diff --git a/app/(app)/layout.tsx b/app/(app)/layout.tsx
index b770043..a5630a9 100644
--- a/app/(app)/layout.tsx
+++ b/app/(app)/layout.tsx
@@ -76,7 +76,6 @@ export default async function AppLayout({
           <AppSidebar
             servers={userServers}
             conversations={formattedConversations}
-            user={currentUser}
           />
           <div className="flex-1 flex min-w-0">{children}</div>
           <MemberSidebar />
diff --git a/components/layout/AppSidebar.tsx b/components/layout/AppSidebar.tsx
index e21a93a..2c06e7a 100644
--- a/components/layout/AppSidebar.tsx
+++ b/components/layout/AppSidebar.tsx
@@ -13,7 +13,6 @@ import {
   useActiveServer,
   type ServerWithChannels,
 } from "@/lib/context/ServerContext";
-import type { UserStatus } from "@/db/schema";
 import { clsx } from "clsx";
 import {
   DirectMessageSidebar,
@@ -21,26 +20,14 @@ import {
 } from "../sidebar/DirectMessageSidebar";
 import { usePathname } from "next/navigation";
 
-/** Properties representing the user in the sidebar. */
-export interface SidebarUser {
-  username: string;
-  color: string;
-  status: UserStatus;
-}
-
 /** Properties for the AppSidebar component. */
 interface AppSidebarProps {
   servers: ServerWithChannels[];
   conversations: SidebarConversation[];
-  user: SidebarUser;
 }
 
-/**Renders the responsive application sidebar containing server navigation, channel lists, and user profile. */
-export function AppSidebar({
-  servers,
-  user,
-  conversations = [],
-}: AppSidebarProps) {
+/** Renders the responsive application sidebar containing server navigation, channel lists, and user profile. */
+export function AppSidebar({ servers, conversations = [] }: AppSidebarProps) {
   const { isNavOpen, closeAll } = useSidebarStore();
   const { activeServer } = useActiveServer();
   const pathname = usePathname();
@@ -66,7 +53,7 @@ export function AppSidebar({
           )}
         </div>
         <div className="w-78">
-          <UserPanel user={user} />
+          <UserPanel />
         </div>
       </aside>
 
@@ -92,7 +79,7 @@ export function AppSidebar({
             <ChannelSidebar />
           )}
         </div>
-        <UserPanel user={user} />
+        <UserPanel />
       </div>
     </>
   );
diff --git a/components/settings/SettingsView.tsx b/components/settings/SettingsView.tsx
index 34847e8..e27b6b1 100644
--- a/components/settings/SettingsView.tsx
+++ b/components/settings/SettingsView.tsx
@@ -1,33 +1,22 @@
 /**
  * @file components/settings/SettingsView.tsx
- * @description Main settings container component for managing user profile and preferences.
+ * @description Settings view component for updating user profile attributes like online status and avatar color.
  */
 
 "use client";
 
-import { useState } from "react";
 import { UserAvatar } from "@/components/ui/UserAvatar";
-import { UserStatus, User } from "@/db/schema";
+import { UserStatus } from "@/db/schema";
 import {
   MEMBER_STATUS_COLOR_CLASSES,
   MEMBER_COLOR_OPTIONS,
 } from "@/lib/constants/member.styles";
 import { UserRound, Palette } from "lucide-react";
+import { useUser } from "@/lib/context/UserContext";
 
-/** Props for the SettingsView component. */
-interface SettingsViewProps {
-  userId: string;
-  currentUser: User;
-}
-
-/** Renders the user settings view for profile management, status selection, and avatar color customization. */
-export function SettingsView({ userId, currentUser }: SettingsViewProps) {
-  const [selectedStatus, setSelectedStatus] = useState<UserStatus>(
-    currentUser.status,
-  );
-  const [selectedColor, setSelectedColor] = useState<string>(
-    currentUser.color || MEMBER_COLOR_OPTIONS[0],
-  );
+/** Renders the user settings view allowing profile, online status, and color customizations. */
+export function SettingsView() {
+  const { currentUser, updateCurrentUser } = useUser();
 
   const statuses: { label: string; value: UserStatus }[] = [
     { label: "Online", value: "ONLINE" },
@@ -36,42 +25,18 @@ export function SettingsView({ userId, currentUser }: SettingsViewProps) {
     { label: "DND", value: "DND" },
   ];
 
