diff --git a/crates/bin/src/cli.rs b/crates/bin/src/cli.rs
index 31c6c37..7d7c1cb 100644
--- a/crates/bin/src/cli.rs
+++ b/crates/bin/src/cli.rs
@@ -2,7 +2,7 @@ use std::{fs, path::PathBuf};
 
 use clap::Parser;
 use exporters::McFunctionExporter;
-use lib::{BlockPalette, StructureExporter, TextBuilder, TtfFont};
+use lib::{BlockPalette, OutlineMode, StructureExporter, TextBuilder, TtfFont};
 
 #[derive(Parser, Debug)]
 #[command(author, version, about, long_about = None)]
@@ -38,6 +38,30 @@ struct Cli {
     /// Height of the text in blocks
     #[arg(long, default_value_t = 16.0)]
     size: f32,
+
+    /// Generate a drop shadow
+    #[arg(long)]
+    shadow: bool,
+
+    /// Shadow X offset in blocks (positive = right)
+    #[arg(long, default_value_t = 1)]
+    shadow_x: i32,
+
+    /// Shadow Y offset in blocks (negative = down)
+    #[arg(long, default_value_t = -1)]
+    shadow_y: i32,
+
+    /// Outline connectivity: 4 (cardinal only) or 8 (includes corners)
+    #[arg(long, default_value_t = 8, value_parser = clap::value_parser!(u8).range(4..=8))]
+    outline_mode: u8,
+
+    /// Extra blocks between each character (overrides font default)
+    #[arg(long)]
+    letter_spacing: Option<u32>,
+
+    /// Width in blocks inserted for a space character
+    #[arg(long, default_value_t = 4)]
+    word_spacing: u32,
 }
 
 fn palettes_dir() -> PathBuf {
@@ -93,7 +117,20 @@ pub fn run() -> anyhow::Result<()> {
     let font = TtfFont::from_bytes(&font_bytes, cli.size).map_err(|e| anyhow::anyhow!(e))?;
 
     tracing::info!("generating voxel grid for text: '{}'", text);
-    let builder = TextBuilder::new(&font).with_depth(cli.depth);
+    let outline_mode = if cli.outline_mode == 4 {
+        OutlineMode::FourConnected
+    } else {
+        OutlineMode::EightConnected
+    };
+    let mut builder = TextBuilder::new(&font)
+        .with_depth(cli.depth)
+        .with_shadow(cli.shadow)
+        .with_shadow_offset(cli.shadow_x, cli.shadow_y)
+        .with_outline_mode(outline_mode)
+        .with_word_spacing(cli.word_spacing);
+    if let Some(ls) = cli.letter_spacing {
+        builder = builder.with_letter_spacing(ls);
+    }
     let grid = builder.generate(&text);
 
     tracing::info!(
diff --git a/crates/lib/src/engine.rs b/crates/lib/src/engine.rs
index 674c6b2..f334b7d 100644
--- a/crates/lib/src/engine.rs
+++ b/crates/lib/src/engine.rs
@@ -1,10 +1,25 @@
-use crate::{font::FontProvider, grid::VoxelGrid, models::VoxelType};
+use crate::{font::{FontProvider, Glyph}, grid::VoxelGrid, models::VoxelType};
+
+enum GlyphToken {
+    Char(Glyph),
+    Space(u32),
+}
+
+pub enum OutlineMode {
+    FourConnected,
+    EightConnected,
+}
 
 pub struct GenerationOptions {
     pub extrusion_depth: u32,
     pub generate_outline: bool,
-    // Future options can be added here, such as:
-    // shadow, scale, italics, etc.
+    pub outline_mode: OutlineMode,
+    pub generate_shadow: bool,
+    pub shadow_offset: (i32, i32),
+    /// Overrides the font's default letter spacing (None = use font default).
+    pub letter_spacing: Option<u32>,
+    /// Width in blocks inserted for a space character.
+    pub word_spacing: u32,
 }
 
 impl Default for GenerationOptions {
@@ -12,6 +27,11 @@ impl Default for GenerationOptions {
         Self {
             extrusion_depth: 1,
             generate_outline: true,
+            outline_mode: OutlineMode::EightConnected,
+            generate_shadow: false,
+            shadow_offset: (1, -1),
+            letter_spacing: None,
+            word_spacing: 4,
         }
     }
 }
@@ -39,53 +59,162 @@ impl<'a> TextBuilder<'a> {
         self
     }
 
