diff --git a/ai-hub/app/api/routes/agent_update.py b/ai-hub/app/api/routes/agent_update.py
index b86d4a4..64b2165 100644
--- a/ai-hub/app/api/routes/agent_update.py
+++ b/ai-hub/app/api/routes/agent_update.py
@@ -22,9 +22,14 @@
 # Overridable via env var for flexibility in other deployments.
 _AGENT_NODE_DIR = os.environ.get(
     "AGENT_NODE_SRC_DIR",
-    os.path.join(os.path.dirname(__file__), "..", "..", "..", "agent-node-source")
+    "/app/agent-node-source"
+)
+_SKILLS_DIR = os.environ.get(
+    "SKILLS_SRC_DIR",
+    "/app/skills"
 )
 _AGENT_NODE_DIR = os.path.abspath(_AGENT_NODE_DIR)
+_SKILLS_DIR = os.path.abspath(_SKILLS_DIR)
 _VERSION_FILE = os.path.join(_AGENT_NODE_DIR, "VERSION")
 
 # Directories/files to exclude from the distributed tarball
@@ -63,20 +68,31 @@
 
 def _build_tarball() -> bytes:
     """
-    Builds an in-memory gzipped tarball of the agent-node directory.
-    The tarball root is 'agent-node/' so extraction is self-contained.
+    Builds an in-memory gzipped tarball of the agent-node and skills.
+    The tarball is flat (no agent-node-source/ prefix) so extraction is direct.
     """
     buf = io.BytesIO()
     with tarfile.open(fileobj=buf, mode="w:gz") as tar:
-        for root, dirs, files in os.walk(_AGENT_NODE_DIR):
-            # Prune excluded dirs in-place so os.walk doesn't descend into them
-            dirs[:] = [d for d in dirs if not _should_exclude(os.path.join(root, d))]
-
-            for filename in files:
-                abs_path = os.path.join(root, filename)
-                rel_path = os.path.relpath(abs_path, os.path.dirname(_AGENT_NODE_DIR))
-                if not _should_exclude(rel_path):
-                    tar.add(abs_path, arcname=rel_path)
+        # 1. Add agent-node files (Flat Root)
+        if os.path.exists(_AGENT_NODE_DIR):
+            for root, dirs, files in os.walk(_AGENT_NODE_DIR):
+                dirs[:] = [d for d in dirs if not _should_exclude(os.path.join(root, d))]
+                for filename in files:
+                    abs_path = os.path.join(root, filename)
+                    rel_path = os.path.relpath(abs_path, _AGENT_NODE_DIR)
+                    if not _should_exclude(rel_path):
+                        tar.add(abs_path, arcname=rel_path)
+        
+        # 2. Add skills directory (as 'skills/')
+        if os.path.exists(_SKILLS_DIR):
+            for root, dirs, files in os.walk(_SKILLS_DIR):
+                dirs[:] = [d for d in dirs if not _should_exclude(os.path.join(root, d))]
+                for filename in files:
+                    abs_path = os.path.join(root, filename)
+                    # Skills should be in a 'skills/' folder in the tarball
+                    rel_path = os.path.join("skills", os.path.relpath(abs_path, _SKILLS_DIR))
+                    if not _should_exclude(rel_path):
+                        tar.add(abs_path, arcname=rel_path)
 
     return buf.getvalue()