diff --git a/src/__tests__/health.test.ts b/src/__tests__/health.test.ts
index 7866215..9cb4ec5 100644
--- a/src/__tests__/health.test.ts
+++ b/src/__tests__/health.test.ts
@@ -1,6 +1,7 @@
-import { describe, it, expect, beforeAll } from 'vitest';
+import { describe, it, expect, beforeAll, afterAll, vi } from 'vitest';
 import request from 'supertest';
 import { app } from '../index.js';
+import * as dbClient from '../db/client.js';
 
 beforeAll(() => {
     process.env.NODE_ENV = 'test';
@@ -8,9 +9,46 @@ beforeAll(() => {
 });
 
 describe('GET /health (public)', () => {
-    it('returns 200 with correct service name', async () => {
+    let getConnectionSpy: ReturnType<typeof vi.spyOn> | null = null;
+
+    afterAll(() => {
+        if (getConnectionSpy) {
+            getConnectionSpy.mockRestore();
+        }
+        // restore global fetch if stubbed
+        if ((global as any).fetch && (global as any).fetch.mockRestore) {
+            (global as any).fetch.mockRestore();
+        }
+    });
+
+    it('returns 200 with service and dependency details', async () => {
+        // Ensure dependencies are mocked to pass
+        const fakeClient = {
+            connect: vi.fn().mockResolvedValue(undefined),
+            query: vi.fn().mockResolvedValue({ rows: [] }),
+            end: vi.fn().mockResolvedValue(undefined),
+        };
+
+        getConnectionSpy = vi.spyOn(dbClient, 'getConnection').mockReturnValue(fakeClient as any);
+        const fetchMock = vi.fn().mockResolvedValue({ ok: true, status: 200 });
+        (global as any).fetch = fetchMock;
+
+        process.env.DATABASE_URL = 'postgres://user:pass@localhost:5432/test';
+
         const res = await request(app).get('/health');
+
         expect(res.status).toBe(200);
-        expect(res.body).toEqual({ status: 'ok', service: 'creditra-backend' });
+        expect(res.body).toMatchObject({
+            data: {
+                status: 'ok',
+                service: 'creditra-backend',
+                ready: true,
+                dependencies: {
+                    database: { status: 'ok' },
+                    horizon: { status: 'ok' },
+                },
+            },
+            error: null,
+        });
     });
 });
diff --git a/src/routes/health.ts b/src/routes/health.ts
index 4c2631f..d3b6877 100644
--- a/src/routes/health.ts
+++ b/src/routes/health.ts
@@ -1,11 +1,107 @@
 import { Router } from 'express';
 import { ok } from '../utils/response.js';
+import { getConnection } from '../db/client.js';
+import { resolveConfig } from '../services/horizonListener.js';
 
 export const healthRouter = Router();
 
