resetToImport.current = true;
+    setView('import');
+  };
+
   const switchToImport = () => {
     setView('import');
   };
@@ -202,7 +208,9 @@ const App: React.FC = () => {
       {view === 'import' && (
         <ImportWallet onSuccess={handleImportSuccess} onSwitchToCreate={switchToCreate} />
       )}
-      {view === 'unlock' && <Unlock onSuccess={handleUnlockSuccess} />}
+      {view === 'unlock' && (
+        <Unlock onSuccess={handleUnlockSuccess} onReset={handleWalletReset} />
+      )}
       {view === 'dashboard' && (
         <Dashboard
           onNavigateToStaking={navigateToStaking}
diff --git a/src/popup/pages/Unlock.tsx b/src/popup/pages/Unlock.tsx
index 358b8b8..bb729fe 100644
--- a/src/popup/pages/Unlock.tsx
+++ b/src/popup/pages/Unlock.tsx
@@ -1,5 +1,11 @@
-import React, { useState } from 'react';
+import React, { useRef, useState } from 'react';
 import {
+  AlertDialog,
+  AlertDialogBody,
+  AlertDialogContent,
+  AlertDialogFooter,
+  AlertDialogHeader,
+  AlertDialogOverlay,
   Box,
   Button,
   Input,
@@ -15,14 +21,18 @@ import { useWalletStore } from '@/store/walletStore';
 
 interface Props {
   onSuccess: () => void;
+  onReset: () => void;
 }
 
-const Unlock: React.FC<Props> = ({ onSuccess }) => {
+const Unlock: React.FC<Props> = ({ onSuccess, onReset }) => {
   const [password, setPassword] = useState('');
   const [showPassword, setShowPassword] = useState(false);
   const [loading, setLoading] = useState(false);
+  const [resetOpen, setResetOpen] = useState(false);
+  const [resetting, setResetting] = useState(false);
+  const cancelRef = useRef<HTMLButtonElement>(null);
 
-  const { unlock } = useWalletStore();
+  const { unlock, resetWallet } = useWalletStore();
   const toast = useToast();
 
   const handleUnlock = async (e: React.FormEvent) => {
@@ -58,6 +68,24 @@ const Unlock: React.FC<Props> = ({ onSuccess }) => {
     }
   };
 
+  const handleReset = async () => {
+    setResetting(true);
+    try {
+      await resetWallet();
+      setResetOpen(false);
+      onReset();
+    } catch (error) {
+      toast({
+        title: 'Could not reset wallet',
+        description: error instanceof Error ? error.message : 'Unknown error',
+        status: 'error',
+        duration: 4000,
+      });
+    } finally {
+      setResetting(false);
+    }
+  };
+
   return (
     <Box h="full" bg="#0a0a0a" display="flex" alignItems="center" justifyContent="center" p={6}>
       <VStack spacing={8} align="stretch" w="full" maxW="320px">
@@ -127,8 +155,61 @@ const Unlock: React.FC<Props> = ({ onSuccess }) => {
             >
               Unlock
             </Button>
+
+            <Button
+              type="button"
+              variant="ghost"
+              color="gray.500"
+              _hover={{ color: 'white' }}
+              size="sm"
+              onClick={() => setResetOpen(true)}
+            >
+              Forgot password?
+            </Button>
           </VStack>
         </form>
+
+        <AlertDialog
+          isOpen={resetOpen}
+          leastDestructiveRef={cancelRef}
+          onClose={() => setResetOpen(false)}
+          isCentered
+        >
+          <AlertDialogOverlay>
+            <AlertDialogContent bg="#141414" color="white" mx={4}>
+              <AlertDialogHeader fontSize="lg" fontWeight="semibold">
+                Reset this wallet?
+              </AlertDialogHeader>
+              <AlertDialogBody>
+                <Text color="gray.300" fontSize="sm">
+                  This removes the wallet saved in this browser. Your coins stay on the chain. You
+                  need your recovery phrase to import it and choose a new password. Without that
+                  phrase, this copy cannot be restored.
+                </Text>
+              </AlertDialogBody>
+              <AlertDialogFooter>
+                <Button
+                  ref={cancelRef}
+                  variant="ghost"
+                  onClick={() => setResetOpen(false)}
+                  isDisabled={resetting}
+                >
+                  Cancel
+                </Button>
+                <Button
+                  bg="red.500"
+                  color="white"
+                  _hover={{ bg: 'red.600' }}
+                  ml={3}
+                  onClick={handleReset}
+                  isLoading={resetting}
+                >
+                  Reset wallet
+                </Button>
+              </AlertDialogFooter>
+            </AlertDialogContent>
+          </AlertDialogOverlay>
+        </AlertDialog>
       </VStack>
     </Box>
   );
diff --git a/src/store/walletStore.ts b/src/store/walletStore.ts
index 645800f..118c2e7 100644
--- a/src/store/walletStore.ts
+++ b/src/store/walletStore.ts
@@ -141,6 +141,7 @@ interface WalletState {
   importWallet: (mnemonic: string, password: string, accountName?: string) => Promise<void>;
   unlock: (password: string) => Promise<void>;
   lock: () => Promise<void>;
+  resetWallet: () => Promise<void>;
   selectAccount: (accountId: string) => void;
   selectChain: (chainId: string) => void;
   setAutoLockMinutes: (minutes: number) => Promise<void>;
@@ -518,6 +519,26 @@ export const useWalletStore = create<WalletState>((set, get) => ({
     });
   },
 