-  /** Updates local status state on user selection. */
-  const handleStatusChange = async (newStatus: UserStatus) => {
-    setSelectedStatus(newStatus);
-    try {
-      await fetch("/api/users/profile", {
-        method: "PATCH",
-        headers: { "Content-Type": "application/json" },
-        body: JSON.stringify({ status: newStatus }),
-      });
-    } catch (err) {
-      console.error("Failed to update status", err);
-    }
-  };
-
-  /** Updates local avatar color state on user selection. */
-  const handleColorChange = async (newColor: string) => {
-    setSelectedColor(newColor);
-    try {
-      await fetch("/api/users/profile", {
-        method: "PATCH",
-        headers: { "Content-Type": "application/json" },
-        body: JSON.stringify({ color: newColor }),
-      });
-    } catch (err) {
-      console.error("Failed to update color", err);
-    }
+  /** Sends optimistic updates to context and persists profile changes to the server API. */
+  const updateProfile = (fields: Partial<typeof currentUser>) => {
+    updateCurrentUser(fields);
+    fetch("/api/users/profile", {
+      method: "PATCH",
+      headers: { "Content-Type": "application/json" },
+      body: JSON.stringify(fields),
+    }).catch((err) => console.error("Failed to update profile", err));
   };
 
   if (!currentUser) return null;
 
-  const userWithUpdatedSettings = {
-    ...currentUser,
-    status: selectedStatus,
-    color: selectedColor,
-  };
-
   return (
     <div className="flex flex-col h-full w-full bg-background text-white gap-6">
       {/* Header */}
@@ -85,7 +50,7 @@ export function SettingsView({ userId, currentUser }: SettingsViewProps) {
       {/* Profile Overview Card */}
       <div className="bg-surface border border-muted/20 rounded-xl p-6 space-y-6">
         <div className="flex items-center gap-4">
-          <UserAvatar user={userWithUpdatedSettings} size="md" />
+          <UserAvatar user={currentUser} size="md" />
           <div>
             <h2 className="text-lg font-bold text-white">
               {currentUser.username}
@@ -101,14 +66,12 @@ export function SettingsView({ userId, currentUser }: SettingsViewProps) {
           </h3>
           <div className="grid grid-cols-2 sm:grid-cols-4 gap-3">
             {statuses.map((status) => {
-              const isSelected = selectedStatus === status.value;
-              const statusBgColor = MEMBER_STATUS_COLOR_CLASSES[status.value];
-
+              const isSelected = currentUser.status === status.value;
               return (
                 <button
                   key={status.value}
                   type="button"
-                  onClick={() => handleStatusChange(status.value)}
+                  onClick={() => updateProfile({ status: status.value })}
                   className={`flex items-center gap-2.5 p-3 rounded-lg border text-sm font-medium transition-all ${
                     isSelected
                       ? "border-accent bg-accent/10 text-white font-semibold"
@@ -116,7 +79,9 @@ export function SettingsView({ userId, currentUser }: SettingsViewProps) {
                   }`}
                 >
                   <span
-                    className={`w-2.5 h-2.5 rounded-full ${statusBgColor}`}
+                    className={`w-2.5 h-2.5 rounded-full ${
+                      MEMBER_STATUS_COLOR_CLASSES[status.value]
+                    }`}
                   />
                   {status.label}
                 </button>
@@ -132,12 +97,12 @@ export function SettingsView({ userId, currentUser }: SettingsViewProps) {
           </h3>
           <div className="flex flex-wrap gap-3">
             {MEMBER_COLOR_OPTIONS.map((colorClass) => {
-              const isSelected = selectedColor === colorClass;
+              const isSelected = currentUser.color === colorClass;
               return (
                 <button
                   key={colorClass}
                   type="button"
-                  onClick={() => handleColorChange(colorClass)}
+                  onClick={() => updateProfile({ color: colorClass })}
                   className={`w-8 h-8 rounded-full ${colorClass} transition-all flex items-center justify-center ${
                     isSelected
                       ? "ring-2 ring-white ring-offset-2 ring-offset-surface scale-110"
diff --git a/components/sidebar/UserPanel.tsx b/components/sidebar/UserPanel.tsx
index 14b04b0..9da2782 100644
--- a/components/sidebar/UserPanel.tsx
+++ b/components/sidebar/UserPanel.tsx
@@ -1,6 +1,6 @@
 /**
- * @file components/sidebar/UserPanel.tsx
- * @description Client component providing a footer user panel with session information, avatar display, online status, and settings/logout actions.
+ * @file components/layout/UserPanel.tsx
+ * @description User panel component displaying the current user's avatar, status, settings link, and logout button.
  */
 
