diff --git a/docs/cli-reference.md b/docs/cli-reference.md
index 7019c2a242..0a84e66cd4 100644
--- a/docs/cli-reference.md
+++ b/docs/cli-reference.md
@@ -449,7 +449,13 @@ fn daemon [--port <port>] [--host <host>] [--token <token>] [--paused] [--intera
 
 ## `fn desktop`
 
-Launch the Fusion desktop app (Electron).
+<!--
+FNXC:DesktopCLI 2026-06-21-12:00:
+`fn desktop` now starts the same local AI engine lifecycle as CLI dashboard mode by default.
+Document `--paused` as automation-paused startup and explicitly note that desktop does not expose a `--no-engine` mode so users do not infer dashboard-only flags exist here.
+-->
+
+Launch the Fusion desktop app (Electron) with a local AI engine running by default, mirroring `fn dashboard` engine-on startup.
 
 ```bash
 fn desktop
@@ -461,9 +467,11 @@ fn desktop --interactive
 | Option | Description |
 |---|---|
 | `--dev` | Launch with hot-reload (connects to Vite dev server). |
-| `--paused` | Launch with automation paused. |
+| `--paused` | Launch with the AI engine paused (automation disabled). |
 | `--interactive` | Interactive port selection. |
 
+`fn desktop` does not support `--no-engine`. Unlike `fn dashboard`, which can run in dashboard/API-only mode, desktop always starts the local AI engine; use `--paused` when you want the engine process running without automation doing work.
+
 ---
 
 ## `fn task`
diff --git a/packages/desktop/README.md b/packages/desktop/README.md
index 661364fc9e..5956f23806 100644
--- a/packages/desktop/README.md
+++ b/packages/desktop/README.md
@@ -25,16 +25,22 @@ By default it uses `http://localhost:5173`. Override with `FUSION_DASHBOARD_URL`
 
 ### Production-style desktop launch (from CLI)
 
+<!--
+FNXC:DesktopCLI 2026-06-21-12:00:
+Desktop CLI launch shares the local dashboard runtime path, so the docs must state that `fn desktop` starts the embedded dashboard server and the local AI engine by default.
+`--paused` keeps the engine process running but disables automation, and desktop must not imply a dashboard-only no-engine mode exists.
+-->
+
 ```bash
 fn desktop
 ```
 
-`fn desktop` builds desktop artifacts, starts an embedded dashboard server on an ephemeral port, and launches Electron with embedded renderer assets.
+`fn desktop` builds desktop artifacts, starts an embedded dashboard server plus the local AI engine on an ephemeral port, and launches Electron with embedded renderer assets.
 
 Useful flags:
 
 - `fn desktop --dev` — use dev renderer URL (`FUSION_DASHBOARD_URL` or `http://localhost:5173`)
-- `fn desktop --paused` — start with engine paused
+- `fn desktop --paused` — start with the AI engine paused (automation disabled)
 
 ## Renderer Architecture
 
@@ -431,8 +437,9 @@ The Windows desktop workflow (`.github/workflows/desktop-windows.yml`) supports
 
 ### CLI Launch (`fn desktop`)
 1. Build desktop artifacts (unless `--dev`)
-2. Start embedded API server on ephemeral port
-3. Launch Electron:
+2. Start the embedded API server and local AI engine on an ephemeral port
+3. If `--paused` is set, keep the AI engine in an automation-paused state during startup
+4. Launch Electron:
    - **Production:** Uses embedded renderer assets, `getServerPort()` for API connection
    - **Development (`--dev`):** Uses `FUSION_DASHBOARD_URL` for live reload