diff --git a/packages/cli/src/cli-program.ts b/packages/cli/src/cli-program.ts
index fd7a50ef..b4392cf5 100644
--- a/packages/cli/src/cli-program.ts
+++ b/packages/cli/src/cli-program.ts
@@ -42,6 +42,20 @@ interface KtxGlobalOptionValues {
   debug?: boolean;
 }
 
+const ROOT_COMMANDS = new Set([
+  'setup',
+  'connection',
+  'ingest',
+  'wiki',
+  'sl',
+  'runtime',
+  'serve',
+  'status',
+  'help',
+  'dev',
+  'agent',
+]);
+
 export interface CommandWithGlobalOptions {
   opts: () => object;
   optsWithGlobals?: () => object;
@@ -158,6 +172,88 @@ function formatCliError(error: unknown): string {
   return error instanceof Error ? error.message : String(error);
 }
 
+function shouldUseErrorStyle(io: KtxCliIo): boolean {
+  return io.stdout.isTTY === true && !process.env.NO_COLOR && process.env.TERM !== 'dumb' && !process.env.CI;
+}
+
+function ansi(text: string, open: string, close: string, enabled: boolean): string {
+  return enabled ? `\u001b[${open}m${text}\u001b[${close}m` : text;
+}
+
+function formatErrorLabel(enabled: boolean): string {
+  return ansi('error', '31', '39', enabled);
+}
+
+function formatCommandToken(command: string, enabled: boolean): string {
+  return enabled ? ansi(command, '1', '22', true) : `\`${command}\``;
+}
+
+function formatHint(text: string, enabled: boolean): string {
+  return ansi(text, '2', '22', enabled);
+}
+
+function findRootCommandToken(argv: string[]): string | null | undefined {
+  for (let i = 0; i < argv.length; i += 1) {
+    const arg = argv[i];
+    if (!arg) {
+      continue;
+    }
+    if (arg === '--') {
+      return null;
+    }
+    if (arg === '--project-dir') {
+      const value = argv[i + 1];
+      if (!value || value.startsWith('-')) {
+        return undefined;
+      }
+      i += 1;
+      continue;
+    }
+    if (arg.startsWith('--project-dir=')) {
+      continue;
+    }
+    if (arg === '--debug' || arg === '--help' || arg === '-h' || arg === '--version' || arg === '-v') {
+      continue;
+    }
+    if (arg.startsWith('-')) {
+      return undefined;
+    }
+    return arg;
+  }
+  return null;
+}
+
+function writeRemovedInitCommandError(io: KtxCliIo): void {
+  const styled = shouldUseErrorStyle(io);
+  const command = (value: string) => formatCommandToken(value, styled);
+  io.stderr.write(`${formatErrorLabel(styled)}: ${command('ktx init')} is no longer a public command.\n\n`);
+  io.stderr.write('Create or resume a KTX project:\n');
+  io.stderr.write(`  ${command('ktx setup')}\n`);
+  io.stderr.write(`  ${command('ktx setup --new --project-dir <path>')}\n\n`);
+  io.stderr.write('Developer scaffolding:\n');
+  io.stderr.write(`  ${command('ktx dev init [path] --name <project-name>')}\n\n`);
+  io.stderr.write(`${formatHint('Run `ktx --help` to see all commands.', styled)}\n`);
+}
+
+function writeUnknownRootCommandError(commandName: string, io: KtxCliIo): void {
+  const styled = shouldUseErrorStyle(io);
+  io.stderr.write(`${formatErrorLabel(styled)}: unknown command ${formatCommandToken(commandName, styled)}\n\n`);
+  io.stderr.write(`${formatHint('Run `ktx --help` to see available commands.', styled)}\n`);
+}
+
+function writeRootCommandPreflightError(argv: string[], io: KtxCliIo): boolean {
+  const commandName = findRootCommandToken(argv);
+  if (commandName === undefined || commandName === null || ROOT_COMMANDS.has(commandName)) {
+    return false;
+  }
+  if (commandName === 'init') {
+    writeRemovedInitCommandError(io);
+    return true;
+  }
+  writeUnknownRootCommandError(commandName, io);
+  return true;
+}
+
 async function runBareInteractiveCommand(
   program: Command,
   io: KtxCliIo,
@@ -261,6 +357,10 @@ export async function runCommanderKtxCli(
     return 0;
   }
 
+  if (writeRootCommandPreflightError(argv, io)) {
+    return 1;
+  }
+
   try {
     await profileSpan('commander:parseAsync', () => program.parseAsync(argv, { from: 'user' }));
   } catch (error) {
diff --git a/packages/cli/src/doctor.test.ts b/packages/cli/src/doctor.test.ts
index d0ebdb95..2850052a 100644
--- a/packages/cli/src/doctor.test.ts
+++ b/packages/cli/src/doctor.test.ts
@@ -266,6 +266,27 @@ describe('runKtxDoctor', () => {
     expect(testIo.stdout()).toContain('PASS Connections: 1 configured');
   });
 