 "use client";
@@ -8,31 +8,14 @@
 import { LogOut, Settings } from "lucide-react";
 import { signOut } from "next-auth/react";
 import { UserAvatar } from "@/components/ui/UserAvatar";
-import { UserStatus } from "@/db/schema";
+import { useUser } from "@/lib/context/UserContext";
 import Link from "next/link";
 
-/**
- * Props for the UserPanel component.
- */
-interface UserPanelProps {
-  /** User details including username, avatar color, and online status. */
-  user: {
-    username: string;
-    color: string;
-    status: UserStatus;
-  };
-}
+/** Renders the bottom user panel with user information and quick action controls. */
+export function UserPanel() {
+  const { currentUser } = useUser();
 
-/**
- * Renders the user panel footer containing the user's avatar, status, and action buttons.
- *
- * @param {UserPanelProps} props - Component properties.
- * @returns {JSX.Element} The rendered user panel component.
- */
-export function UserPanel({ user }: UserPanelProps) {
-  /**
-   * Handles user logout by invalidating the local session and redirecting to the login page.
-   */
+  /** Handles logging out the user and redirecting to the login page. */
   const handleLogout = async () => {
     await fetch("/api/auth/logout", { method: "POST" });
     await signOut({ callbackUrl: "/login" });
@@ -43,17 +26,17 @@ export function UserPanel({ user }: UserPanelProps) {
       <footer className="h-14 bg-background/80 hover:bg-background/90 border border-background/50 rounded-xl flex items-center justify-between px-3 gap-2 shadow-lg backdrop-blur-md transition-all duration-200">
         <div className="flex items-center gap-2.5 min-w-0 flex-1 cursor-pointer group">
           <UserAvatar
-            user={user}
+            user={currentUser}
             size="sm"
             className="transition-transform group-hover:scale-105"
           />
 
           <div className="flex-1 min-w-0">
             <p className="text-sm font-semibold text-foreground truncate leading-tight group-hover:text-accent transition-colors">
-              {user.username}
+              {currentUser.username}
             </p>
             <p className="text-xs text-muted truncate leading-tight font-medium capitalize">
-              {user.status.toLowerCase()}
+              {currentUser.status.toLowerCase()}
             </p>
           </div>
         </div>
diff --git a/lib/context/ServerContext.tsx b/lib/context/ServerContext.tsx
index 79c2338..df2aa9c 100644
--- a/lib/context/ServerContext.tsx
+++ b/lib/context/ServerContext.tsx
@@ -1,6 +1,6 @@
 /**
  * @file lib/context/ServerContext.tsx
- * @description Context for managing active server state and members across sidebars and mobile drawers.
+ * @description Context for managing active server state, current user state, and members across sidebars and mobile drawers.
  */
 
