diff --git a/hcie-iced-app/crates/hcie-iced-gui/src/app.rs b/hcie-iced-app/crates/hcie-iced-gui/src/app.rs
index 703926e..0a9630b 100644
--- a/hcie-iced-app/crates/hcie-iced-gui/src/app.rs
+++ b/hcie-iced-app/crates/hcie-iced-gui/src/app.rs
@@ -16,6 +16,7 @@ use crate::dialogs;
 use crate::dock::state::{DockState, PaneType};
 use crate::io::tablet::TabletState;
 use crate::panels;
+use crate::selection;
 use crate::selection::{CropState, SelectionTransform, TransformHandle};
 use crate::theme::ThemeState;
 use hcie_engine_api::{BlendMode, BrushTip, BrushStyle, Engine, FilterType, LayerStyle, Tool, ZOOM_MAX, ZOOM_MIN};
@@ -2126,6 +2127,18 @@ impl HcieIcedApp {
                 let doc = &self.documents[self.active_doc];
                 let w = doc.engine.canvas_width();
                 let h = doc.engine.canvas_height();
+
+                // Check if there's a selection
+                if let Some(ref mask) = doc.selection_mask {
+                    // Copy selected pixels only
+                    let pixels = doc.composite_raw.clone();
+                    if let Some(transform) = selection::clipboard::extract_masked_pixels(&pixels, mask, w, h) {
+                        self.documents[self.active_doc].internal_clipboard = Some(transform);
+                        return Task::perform(async {}, |_| Message::NoOp);
+                    }
+                }
+
+                // No selection - copy entire canvas
                 let pixels = doc.composite_raw.clone();
                 return Task::perform(
                     async move { crate::io::clipboard::copy_image_to_clipboard(&pixels, w, h) },
@@ -2133,6 +2146,17 @@ impl HcieIcedApp {
                 );
             }
             Message::PasteImage => {
+                let doc = &self.documents[self.active_doc];
+
+                // Check internal clipboard first
+                if let Some(ref transform) = doc.internal_clipboard {
+                    // Enter transform mode with the clipboard content
+                    self.documents[self.active_doc].selection_transform = Some(transform.clone());
+                    self.documents[self.active_doc].transform_drag_handle = TransformHandle::None;
+                    return Task::perform(async {}, |_| Message::CompositeRefresh);
+                }
+
+                // Fall back to system clipboard
                 return Task::perform(
                     async { crate::io::clipboard::paste_image_from_clipboard() },
                     Message::ImagePasted,
diff --git a/hcie-iced-app/crates/hcie-iced-gui/src/selection/clipboard.rs b/hcie-iced-app/crates/hcie-iced-gui/src/selection/clipboard.rs
new file mode 100644
index 0000000..e497250
--- /dev/null
+++ b/hcie-iced-app/crates/hcie-iced-gui/src/selection/clipboard.rs
@@ -0,0 +1,134 @@
+//! Selection-aware clipboard operations.
+//!
+//! Provides functions for extracting pixels within a selection mask
+//! and compositing floating pixels back onto a layer with alpha blending.
+
+use super::transform::SelectionTransform;
+
+/// Extract pixels from a layer using a selection mask.
+///
+/// # Arguments
+/// * `layer_pixels` - RGBA pixel data of the source layer (row-major, 4 bytes per pixel)
+/// * `mask` - Selection mask as alpha channel values (1 byte per pixel, same dimensions as layer)
+/// * `canvas_w` - Width of the canvas in pixels
+/// * `canvas_h` - Height of the canvas in pixels
+///
+/// # Returns
+/// `Some(SelectionTransform)` containing the extracted pixels and their position,
+/// or `None` if the mask is empty or dimensions are invalid.