+    pub fn with_outline_mode(mut self, mode: OutlineMode) -> Self {
+        self.options.outline_mode = mode;
+        self
+    }
+
+    pub fn with_shadow(mut self, generate: bool) -> Self {
+        self.options.generate_shadow = generate;
+        self
+    }
+
+    pub fn with_shadow_offset(mut self, dx: i32, dy: i32) -> Self {
+        self.options.shadow_offset = (dx, dy);
+        self
+    }
+
+    pub fn with_letter_spacing(mut self, spacing: u32) -> Self {
+        self.options.letter_spacing = Some(spacing);
+        self
+    }
+
+    pub fn with_word_spacing(mut self, spacing: u32) -> Self {
+        self.options.word_spacing = spacing;
+        self
+    }
+
     pub fn generate(&self, text: &str) -> VoxelGrid {
+        let (tokens, text_width, max_height) = self.collect_glyphs(text);
+        let (base_x, base_y, grid_w, grid_h) = self.compute_layout(text_width, max_height);
+        let mut grid = VoxelGrid::new(grid_w, grid_h, self.options.extrusion_depth);
+        self.place_glyphs(&mut grid, &tokens, base_x, base_y);
+        if self.options.generate_shadow {
+            self.apply_shadow(&mut grid);
+        }
+        if self.options.generate_outline {
+            self.apply_outline(&mut grid);
+        }
+        grid
+    }
+
+    fn effective_letter_spacing(&self) -> u32 {
+        self.options.letter_spacing.unwrap_or_else(|| self.font.letter_spacing())
+    }
+
+    fn collect_glyphs(&self, text: &str) -> (Vec<GlyphToken>, u32, u32) {
+        let letter_spacing = self.effective_letter_spacing();
         let mut total_width = 0;
         let mut max_height = 0;
-        let mut glyphs_to_render = Vec::new();
-
+        let mut tokens = Vec::new();
         for c in text.chars() {
-            if let Some(glyph) = self.font.get_glyph(c) {
-                total_width += glyph.width + self.font.letter_spacing();
+            if c == ' ' {
+                total_width += self.options.word_spacing;
+                tokens.push(GlyphToken::Space(self.options.word_spacing));
+            } else if let Some(glyph) = self.font.get_glyph(c) {
+                total_width += glyph.width + letter_spacing;
                 max_height = max_height.max(glyph.height);
-                glyphs_to_render.push(glyph);
+                tokens.push(GlyphToken::Char(glyph));
             }
         }
+        (tokens, total_width, max_height)
+    }
 
-        let padding = if self.options.generate_outline { 2 } else { 0 };
+    fn compute_layout(&self, text_width: u32, max_height: u32) -> (u32, u32, u32, u32) {
+        let outline_pad = if self.options.generate_outline { 1u32 } else { 0 };
+        let (sdx, sdy) = self.options.shadow_offset;
+        let shadow_x_extra = if self.options.generate_shadow { sdx.max(0) as u32 } else { 0 };
+        let shadow_y_extra = if self.options.generate_shadow { (-sdy).max(0) as u32 } else { 0 };
 
-        let mut grid = VoxelGrid::new(
-            total_width + padding,
-            max_height + padding,
-            self.options.extrusion_depth,
-        );
+        let grid_w = text_width + outline_pad * 2 + shadow_x_extra;
+        let grid_h = max_height + outline_pad * 2 + shadow_y_extra;
+        let base_x = outline_pad;
+        let base_y = outline_pad + shadow_y_extra;
 
-        let mut current_x = if self.options.generate_outline { 1 } else { 0 };
-        let base_y = if self.options.generate_outline { 1 } else { 0 };
+        (base_x, base_y, grid_w, grid_h)
+    }
 
