diff --git a/src/systems/VillagerSystem.ts b/src/systems/VillagerSystem.ts
index 609d00d..b008257 100644
--- a/src/systems/VillagerSystem.ts
+++ b/src/systems/VillagerSystem.ts
@@ -125,8 +125,11 @@ export class VillagerSystem {
     const worldDepth = Math.floor(v.y / TILE_SIZE) + 5
     rt.sprite.setPosition(v.x, v.y).setDepth(worldDepth)
 
-    // Outline sprite mirrors position, flip, and angle so the silhouette matches exactly
-    rt.outlineSprite.setPosition(v.x, v.y).setFlipX(rt.sprite.flipX).setAngle(rt.sprite.angle)
+    // Show outline only when a world object below the Nisse would occlude them
+    const tileX = Math.floor(v.x / TILE_SIZE)
+    const tileY = Math.floor(v.y / TILE_SIZE)
+    const occluded = this.isOccluded(tileX, tileY)
+    rt.outlineSprite.setPosition(v.x, v.y).setFlipX(rt.sprite.flipX).setAngle(rt.sprite.angle).setVisible(occluded)
 
     rt.nameLabel.setPosition(v.x, v.y - 22)
     rt.energyBar.setPosition(0, 0)
@@ -583,13 +586,14 @@ export class VillagerSystem {
    * @param v - Villager state to create sprites for
    */
   private spawnSprite(v: VillagerState): void {
-    // Silhouette rendered above all world objects so the Nisse is visible even
-    // when occluded by a tree or building.
+    // Silhouette: same texture, white fill, fixed high depth so it shows through
+    // trees and buildings. Visibility is toggled per frame by isOccluded().
     const outlineSprite = this.scene.add.image(v.x, v.y, 'villager')
-      .setScale(1.3)
-      .setTintFill(0xffffff)
-      .setAlpha(0.7)
+      .setScale(1.1)
+      .setTintFill(0xaaddff)
+      .setAlpha(0.85)
       .setDepth(900)
+      .setVisible(false)
 
     // Main sprite depth is updated every frame based on Y position.
     const sprite = this.scene.add.image(v.x, v.y, 'villager')
@@ -640,6 +644,27 @@ export class VillagerSystem {
     if (rt.workLog.length > WORK_LOG_MAX) rt.workLog.length = WORK_LOG_MAX
   }
 
+  // ─── Occlusion check ──────────────────────────────────────────────────────
+
+  /**
+   * Returns true if a world object (tree, rock, or building) with a higher tileY
+   * than the Nisse exists on the same column, meaning the Nisse is visually
+   * behind that object. Checks 1–3 tiles below to account for tall tree canopies.
+   * @param tileX - Nisse's current tile column
+   * @param tileY - Nisse's current tile row
+   */
+  private isOccluded(tileX: number, tileY: number): boolean {
+    const state = stateManager.getState()
+    for (let dy = 1; dy <= 3; dy++) {
+      const checkY = tileY + dy
+      if (this.worldSystem.hasResourceAt(tileX, checkY)) return true
+      if (Object.values(state.world.buildings).some(
+        b => b.tileX === tileX && b.tileY === checkY && b.kind !== 'stockpile_zone'
+      )) return true
+    }
+    return false
+  }
+
   // ─── Public API ───────────────────────────────────────────────────────────
 
   /**
diff --git a/src/systems/WorldSystem.ts b/src/systems/WorldSystem.ts
index 6c33d1b..5de1ca6 100644
--- a/src/systems/WorldSystem.ts
+++ b/src/systems/WorldSystem.ts
@@ -172,6 +172,16 @@ export class WorldSystem {
     this.resourceTiles.delete(tileY * WORLD_TILES + tileX)
   }
 
+  /**
+   * Returns true if a resource (tree or rock) occupies the given tile.
+   * Uses the O(1) resourceTiles index.
+   * @param tileX - Tile column
+   * @param tileY - Tile row
+   */
+  hasResourceAt(tileX: number, tileY: number): boolean {
+    return this.resourceTiles.has(tileY * WORLD_TILES + tileX)
+  }
+
   /**
    * Converts world pixel coordinates to tile coordinates.
    * @param worldX - World X in pixels