+pub fn extract_masked_pixels(
+    layer_pixels: &[u8],
+    mask: &[u8],
+    canvas_w: u32,
+    canvas_h: u32,
+) -> Option<SelectionTransform> {
+    if mask.is_empty() || canvas_w == 0 || canvas_h == 0 {
+        return None;
+    }
+
+    // Find bounding box of non-zero mask pixels
+    let mut min_x = canvas_w;
+    let mut min_y = canvas_h;
+    let mut max_x = 0u32;
+    let mut max_y = 0u32;
+    let mut has_selection = false;
+
+    for y in 0..canvas_h {
+        for x in 0..canvas_w {
+            if mask[(y * canvas_w + x) as usize] > 0 {
+                min_x = min_x.min(x);
+                min_y = min_y.min(y);
+                max_x = max_x.max(x);
+                max_y = max_y.max(y);
+                has_selection = true;
+            }
+        }
+    }
+
+    if !has_selection {
+        return None;
+    }
+
+    let bw = max_x - min_x + 1;
+    let bh = max_y - min_y + 1;
+    let mut pixels = vec![0u8; (bw * bh * 4) as usize];
+
+    let layer_w = canvas_w as usize;
+
+    for y in 0..bh as usize {
+        for x in 0..bw as usize {
+            let src_x = min_x as usize + x;
+            let src_y = min_y as usize + y;
+            let mask_idx = src_y * canvas_w as usize + src_x;
+            if mask_idx < mask.len() && mask[mask_idx] > 0 {
+                let px_idx = (src_y * layer_w + src_x) * 4;
+                if px_idx + 3 < layer_pixels.len() {
+                    let dst_idx = (y * bw as usize + x) * 4;
+                    pixels[dst_idx] = layer_pixels[px_idx];
+                    pixels[dst_idx + 1] = layer_pixels[px_idx + 1];
+                    pixels[dst_idx + 2] = layer_pixels[px_idx + 2];
+                    pixels[dst_idx + 3] = layer_pixels[px_idx + 3];
+                }
+            }
+        }
+    }
+
+    Some(SelectionTransform {
+        pixels,
+        width: bw,
+        height: bh,
+        pos: iced::Vector::new(min_x as f32, min_y as f32),
+        size: iced::Vector::new(bw as f32, bh as f32),
+        rotation: 0.0,
+    })
+}
+
+/// Composite floating pixels back onto a layer.
+///
+/// Uses alpha blending to combine the floating pixels with the existing layer data.
+/// Pixels outside the canvas bounds are clipped.
+///
+/// # Arguments
+/// * `layer_pixels` - Mutable RGBA pixel data of the target layer (row-major, 4 bytes per pixel)
+/// * `floating` - The floating selection transform containing pixels to composite
+/// * `canvas_w` - Width of the canvas in pixels
+/// * `canvas_h` - Height of the canvas in pixels
+pub fn composite_floating_to_layer(
+    layer_pixels: &mut [u8],
+    floating: &SelectionTransform,
+    canvas_w: u32,
+    canvas_h: u32,
+) {
+    if floating.is_empty() {
+        return;
+    }
+
+    let x = floating.pos.x as i32;
+    let y = floating.pos.y as i32;
+    let w = floating.width as i32;
+    let h = floating.height as i32;
+
+    for fy in 0..h {
+        for fx in 0..w {
+            let dst_x = x + fx;
+            let dst_y = y + fy;
+
+            if dst_x < 0 || dst_y < 0 || dst_x >= canvas_w as i32 || dst_y >= canvas_h as i32 {
+                continue;
+            }
+
+            let src_idx = ((fy * w + fx) * 4) as usize;
+            let dst_idx = ((dst_y * canvas_w as i32 + dst_x) * 4) as usize;
+
+            if src_idx + 3 < floating.pixels.len() && dst_idx + 3 < layer_pixels.len() {
+                let src_a = floating.pixels[src_idx + 3] as f32 / 255.0;
+                let inv_a = 1.0 - src_a;
+
+                layer_pixels[dst_idx] = (floating.pixels[src_idx] as f32 * src_a + layer_pixels[dst_idx] as f32 * inv_a) as u8;
+                layer_pixels[dst_idx + 1] = (floating.pixels[src_idx + 1] as f32 * src_a + layer_pixels[dst_idx + 1] as f32 * inv_a) as u8;
+                layer_pixels[dst_idx + 2] = (floating.pixels[src_idx + 2] as f32 * src_a + layer_pixels[dst_idx + 2] as f32 * inv_a) as u8;
+                layer_pixels[dst_idx + 3] = ((src_a * 255.0 + layer_pixels[dst_idx + 3] as f32 * inv_a).min(255.0)) as u8;
+            }
+        }
+    }
+}
diff --git a/hcie-iced-app/crates/hcie-iced-gui/src/selection/mod.rs b/hcie-iced-app/crates/hcie-iced-gui/src/selection/mod.rs
index ee4392c..2f99449 100644
--- a/hcie-iced-app/crates/hcie-iced-gui/src/selection/mod.rs
+++ b/hcie-iced-app/crates/hcie-iced-gui/src/selection/mod.rs
@@ -3,6 +3,7 @@
 //! Contains types for managing floating pixel selections (cut/copy-paste),
 //! transform handles, and the crop tool.
 
+pub mod clipboard;
 pub mod crop;
 pub mod transform;