-        for glyph in glyphs_to_render {
-            for gy in 0..glyph.height {
-                for gx in 0..glyph.width {
-                    let glyph_index = (gy * glyph.width + gx) as usize;
+    fn place_glyphs(&self, grid: &mut VoxelGrid, tokens: &[GlyphToken], base_x: u32, base_y: u32) {
+        let letter_spacing = self.effective_letter_spacing();
+        let mut current_x = base_x;
+        for token in tokens {
+            match token {
+                GlyphToken::Space(w) => current_x += w,
+                GlyphToken::Char(glyph) => {
+                    for gy in 0..glyph.height {
+                        for gx in 0..glyph.width {
+                            if glyph.data[(gy * glyph.width + gx) as usize] {
+                                let wx = current_x + gx;
+                                let wy = base_y + (glyph.height - 1 - gy); // flip vertically
+                                for z in 0..self.options.extrusion_depth {
+                                    if let Err(e) = grid.set(wx, wy, z, VoxelType::Body) {
+                                        tracing::warn!("failed to set voxel: {}", e);
+                                    }
+                                }
+                            }
+                        }
+                    }
+                    current_x += glyph.width + letter_spacing;
+                }
+            }
+        }
+    }
 
-                    if glyph.data[glyph_index] {
-                        let world_x = current_x + gx;
-                        let world_y = base_y + (glyph.height - 1 - gy); // Flip vertically
+    fn apply_shadow(&self, grid: &mut VoxelGrid) {
+        let (dx, dy) = self.options.shadow_offset;
+        let (w, h, d) = (grid.width, grid.height, grid.depth);
+        let body_positions: Vec<(u32, u32, u32)> = (0..w)
+            .flat_map(|x| (0..h).flat_map(move |y| (0..d).map(move |z| (x, y, z))))
+            .filter(|&(x, y, z)| grid.get(x, y, z) == Some(VoxelType::Body))
+            .collect();
 
-                        for z in 0..self.options.extrusion_depth {
-                            if let Err(e) = grid.set(world_x, world_y, z, VoxelType::Body) {
-                                tracing::warn!("failed to set voxel: {}", e);
+        for (x, y, z) in body_positions {
+            let sx = x as i32 + dx;
+            let sy = y as i32 + dy;
+            if sx >= 0 && sy >= 0 {
+                let (sx, sy) = (sx as u32, sy as u32);
+                if grid.get(sx, sy, z).is_none() {
+                    if let Err(e) = grid.set(sx, sy, z, VoxelType::Shadow) {
+                        tracing::warn!("failed to set shadow voxel: {}", e);
+                    }
+                }
+            }
+        }
+    }
+
+    fn apply_outline(&self, grid: &mut VoxelGrid) {
+        let (w, h, d) = (grid.width, grid.height, grid.depth);
+        let body_xy: Vec<(u32, u32)> = (0..w)
+            .flat_map(|x| (0..h).map(move |y| (x, y)))
+            .filter(|&(x, y)| (0..d).any(|z| grid.get(x, y, z) == Some(VoxelType::Body)))
+            .collect();
+
+        for (x, y) in body_xy {
+            for (ox, oy) in Self::neighbor_offsets(&self.options.outline_mode) {
+                let nx = x as i32 + ox;
+                let ny = y as i32 + oy;
+                if nx >= 0 && ny >= 0 {
+                    let (nx, ny) = (nx as u32, ny as u32);
+                    for z in 0..d {
+                        if grid.get(nx, ny, z) != Some(VoxelType::Body) {
+                            if let Err(e) = grid.set(nx, ny, z, VoxelType::Outline) {
+                                tracing::warn!("failed to set outline voxel: {}", e);
                             }
                         }
                     }
                 }
             }
-
-            current_x += glyph.width + self.font.letter_spacing();
         }
+    }
 
-        // TODO: Add outline generation logic here if self.options.generate_outline is true.
-
-        grid
+    fn neighbor_offsets(mode: &OutlineMode) -> &'static [(i32, i32)] {
+        match mode {
+            OutlineMode::FourConnected => &[(-1, 0), (1, 0), (0, -1), (0, 1)],
+            OutlineMode::EightConnected => &[
+                (-1, -1), (0, -1), (1, -1),
+                (-1,  0),          (1,  0),
+                (-1,  1), (0,  1), (1,  1),
+            ],
+        }
     }
 }
diff --git a/crates/lib/src/lib.rs b/crates/lib/src/lib.rs
index 0dffd7b..e531707 100644
--- a/crates/lib/src/lib.rs
+++ b/crates/lib/src/lib.rs
@@ -6,7 +6,7 @@ mod grid;
 mod models;
 mod palette;
 
-pub use engine::{GenerationOptions, TextBuilder};
+pub use engine::{GenerationOptions, OutlineMode, TextBuilder};
 pub use error::{FontError, VoxelError};
 pub use font::FontProvider;
 pub use fonts::ttf_font::TtfFont;