+  it('points project config failures at setup instead of removed init', async () => {
+    const testIo = makeIo();
+
+    await expect(
+      runKtxDoctor(
+        { command: 'project', projectDir: tempDir, outputMode: 'plain', inputMode: 'disabled' },
+        testIo.io,
+        {
+          runSetupChecks: async () => [
+            { id: 'node', label: 'Node 22+', status: 'pass', detail: 'v22.16.0 ABI 127' },
+          ],
+          runHistoricSqlDoctorChecks: async () => [],
+        },
+      ),
+    ).resolves.toBe(1);
+
+    expect(testIo.stdout()).toContain('FAIL Project config:');
+    expect(testIo.stdout()).toContain(`Fix: Run: ktx setup --new --project-dir ${tempDir}`);
+    expect(testIo.stdout()).not.toContain('ktx init');
+  });
+
   it('includes Postgres historic-SQL readiness in project doctor output', async () => {
     await writeFile(
       join(tempDir, 'ktx.yaml'),
diff --git a/packages/cli/src/doctor.ts b/packages/cli/src/doctor.ts
index 915c7cef..d9edfbd2 100644
--- a/packages/cli/src/doctor.ts
+++ b/packages/cli/src/doctor.ts
@@ -339,7 +339,7 @@ async function runProjectChecks(projectDir: string, deps: KtxDoctorDeps = {}): P
         'project-config',
         'Project config',
         failureMessage(error),
-        `Run: ktx init ${projectDir} --name <project-name>`,
+        `Run: ktx setup --new --project-dir ${projectDir}`,
       ),
     );
   }
diff --git a/packages/cli/src/index.test.ts b/packages/cli/src/index.test.ts
index 333c96e8..4dc73ddd 100644
--- a/packages/cli/src/index.test.ts
+++ b/packages/cli/src/index.test.ts
@@ -99,12 +99,33 @@ describe('memory-flow renderer exports', () => {
 
 describe('runKtxCli', () => {
   let tempDir: string;
+  let previousCi: string | undefined;
+  let previousNoColor: string | undefined;
+  let previousTerm: string | undefined;
 
   beforeEach(async () => {
+    previousCi = process.env.CI;
+    previousNoColor = process.env.NO_COLOR;
+    previousTerm = process.env.TERM;
     tempDir = await mkdtemp(join(tmpdir(), 'ktx-cli-'));
   });
 
   afterEach(async () => {
+    if (previousCi === undefined) {
+      delete process.env.CI;
+    } else {
+      process.env.CI = previousCi;
+    }
+    if (previousNoColor === undefined) {
+      delete process.env.NO_COLOR;
+    } else {
+      process.env.NO_COLOR = previousNoColor;
+    }
+    if (previousTerm === undefined) {
+      delete process.env.TERM;
+    } else {
+      process.env.TERM = previousTerm;
+    }
     await rm(tempDir, { recursive: true, force: true });
   });
 
@@ -2402,7 +2423,58 @@ describe('runKtxCli', () => {
 
     await expect(runKtxCli(['init'], testIo.io)).resolves.toBe(1);
 
-    expect(testIo.stderr()).toContain("error: unknown command 'init'");
+    expect(testIo.stdout()).toBe('');
+    expect(testIo.stderr()).toContain('error: `ktx init` is no longer a public command.');
+    expect(testIo.stderr()).toContain('ktx setup');
+    expect(testIo.stderr()).toContain('ktx setup --new --project-dir <path>');
+    expect(testIo.stderr()).toContain('ktx dev init [path] --name <project-name>');
+    expect(testIo.stderr()).not.toContain('Did you mean');
+    expect(testIo.stderr()).not.toContain('Usage: ktx');
+    expect(testIo.stderr()).not.toContain('\u001b[');
+  });
+
+  it('recognizes removed init after global options', async () => {
+    const testIo = makeIo();
+
+    await expect(runKtxCli(['--project-dir', tempDir, 'init'], testIo.io)).resolves.toBe(1);
+
+    expect(testIo.stderr()).toContain('error: `ktx init` is no longer a public command.');
+    expect(testIo.stderr()).toContain('ktx setup --new --project-dir <path>');
+    expect(testIo.stderr()).not.toContain('Usage: ktx');
+  });
+
+  it('lets Commander handle malformed global options', async () => {
+    const testIo = makeIo();
+
+    await expect(runKtxCli(['--project-dir'], testIo.io)).resolves.toBe(1);
+
+    expect(testIo.stderr()).toContain("option '--project-dir <path>' argument missing");
+    expect(testIo.stderr()).not.toContain('no longer a public command');
+  });
+
+  it('uses restrained terminal styling for removed-command guidance in TTY output', async () => {
+    delete process.env.CI;
+    delete process.env.NO_COLOR;
+    process.env.TERM = 'xterm-256color';
+    const testIo = makeIo({ stdoutIsTty: true });
+
+    await expect(runKtxCli(['init'], testIo.io)).resolves.toBe(1);
+
+    expect(testIo.stderr()).toContain('\u001b[31merror\u001b[39m');
+    expect(testIo.stderr()).toContain('\u001b[1mktx setup\u001b[22m');
+    expect(testIo.stderr()).toContain('\u001b[2mRun `ktx --help` to see all commands.\u001b[22m');
+  });
+
+  it('honors NO_COLOR for removed-command guidance', async () => {
+    delete process.env.CI;
+    process.env.NO_COLOR = '1';
+    process.env.TERM = 'xterm-256color';
+    const testIo = makeIo({ stdoutIsTty: true });
+
+    await expect(runKtxCli(['init'], testIo.io)).resolves.toBe(1);
+
+    expect(testIo.stderr()).toContain('error: `ktx init` is no longer a public command.');
+    expect(testIo.stderr()).not.toContain('\u001b[');
   });
 
