diff --git a/src/lib/components/RelayStatus.svelte b/src/lib/components/RelayStatus.svelte
index cf4d069..9afbe91 100644
--- a/src/lib/components/RelayStatus.svelte
+++ b/src/lib/components/RelayStatus.svelte
@@ -1,5 +1,5 @@
 <script lang="ts">
-  import { Button, Alert } from "flowbite-svelte";
+  import { Button, Alert, Checkbox } from "flowbite-svelte";
   import {
     ndkSignedIn,
     testRelayConnection,
@@ -7,7 +7,8 @@
     checkEnvironmentForWebSocketDowngrade,
   } from "$lib/ndk";
   import {  onMount } from "svelte";
-  import { activeInboxRelays, activeOutboxRelays, getNdkContext } from "$lib/ndk";
+  import { activeInboxRelays, activeOutboxRelays, getNdkContext, updateActiveRelayStores } from "$lib/ndk";
+  import { includeLocalhostRelays } from "$lib/stores/userStore";
 
   const ndk = getNdkContext();
 
@@ -114,6 +115,19 @@
     if (status.error) return `Error: ${status.error}`;
     return "Failed to Connect";
   }
+
+  // AI-NOTE: 2025-01-24 - Handle localhost relay preference change
+  async function handleLocalhostToggle() {
+    // Update relay stores to reflect the new preference
+    try {
+      await updateActiveRelayStores(ndk, true); // Force update
+    } catch (error) {
+      console.warn("Failed to update relay stores after localhost preference change:", error);
+    }
+    
+    // Re-run relay tests when the preference changes
+    void runRelayTests();
+  }
 </script>
 
 <div class="space-y-4">
@@ -124,6 +138,17 @@
     </Button>
   </div>
 
+  <div class="flex items-center gap-2 p-3 bg-gray-50 dark:bg-gray-800 rounded">
+    <Checkbox 
+      id="localhost-relays-checkbox"
+      bind:checked={$includeLocalhostRelays}
+      onchange={handleLocalhostToggle}
+    />
+    <label for="localhost-relays-checkbox" class="text-sm text-gray-700 dark:text-gray-300 cursor-pointer">
+      Include localhost relays (for development/testing)
+    </label>
+  </div>
+
   {#if !$ndkSignedIn}
     <Alert color="yellow">
       <span class="font-medium">Anonymous Mode</span>
diff --git a/src/lib/ndk.ts b/src/lib/ndk.ts
index d5d0d69..f724969 100644
--- a/src/lib/ndk.ts
+++ b/src/lib/ndk.ts
@@ -12,6 +12,7 @@ import {
   buildCompleteRelaySet,
   deduplicateRelayUrls,
   testRelayConnection,
+  setLocalhostPreferenceChangeCallback,
 } from "./utils/relay_management.ts";
 import { userStore } from "./stores/userStore.ts";
 
@@ -52,6 +53,16 @@ let relaySetLastUpdated: number = 0;
 const RELAY_SET_CACHE_DURATION = 5 * 60 * 1000; // 5 minutes
 const RELAY_SET_STORAGE_KEY = "alexandria/relay_set_cache";
 
+// AI-NOTE: 2025-01-24 - Function to invalidate relay cache when localhost preference changes
+function invalidateRelayCache() {
+  persistentRelaySet = null;
+  relaySetLastUpdated = 0;
+  console.debug("[NDK.ts] Relay cache invalidated due to localhost preference change");
+}
+
+// Set up callback for localhost preference changes
+setLocalhostPreferenceChangeCallback(invalidateRelayCache);
+
 /**
  * Load persistent relay set from localStorage
  */
diff --git a/src/lib/stores/userStore.ts b/src/lib/stores/userStore.ts
index a2551e0..4f84cf8 100644
--- a/src/lib/stores/userStore.ts
+++ b/src/lib/stores/userStore.ts
@@ -39,6 +39,36 @@ export const userStore = writable<UserState>({
   signedIn: false,
 });
 
