diff --git a/apps/web/src/components/editor/preview-panel.tsx b/apps/web/src/components/editor/preview-panel.tsx
index 0eee600..0669292 100644
--- a/apps/web/src/components/editor/preview-panel.tsx
+++ b/apps/web/src/components/editor/preview-panel.tsx
@@ -7,6 +7,7 @@ import {
 } from "@/stores/timeline-store";
 import { useMediaStore, type MediaItem } from "@/stores/media-store";
 import { usePlaybackStore } from "@/stores/playback-store";
+import { useEditorStore } from "@/stores/editor-store";
 import { VideoPlayer } from "@/components/ui/video-player";
 import { Button } from "@/components/ui/button";
 import { Play, Pause, Volume2, VolumeX, Plus } from "lucide-react";
@@ -22,7 +23,7 @@ export function PreviewPanel() {
   const { tracks } = useTimelineStore();
   const { mediaItems } = useMediaStore();
   const { currentTime, muted, toggleMute, volume } = usePlaybackStore();
-  const [canvasSize, setCanvasSize] = useState({ width: 1920, height: 1080 });
+  const { canvasSize, canvasPresets, setCanvasSize } = useEditorStore();
   const previewRef = useRef<HTMLDivElement>(null);
   const containerRef = useRef<HTMLDivElement>(null);
   const [previewDimensions, setPreviewDimensions] = useState({
@@ -183,15 +184,6 @@ export function PreviewPanel() {
     return null;
   };
 
-  // Canvas presets
-  const canvasPresets = [
-    { name: "16:9 HD", width: 1920, height: 1080 },
-    { name: "16:9 4K", width: 3840, height: 2160 },
-    { name: "9:16 Mobile", width: 1080, height: 1920 },
-    { name: "1:1 Square", width: 1080, height: 1080 },
-    { name: "4:3 Standard", width: 1440, height: 1080 },
-  ];
-
   return (
     <div className="h-full w-full flex flex-col min-h-0 min-w-0">
       {/* Controls */}
diff --git a/apps/web/src/stores/editor-store.ts b/apps/web/src/stores/editor-store.ts
index e8dd8e2..1ce870c 100644
--- a/apps/web/src/stores/editor-store.ts
+++ b/apps/web/src/stores/editor-store.ts
@@ -1,20 +1,72 @@
 import { create } from "zustand";
+import { CanvasSize, CanvasPreset } from "@/types/editor";
 
 interface EditorState {
   // Loading states
   isInitializing: boolean;
   isPanelsReady: boolean;
 
+  // Canvas/Project settings
+  canvasSize: CanvasSize;
+  canvasPresets: CanvasPreset[];
+
   // Actions
   setInitializing: (loading: boolean) => void;
   setPanelsReady: (ready: boolean) => void;
   initializeApp: () => Promise<void>;
+  setCanvasSize: (size: CanvasSize) => void;
+  setCanvasSizeFromAspectRatio: (aspectRatio: number) => void;
 }
 
+const DEFAULT_CANVAS_PRESETS: CanvasPreset[] = [
+  { name: "16:9 HD", width: 1920, height: 1080 },
+  { name: "16:9 4K", width: 3840, height: 2160 },
+  { name: "9:16 Mobile", width: 1080, height: 1920 },
+  { name: "1:1 Square", width: 1080, height: 1080 },
+  { name: "4:3 Standard", width: 1440, height: 1080 },
+];
+
+// Helper function to find the best matching canvas preset for an aspect ratio
+const findBestCanvasPreset = (aspectRatio: number): CanvasSize => {
+  // Calculate aspect ratio for each preset and find the closest match
+  let bestMatch = DEFAULT_CANVAS_PRESETS[0]; // Default to 16:9 HD
+  let smallestDifference = Math.abs(
+    aspectRatio - bestMatch.width / bestMatch.height
+  );
+
+  for (const preset of DEFAULT_CANVAS_PRESETS) {
+    const presetAspectRatio = preset.width / preset.height;
+    const difference = Math.abs(aspectRatio - presetAspectRatio);
+
+    if (difference < smallestDifference) {
+      smallestDifference = difference;
+      bestMatch = preset;
+    }
+  }
+
+  // If the difference is still significant (> 0.1), create a custom size
+  // based on the media aspect ratio with a reasonable resolution
+  const bestAspectRatio = bestMatch.width / bestMatch.height;
+  if (Math.abs(aspectRatio - bestAspectRatio) > 0.1) {
+    // Create custom dimensions based on the aspect ratio
+    if (aspectRatio > 1) {
+      // Landscape - use 1920 width
+      return { width: 1920, height: Math.round(1920 / aspectRatio) };
+    } else {
+      // Portrait or square - use 1080 height
+      return { width: Math.round(1080 * aspectRatio), height: 1080 };
+    }
+  }
+
+  return { width: bestMatch.width, height: bestMatch.height };
+};
+
 export const useEditorStore = create<EditorState>((set, get) => ({
   // Initial states
   isInitializing: true,
   isPanelsReady: false,
+  canvasSize: { width: 1920, height: 1080 }, // Default 16:9 HD
+  canvasPresets: DEFAULT_CANVAS_PRESETS,
 