   it('returns an error code for unknown commands', async () => {
@@ -2410,6 +2482,9 @@ describe('runKtxCli', () => {
 
     await expect(runKtxCli(['unknown'], testIo.io)).resolves.toBe(1);
 
-    expect(testIo.stderr()).toContain("error: unknown command 'unknown'");
+    expect(testIo.stdout()).toBe('');
+    expect(testIo.stderr()).toContain('error: unknown command `unknown`');
+    expect(testIo.stderr()).toContain('Run `ktx --help` to see available commands.');
+    expect(testIo.stderr()).not.toContain('Usage: ktx');
   });
 });
diff --git a/scripts/installed-live-database-smoke.mjs b/scripts/installed-live-database-smoke.mjs
index 7fe061c8..12738abc 100644
--- a/scripts/installed-live-database-smoke.mjs
+++ b/scripts/installed-live-database-smoke.mjs
@@ -120,6 +120,22 @@ export function buildLiveDatabaseIngestArgs(projectDir, databaseIntrospectionUrl
   ];
 }
 
+export function buildSetupNewProjectArgs(projectDir) {
+  return [
+    'exec',
+    'ktx',
+    'setup',
+    '--new',
+    '--project-dir',
+    projectDir,
+    '--skip-llm',
+    '--skip-embeddings',
+    '--skip-databases',
+    '--skip-sources',
+    '--no-input',
+  ];
+}
+
 export function buildLiveDatabaseStatusArgs(projectDir, runId) {
   return ['exec', 'ktx', 'ingest', 'status', '--project-dir', projectDir, runId];
 }
@@ -308,11 +324,11 @@ async function main() {
     await prepareCleanInstall(layout, cleanInstallDir);
 
     await mkdir(projectDir, { recursive: true });
-    const init = await run('pnpm', ['exec', 'ktx', 'init', projectDir, '--name', 'artifact-live-database'], {
+    const setup = await run('pnpm', buildSetupNewProjectArgs(projectDir), {
       cwd: cleanInstallDir,
       timeout: 30_000,
     });
-    requireSuccess('ktx init', init);
+    requireSuccess('ktx setup --new', setup);
     await writeFile(join(projectDir, 'ktx.yaml'), buildKtxYaml(postgresUrl), 'utf8');
 
     const databaseIntrospectionUrl = await startDaemon(cleanInstallDir);
diff --git a/scripts/installed-live-database-smoke.test.mjs b/scripts/installed-live-database-smoke.test.mjs
index a3d6be9e..e9ae8513 100644
--- a/scripts/installed-live-database-smoke.test.mjs
+++ b/scripts/installed-live-database-smoke.test.mjs
@@ -9,6 +9,7 @@ import {
   buildPostgresUrl,
   buildPostgresReadyArgs,
   buildSeedSql,
+  buildSetupNewProjectArgs,
   smokeContainerName,
 } from './installed-live-database-smoke.mjs';
 
@@ -99,6 +100,20 @@ describe('installed live-database artifact smoke helpers', () => {
   });
 
   it('builds installed CLI live-database ingest and status commands', () => {
+    assert.deepEqual(buildSetupNewProjectArgs('/tmp/project'), [
+      'exec',
+      'ktx',
+      'setup',
+      '--new',
+      '--project-dir',
+      '/tmp/project',
+      '--skip-llm',
+      '--skip-embeddings',
+      '--skip-databases',
+      '--skip-sources',
+      '--no-input',
+    ]);
+
     assert.deepEqual(buildLiveDatabaseIngestArgs('/tmp/project', 'http://127.0.0.1:8765'), [
       'exec',
       'ktx',