diff --git a/reflexio/README.md b/reflexio/README.md
index 95c423be3..139e6dd94 100644
--- a/reflexio/README.md
+++ b/reflexio/README.md
@@ -132,7 +132,7 @@ client (Python SDK)
 - **`api_endpoints/`**: Request handling, `RequestContext` (bundles storage/config/prompts), auth
 - **`routes/`**: Domain route modules (`system.py`, `interactions.py`, `profiles.py`, `playbooks.py`, `search.py`, `provenance.py`, `evaluation.py`, `braintrust.py`, `config.py`) included into `api.py`'s `core_router`
 - **`db/`**: Auth & config storage only (SQLite) - NOT for profiles/interactions
-- **`llm/`**: Unified LiteLLM client, provider adapters, local rerank helpers, structured-output repair, and fail-open per-provider concurrency caps
+- **`llm/`**: Unified LiteLLM client, provider adapters, local/internal embedding service routing, cross-encoder rerank service support, structured-output repair, and fail-open per-provider concurrency caps
 - **`prompt/`**: Versioned prompt templates in `prompt_bank/`
 - **`services/`**: Core business logic
   - `generation_service.py` - Orchestrator (runs profile/playbook/success services)
diff --git a/reflexio/server/README.md b/reflexio/server/README.md
index 808f7f0e6..754647814 100644
--- a/reflexio/server/README.md
+++ b/reflexio/server/README.md
@@ -118,7 +118,10 @@ Key files:
 - `litellm_client.py`: Stable import surface, client config/credential resolution, and `LiteLLMClient` facade
 - `_litellm_text_generation.py`, `_litellm_embedding.py`, `_litellm_structured_output.py`: Completion/tool-call, embedding, and structured-output mixins
 - `_litellm_json_extraction.py`, `_litellm_subprocess.py`, `_provider_concurrency.py`, `_litellm_types.py`: JSON parsing, hard-timeout subprocess snapshots/workers, per-provider fail-open concurrency caps, and shared public types/errors
-- `providers/`: Optional local/provider adapters (`claude-code/`, OpenClaw, local embedding, Nomic embedding); registration is opt-in via environment/config
+- `embedding_service.py`: OpenAI-compatible local/internal embedding daemon with `/v1/embeddings`, `/v1/rerank`, `/health`, micro-batching, and single-active-model warmup
+- `providers/embedding_service_provider.py`: Routing boundary for `REFLEXIO_EMBEDDING_PROVIDER` (`cloud`, `local_service`, `internal_service`, `inprocess`, `off`), service URL/timeouts, local daemon probing, and request splitting
+- `rerank/cross_encoder_reranker.py`: Cross-encoder rerank helper; uses in-process scoring by default or delegates to `REFLEXIO_RERANK_SERVICE_URL`
+- `providers/`: Optional local/provider adapters (`claude-code/`, OpenClaw, local embedding, Nomic embedding, embedding service); registration is opt-in via environment/config
 - `openai_client.py`: OpenAI implementation (legacy, do not use directly)
 - `claude_client.py`: Claude implementation (legacy, do not use directly)
 - `llm_utils.py`: Helper functions for Pydantic model conversion