 "use client";
@@ -31,6 +31,9 @@ export interface ServerMember {
 interface ServerContextType {
   activeServer: ServerWithChannels | null;
   setActiveServer: (server: ServerWithChannels | null) => void;
+  currentUser: User | null;
+  setCurrentUser: (user: User | null) => void;
+  updateCurrentUser: (partialUser: Partial<User>) => void;
   addChannel: (channel: Channel) => void;
   removeChannel: (channelId: string) => void;
   updateChannel: (channel: Channel) => void;
@@ -43,11 +46,18 @@ interface ServerContextType {
 
 const ServerContext = createContext<ServerContextType | null>(null);
 
-/** Provides active server, channel, and member management state to child components. */
-export function ServerProvider({ children }: { children: React.ReactNode }) {
+/** Provides active server, channel, user, and member management state to child components. */
+export function ServerProvider({
+  children,
+  initialUser = null,
+}: {
+  children: React.ReactNode;
+  initialUser?: User | null;
+}) {
   const [activeServer, setActiveServer] = useState<ServerWithChannels | null>(
     null,
   );
+  const [currentUser, setCurrentUser] = useState<User | null>(initialUser);
   const [members, setMembers] = useState<ServerMember[]>([]);
 
   /** Updates the active server state using a partial updater function. */
@@ -57,6 +67,19 @@ export function ServerProvider({ children }: { children: React.ReactNode }) {
     setActiveServer((prev) => (prev ? { ...prev, ...fn(prev) } : null));
   };
 
+  /** Updates the local current user state and reflects changes in active server members list. */
+  const updateCurrentUser = (partialUser: Partial<User>) => {
+    setCurrentUser((prev) => (prev ? { ...prev, ...partialUser } : null));
+
+    if (currentUser?.id) {
+      updateServer((s) => ({
+        members: s.members.map((m) =>
+          m.id === currentUser.id ? { ...m, ...partialUser } : m,
+        ),
+      }));
+    }
+  };
+
   /** Adds a new channel to the active server. */
   const addChannel = (ch: Channel) =>
     updateServer((s) => ({ channels: [...s.channels, ch] }));
@@ -95,6 +118,9 @@ export function ServerProvider({ children }: { children: React.ReactNode }) {
       value={{
         activeServer,
         setActiveServer,
+        currentUser,
+        setCurrentUser,
+        updateCurrentUser,
         addChannel,
         removeChannel,
         updateChannel,
diff --git a/lib/context/UserContext.tsx b/lib/context/UserContext.tsx
index 28e0178..eb43c9b 100644
--- a/lib/context/UserContext.tsx
+++ b/lib/context/UserContext.tsx
@@ -5,7 +5,7 @@
 
 "use client";
 
-import { createContext, useContext } from "react";
+import { createContext, useContext, useState } from "react";
 import type { User } from "@/db/schema";
 
 /** Represents a friendship record between two users. */
@@ -19,6 +19,7 @@ interface Friendship {
 interface UserContextType {
   currentUser: User;
   friendships: Friendship[];
+  updateCurrentUser: (partialUser: Partial<User>) => void;
 }
 
 const UserContext = createContext<UserContextType | null>(null);
@@ -26,15 +27,24 @@ const UserContext = createContext<UserContextType | null>(null);
 /** Provides user data and friendship states to child components. */
 export function UserProvider({
   children,
-  currentUser,
+  currentUser: initialUser,
   friendships,
 }: {
   children: React.ReactNode;
   currentUser: User;
   friendships: Friendship[];
 }) {
+  const [currentUser, setCurrentUser] = useState<User>(initialUser);
+
+  /** Updates local current user state dynamically. */
+  const updateCurrentUser = (partialUser: Partial<User>) => {
+    setCurrentUser((prev) => ({ ...prev, ...partialUser }));
+  };
+
   return (
-    <UserContext.Provider value={{ currentUser, friendships }}>
+    <UserContext.Provider
+      value={{ currentUser, friendships, updateCurrentUser }}
+    >
       {children}
     </UserContext.Provider>
   );