+  resetWallet: async () => {
+    const { keyring } = get();
+
+    if (keyring) {
+      keyring.clear();
+    }
+
+    await EncryptedStorage.deleteWallet();
+    await lockBackground();
+
+    set({
+      isInitialized: false,
+      isLocked: false,
+      accounts: [],
+      selectedAccount: null,
+      keyring: null,
+      connectedDapps: new Map(),
+    });
+  },
+
   selectAccount: (accountId: string) => {
     const { accounts } = get();
     // Find by ID only - no fallback to address
diff --git a/tests/popup/Unlock.test.tsx b/tests/popup/Unlock.test.tsx
new file mode 100644
index 0000000..48c492d
--- /dev/null
+++ b/tests/popup/Unlock.test.tsx
@@ -0,0 +1,65 @@
+import React from 'react';
+import { fireEvent, render, screen, waitFor } from '@testing-library/react';
+import { ChakraProvider } from '@chakra-ui/react';
+import Unlock from '@/popup/pages/Unlock';
+
+const unlock = jest.fn();
+const resetWallet = jest.fn();
+
+jest.mock('@/store/walletStore', () => ({
+  useWalletStore: () => ({
+    unlock,
+    resetWallet,
+  }),
+}));
+
+function renderUnlock(onReset = jest.fn()) {
+  return {
+    onReset,
+    ...render(
+      <ChakraProvider>
+        <Unlock onSuccess={jest.fn()} onReset={onReset} />
+      </ChakraProvider>
+    ),
+  };
+}
+
+describe('Unlock reset', () => {
+  beforeEach(() => {
+    unlock.mockReset();
+    resetWallet.mockReset();
+  });
+
+  it('asks before removing the saved wallet', () => {
+    renderUnlock();
+
+    fireEvent.click(screen.getByRole('button', { name: 'Forgot password?' }));
+
+    expect(screen.getByRole('alertdialog')).toHaveTextContent('Reset this wallet?');
+    expect(screen.getByRole('alertdialog')).toHaveTextContent('recovery phrase');
+    expect(resetWallet).not.toHaveBeenCalled();
+  });
+
+  it('leaves the wallet in place when reset is cancelled', () => {
+    renderUnlock();
+
+    fireEvent.click(screen.getByRole('button', { name: 'Forgot password?' }));
+    fireEvent.click(screen.getByRole('button', { name: 'Cancel' }));
+
+    expect(resetWallet).not.toHaveBeenCalled();
+    expect(screen.getByRole('alertdialog')).toHaveStyle({ opacity: '0' });
+  });
+
+  it('removes the saved wallet and continues to import', async () => {
+    resetWallet.mockResolvedValue(undefined);
+    const { onReset } = renderUnlock();
+
+    fireEvent.click(screen.getByRole('button', { name: 'Forgot password?' }));
+    fireEvent.click(screen.getByRole('button', { name: 'Reset wallet' }));
+
+    await waitFor(() => {
+      expect(resetWallet).toHaveBeenCalledTimes(1);
+      expect(onReset).toHaveBeenCalledTimes(1);
+    });
+  });
+});