   // Actions
   setInitializing: (loading) => {
@@ -32,4 +84,17 @@ export const useEditorStore = create<EditorState>((set, get) => ({
     set({ isPanelsReady: true, isInitializing: false });
     console.log("Video editor ready");
   },
+
+  setCanvasSize: (size) => {
+    set({ canvasSize: size });
+  },
+
+  setCanvasSizeFromAspectRatio: (aspectRatio) => {
+    const newCanvasSize = findBestCanvasPreset(aspectRatio);
+    console.log(
+      `Setting canvas size based on aspect ratio ${aspectRatio}:`,
+      newCanvasSize
+    );
+    set({ canvasSize: newCanvasSize });
+  },
 }));
diff --git a/apps/web/src/stores/timeline-store.ts b/apps/web/src/stores/timeline-store.ts
index 7362849..9f98b32 100644
--- a/apps/web/src/stores/timeline-store.ts
+++ b/apps/web/src/stores/timeline-store.ts
@@ -1,5 +1,8 @@
 import { create } from "zustand";
 import type { TrackType } from "@/types/timeline";
+import { useEditorStore } from "./editor-store";
+import { useMediaStore } from "./media-store";
+import { toast } from "sonner";
 
 // Helper function to manage clip naming with suffixes
 const getClipNameWithSuffix = (
@@ -199,6 +202,15 @@ export const useTimelineStore = create<TimelineStore>((set, get) => ({
 
   addClipToTrack: (trackId, clipData) => {
     get().pushHistory();
+
+    // Check if this is the first clip being added to the timeline
+    const currentState = get();
+    const totalClipsInTimeline = currentState.tracks.reduce(
+      (total, track) => total + track.clips.length,
+      0
+    );
+    const isFirstClip = totalClipsInTimeline === 0;
+
     const newClip: TimelineClip = {
       ...clipData,
       id: crypto.randomUUID(),
@@ -207,6 +219,23 @@ export const useTimelineStore = create<TimelineStore>((set, get) => ({
       trimEnd: 0,
     };
 
+    // If this is the first clip, automatically set the project canvas size
+    // to match the media's aspect ratio
+    if (isFirstClip && clipData.mediaId) {
+      const mediaStore = useMediaStore.getState();
+      const mediaItem = mediaStore.mediaItems.find(
+        (item) => item.id === clipData.mediaId
+      );
+
+      if (
+        mediaItem &&
+        (mediaItem.type === "image" || mediaItem.type === "video")
+      ) {
+        const editorStore = useEditorStore.getState();
+        editorStore.setCanvasSizeFromAspectRatio(mediaItem.aspectRatio);
+      }
+    }
+
     set((state) => ({
       tracks: state.tracks.map((track) =>
         track.id === trackId
diff --git a/apps/web/src/types/editor.ts b/apps/web/src/types/editor.ts
index bf1dae2..dce7ac5 100644
--- a/apps/web/src/types/editor.ts
+++ b/apps/web/src/types/editor.ts
@@ -1 +1,12 @@
 export type BackgroundType = "blur" | "mirror" | "color";
+
+export interface CanvasSize {
+  width: number;
+  height: number;
+}
+
+export interface CanvasPreset {
+  name: string;
+  width: number;
+  height: number;
+}