+// AI-NOTE: 2025-01-24 - User preference for localhost relay inclusion
+// This allows users to disable localhost relays for security reasons
+const LOCALHOST_RELAYS_STORAGE_KEY = "alexandria/preferences/include_localhost_relays";
+
+// Initialize from localStorage if available
+let initialLocalhostPreference = false;
+if (typeof window !== "undefined") {
+  try {
+    const stored = localStorage.getItem(LOCALHOST_RELAYS_STORAGE_KEY);
+    if (stored !== null) {
+      initialLocalhostPreference = JSON.parse(stored);
+    }
+  } catch (error) {
+    console.warn("Failed to load localhost relay preference from localStorage:", error);
+  }
+}
+
+export const includeLocalhostRelays = writable<boolean>(initialLocalhostPreference);
+
+// Subscribe to changes and persist to localStorage
+if (typeof window !== "undefined") {
+  includeLocalhostRelays.subscribe((value) => {
+    try {
+      localStorage.setItem(LOCALHOST_RELAYS_STORAGE_KEY, JSON.stringify(value));
+    } catch (error) {
+      console.warn("Failed to save localhost relay preference to localStorage:", error);
+    }
+  });
+}
+
 // Helper functions for relay management
 function getRelayStorageKey(user: NDKUser, type: "inbox" | "outbox"): string {
   return `${loginStorageKey}/${user.pubkey}/${type}`;
diff --git a/src/lib/utils/relay_management.ts b/src/lib/utils/relay_management.ts
index 32c21b8..ac779ec 100644
--- a/src/lib/utils/relay_management.ts
+++ b/src/lib/utils/relay_management.ts
@@ -8,6 +8,7 @@ import {
 } from "../consts.ts";
 import { getRelaySetForNetworkCondition } from "./network_detection.ts";
 import { networkCondition } from "../stores/networkStore.ts";
+import { includeLocalhostRelays } from "../stores/userStore.ts";
 import { get } from "svelte/store";
 
 /**
@@ -349,6 +350,23 @@ async function testLocalRelays(
   }
 }
 
+// AI-NOTE: 2025-01-24 - Cache invalidation for localhost preference changes
+// This allows the relay management system to react to user preference changes
+let localhostPreferenceChangeCallback: (() => void) | null = null;
+
+export function setLocalhostPreferenceChangeCallback(callback: () => void) {
+  localhostPreferenceChangeCallback = callback;
+}
+
+// Subscribe to localhost preference changes and trigger relay updates
+if (typeof window !== "undefined") {
+  includeLocalhostRelays.subscribe(() => {
+    if (localhostPreferenceChangeCallback) {
+      localhostPreferenceChangeCallback();
+    }
+  });
+}
+
 /**
  * Discovers local relays by testing common localhost URLs
  * @param ndk NDK instance
@@ -356,6 +374,13 @@ async function testLocalRelays(
  */
 export async function discoverLocalRelays(ndk: NDK): Promise<string[]> {
   try {
+    // Check if user has disabled localhost relays
+    const shouldIncludeLocalhost = get(includeLocalhostRelays);
+    if (!shouldIncludeLocalhost) {
+      console.debug("[relay_management.ts] Localhost relays disabled by user preference");
+      return [];
+    }
+
     // If no local relays are configured, return empty array
     if (localRelays.length === 0) {
       console.debug("[relay_management.ts] No local relays configured");
@@ -686,7 +711,8 @@ export async function buildCompleteRelaySet(
     user?.pubkey || "null",
   );
 
-  // Discover local relays first
+  // AI-NOTE: 2025-01-24 - Local relay discovery respects user preference
+  // The discoverLocalRelays function will return empty array if user has disabled localhost relays
   const discoveredLocalRelays = await discoverLocalRelays(ndk);
   console.debug(
     "[relay_management.ts] buildCompleteRelaySet: Discovered local relays:",