-healthRouter.get('/', (_req, res) => {
+type DependencyState = 'ok' | 'unconfigured' | 'degraded';
+
+interface DependencyHealth {
+     status: DependencyState;
+     message?: string;
+}
+
+const DB_CHECK_SQL = 'SELECT 1';
+const DB_CHECK_TIMEOUT_MS = 1000;
+const HORIZON_CHECK_TIMEOUT_MS = 2000;
+
+function withTimeout<T>(promise: Promise<T>, timeoutMs: number, label: string): Promise<T> {
+     return new Promise((resolve, reject) => {
+          const timer = setTimeout(() => {
+               reject(new Error(`${label} check timed out after ${timeoutMs}ms`));
+          }, timeoutMs);
+
+          promise
+               .then((value) => {
+                    clearTimeout(timer);
+                    resolve(value);
+               })
+               .catch((error) => {
+                    clearTimeout(timer);
+                    reject(error);
+               });
+     });
+}
+
+async function checkDatabase(): Promise<DependencyHealth> {
+     const databaseUrl = process.env.DATABASE_URL;
+
+     if (!databaseUrl) {
+          return { status: 'unconfigured', message: 'DATABASE_URL is not set' };
+     }
+
+     let client;
+     try {
+          client = getConnection();
+          if (client.connect) {
+               await withTimeout(client.connect(), DB_CHECK_TIMEOUT_MS, 'Database connect');
+          }
+          await withTimeout(client.query(DB_CHECK_SQL), DB_CHECK_TIMEOUT_MS, 'Database query');
+          return { status: 'ok' };
+     } catch (error: unknown) {
+          return {
+               status: 'degraded',
+               message: error instanceof Error ? error.message : 'unknown database error',
+          };
+     } finally {
+          try {
+               if (client && typeof client.end === 'function') {
+                    await client.end();
+               }
+          } catch {
+               // ignore shutdown errors
+          }
+     }
+}
+
+async function checkHorizon(): Promise<DependencyHealth> {
+     const horizonUrl = resolveConfig().horizonUrl;
+
+     try {
+          const controller = new AbortController();
+          const timeout = setTimeout(() => controller.abort(), HORIZON_CHECK_TIMEOUT_MS);
+          const response = await fetch(horizonUrl, { signal: controller.signal });
+          clearTimeout(timeout);
+
+          if (!response.ok) {
+               return { status: 'degraded', message: `Horizon returned HTTP ${response.status}` };
+          }
+
+          return { status: 'ok' };
+     } catch (error: unknown) {
+          const message =
+               error instanceof Error && (error.name === 'AbortError' || error.message.includes('timed out'))
+                    ? `Horizon check timed out (${HORIZON_CHECK_TIMEOUT_MS}ms)`
+                    : error instanceof Error
+                         ? error.message
+                         : 'unknown horizon error';
+
+          return { status: 'degraded', message };
+     }
+}
+
+healthRouter.get('/', async (_req, res) => {
+     const [dbStatus, horizonStatus] = await Promise.all([checkDatabase(), checkHorizon()]);
+     const ready = dbStatus.status === 'ok' && horizonStatus.status === 'ok';
+
      ok(res, {
           status: 'ok',
           service: 'creditra-backend',
+          ready,
+          dependencies: {
+               database: dbStatus,
+               horizon: horizonStatus,
+          },
      });
 });
\ No newline at end of file
diff --git a/tests/api.test.ts b/tests/api.test.ts
index d1391fc..5a0bda8 100644
--- a/tests/api.test.ts
+++ b/tests/api.test.ts
@@ -9,10 +9,14 @@ describe('API Integration Tests', () => {
             const response = await request(app).get('/health');
 
             expect(response.status).toBe(200);
-            expect(response.body).toEqual({
-                data: { status: 'ok', service: 'creditra-backend' },
-                error: null
+            expect(response.body).toHaveProperty('data');
+            expect(response.body).toHaveProperty('error', null);
+            expect(response.body.data).toMatchObject({
+                status: 'ok',
+                service: 'creditra-backend',
             });
+            expect(response.body.data).toHaveProperty('ready');
+            expect(response.body.data).toHaveProperty('dependencies');
         });
     });
 
diff --git a/tests/health.test.ts b/tests/health.test.ts
index fb65b36..20bc272 100644
--- a/tests/health.test.ts
+++ b/tests/health.test.ts
@@ -1,3 +1,4 @@
+import { describe, it, expect } from 'vitest';
 import request from 'supertest';
 import express from 'express';
 import { healthRouter } from '../src/routes/health';
@@ -13,13 +14,17 @@ describe('GET /health', () => {
           expect(res.status).toBe(200);
      });
 
-     it('should return correct JSON structure', async () => {
+     it('should return correct JSON envelope structure', async () => {
           const res = await request(app).get('/health');
 
-          expect(res.body).toEqual({
+          expect(res.body).toHaveProperty('data');
+          expect(res.body).toHaveProperty('error', null);
+          expect(res.body.data).toMatchObject({
                status: 'ok',
                service: 'creditra-backend',
           });
+          expect(res.body.data).toHaveProperty('ready');
+          expect(res.body.data).toHaveProperty('dependencies');
      });
 
      it('should have content-type application/json', async () => {