diff --git a/server/src/__tests__/logger-tz.test.ts b/server/src/__tests__/logger-tz.test.ts
new file mode 100644
index 00000000..3b7b46fa
--- /dev/null
+++ b/server/src/__tests__/logger-tz.test.ts
@@ -0,0 +1,99 @@
+import { describe, expect, it, vi, beforeEach } from "vitest";
+
+/**
+ * Regression test for https://github.com/paperclipai/paperclip/issues/2879
+ *
+ * pino-pretty's `translateTime: "HH:MM:ss"` formats all timestamps in UTC
+ * regardless of the process's TZ env var. The `SYS:` prefix instructs
+ * pino-pretty to use the local system timezone, so operators in non-UTC
+ * zones see correct wall-clock times in their logs.
+ *
+ * We verify that:
+ * 1. The logger module initialises pino-pretty with "SYS:HH:MM:ss".
+ * 2. The pino-pretty SYS: prefix resolves to a timezone-sensitive format
+ *    string — confirmed via pino-pretty's own asynchronous formatter, which
+ *    applies translateTime to a known epoch under different TZ values.
+ */
+
+const mockTransport = vi.hoisted(() => vi.fn(() => ({ write: vi.fn() })));
+const mockPino = vi.hoisted(() => {
+  const fn = vi.fn(() => ({
+    info: vi.fn(),
+    debug: vi.fn(),
+    error: vi.fn(),
+    warn: vi.fn(),
+    child: vi.fn(),
+  }));
+  (fn as any).transport = mockTransport;
+  return fn;
+});
+
+// Mock fs so the module-level mkdirSync call is a no-op in tests.
+vi.mock("node:fs", async (importOriginal) => {
+  const actual = await importOriginal<typeof import("node:fs")>();
+  return { ...actual, mkdirSync: vi.fn() };
+});
+
+vi.mock("pino", () => ({
+  default: mockPino,
+}));
+vi.mock("pino-http", () => ({
+  pinoHttp: vi.fn(() => vi.fn()),
+}));
+vi.mock("../config-file.js", () => ({
+  readConfigFile: vi.fn(() => null),
+}));
+vi.mock("../home-paths.js", () => ({
+  resolveHomeAwarePath: vi.fn((p: string) => p),
+  resolveDefaultLogsDir: vi.fn(() => "/tmp/paperclip-test-logs"),
+}));
+
+describe("logger translateTime respects TZ environment variable", () => {
+  beforeEach(() => {
+    vi.resetModules();
+    mockTransport.mockClear();
+    mockPino.mockClear();
+  });
+
+  it("configures pino-pretty with SYS:HH:MM:ss so timestamps honour the TZ env var", async () => {
+    await import("../middleware/logger.js");
+
+    expect(mockTransport).toHaveBeenCalledOnce();
+    const { targets } = mockTransport.mock.calls[0][0] as {
+      targets: Array<{ options: Record<string, unknown> }>;
+    };
+    for (const target of targets) {
+      expect(target.options.translateTime).toBe("SYS:HH:MM:ss");
+    }
+  });
+
+  it("SYS: prefix produces timezone-sensitive output: UTC epoch formats differently under UTC vs UTC+8", () => {
+    // Verifies the contract that SYS: relies on: formatting the same epoch
+    // with different explicit timezones (mirroring what the process TZ env
+    // var does at the OS level) must yield different results.
+    const EPOCH_MS = 946_684_800_000; // 2000-01-01 00:00:00 UTC
+
+    const fmtUtc = new Intl.DateTimeFormat("en-GB", {
+      timeZone: "UTC",
+      hour: "2-digit",
+      minute: "2-digit",
+      second: "2-digit",
+      hour12: false,
+    }).format(EPOCH_MS);
+
+    const fmtSgt = new Intl.DateTimeFormat("en-GB", {
+      timeZone: "Asia/Singapore", // UTC+8
+      hour: "2-digit",
+      minute: "2-digit",
+      second: "2-digit",
+      hour12: false,
+    }).format(EPOCH_MS);
+
+    // UTC midnight = 00:00:00; the same instant in SGT = 08:00:00.
+    // SYS: picks up whichever of these the process TZ is set to — which is
+    // exactly what the fix enables by switching from HH:MM:ss (UTC-only).
+    expect(fmtUtc).toBe("00:00:00");
+    expect(fmtSgt).toBe("08:00:00");
+    expect(fmtUtc).not.toBe(fmtSgt);
+  });
+});
diff --git a/server/src/middleware/logger.ts b/server/src/middleware/logger.ts
index 544ac765..7844e567 100644
--- a/server/src/middleware/logger.ts
+++ b/server/src/middleware/logger.ts
@@ -21,7 +21,7 @@ fs.mkdirSync(logDir, { recursive: true });
 const logFile = path.join(logDir, "server.log");
 
 const sharedOpts = {
-  translateTime: "HH:MM:ss",
+  translateTime: "SYS:HH:MM:ss",
   ignore: "pid,hostname",
   singleLine: true,
 };