diff --git a/nextcloud_mcp_server/vector/document_chunker.py b/nextcloud_mcp_server/vector/document_chunker.py
index 5855154..7c18987 100644
--- a/nextcloud_mcp_server/vector/document_chunker.py
+++ b/nextcloud_mcp_server/vector/document_chunker.py
@@ -1,10 +1,21 @@
 """Document chunking for large texts."""
 
 import logging
+import re
+from dataclasses import dataclass
 
 logger = logging.getLogger(__name__)
 
 
+@dataclass
+class ChunkWithPosition:
+    """A text chunk with its character position in the original document."""
+
+    text: str
+    start_offset: int  # Character position where chunk starts
+    end_offset: int  # Character position where chunk ends (exclusive)
+
+
 class DocumentChunker:
     """Chunk large documents for optimal embedding."""
 
@@ -19,33 +30,66 @@ class DocumentChunker:
         self.chunk_size = chunk_size
         self.overlap = overlap
 
-    def chunk_text(self, content: str) -> list[str]:
+    def chunk_text(self, content: str) -> list[ChunkWithPosition]:
         """
-        Split text into overlapping chunks.
+        Split text into overlapping chunks with position tracking.
 
         Uses simple word-based chunking with configurable overlap to preserve
-        context across chunk boundaries.
+        context across chunk boundaries. Tracks character positions for each chunk.
 
         Args:
             content: Text content to chunk
 
         Returns:
-            List of text chunks (may be single item if content is small)
+            List of chunks with their character positions in the original content
         """
-        # Simple word-based chunking
-        words = content.split()
+        # Use regex to find all words and their positions
+        # This preserves the original spacing and allows accurate position tracking
+        word_pattern = re.compile(r"\S+")
+        word_matches = list(word_pattern.finditer(content))
 
-        if len(words) <= self.chunk_size:
-            return [content]
+        if len(word_matches) <= self.chunk_size:
+            # Single chunk - use entire content
+            return [
+                ChunkWithPosition(text=content, start_offset=0, end_offset=len(content))
+            ]
 
         chunks = []
-        start = 0
+        start_idx = 0
 
-        while start < len(words):
-            end = start + self.chunk_size
-            chunk_words = words[start:end]
-            chunks.append(" ".join(chunk_words))
-            start = end - self.overlap
+        while start_idx < len(word_matches):
+            end_idx = min(start_idx + self.chunk_size, len(word_matches))
 
-        logger.debug(f"Chunked document into {len(chunks)} chunks ({len(words)} words)")
+            # Get the first and last word positions
+            first_word = word_matches[start_idx]
+            last_word = word_matches[end_idx - 1]
+
+            # Extract chunk using character positions
+            start_offset = first_word.start()
+            end_offset = last_word.end()
+            chunk_text = content[start_offset:end_offset]
+
+            chunks.append(
+                ChunkWithPosition(
+                    text=chunk_text, start_offset=start_offset, end_offset=end_offset
+                )
+            )
+
+            # If we've reached the end, break
+            if end_idx >= len(word_matches):
+                break
+
+            # Move to next chunk with overlap
+            next_start_idx = end_idx - self.overlap
+
+            # Safety check: ensure we're making forward progress
+            # If we're not advancing (overlap >= chunk processed), break to prevent infinite loop
+            if next_start_idx <= start_idx:
+                break
+
+            start_idx = next_start_idx
+
+        logger.debug(
+            f"Chunked document into {len(chunks)} chunks ({len(word_matches)} words)"
+        )
         return chunks
diff --git a/tests/unit/test_document_chunker.py b/tests/unit/test_document_chunker.py
new file mode 100644
index 0000000..3b46ab5
--- /dev/null
+++ b/tests/unit/test_document_chunker.py
@@ -0,0 +1,190 @@
+"""Unit tests for DocumentChunker with position tracking."""
+
+from nextcloud_mcp_server.vector.document_chunker import (
+    ChunkWithPosition,
+    DocumentChunker,
+)
+
+
+class TestDocumentChunkerPositions:
+    """Test suite for DocumentChunker position tracking functionality."""
+
+    def test_single_chunk_simple_text(self):
+        """Test that single-chunk documents return correct positions."""
+        chunker = DocumentChunker(chunk_size=512, overlap=50)
+        content = "This is a short document."
+
+        chunks = chunker.chunk_text(content)
+
+        assert len(chunks) == 1
+        assert isinstance(chunks[0], ChunkWithPosition)
+        assert chunks[0].text == content
+        assert chunks[0].start_offset == 0
+        assert chunks[0].end_offset == len(content)
+
+    def test_multiple_chunks_positions(self):
+        """Test that multi-chunk documents have correct positions."""
+        chunker = DocumentChunker(chunk_size=10, overlap=2)  # Small chunks for testing
+        # Create content with exactly 30 words
+        words = [f"word{i:02d}" for i in range(30)]
+        content = " ".join(words)
+
+        chunks = chunker.chunk_text(content)
+
+        # Verify we got multiple chunks (30 words, 10 per chunk, 2 overlap = 4 chunks)
+        assert len(chunks) == 4
+
+        # Verify all chunks are ChunkWithPosition
+        for chunk in chunks:
+            assert isinstance(chunk, ChunkWithPosition)
+
+        # Verify first chunk starts at 0
+        assert chunks[0].start_offset == 0
+
+        # Verify last chunk ends at content length
+        assert chunks[-1].end_offset == len(content)
+
+        # Verify chunks are contiguous or overlap (no gaps)
+        for i in range(len(chunks) - 1):
+            # Next chunk should start at or before current chunk ends
+            assert chunks[i + 1].start_offset <= chunks[i].end_offset
+
+        # Verify we can reconstruct the content using positions
+        for chunk in chunks:
+            extracted = content[chunk.start_offset : chunk.end_offset]
+            assert extracted == chunk.text
+
+    def test_chunk_positions_with_whitespace(self):
+        """Test position tracking with various whitespace."""
+        chunker = DocumentChunker(chunk_size=5, overlap=1)
+        content = "word1  word2\n\nword3\tword4    word5 word6"
+
+        chunks = chunker.chunk_text(content)
+
+        # Verify positions correctly handle whitespace
+        for chunk in chunks:
+            extracted = content[chunk.start_offset : chunk.end_offset]
+            assert extracted == chunk.text
+            # Verify no leading/trailing whitespace unless in original
+            if chunk != chunks[0] and chunk != chunks[-1]:
+                # Middle chunks should be extracted correctly
+                assert len(chunk.text.strip()) > 0
+
+    def test_empty_content(self):
+        """Test that empty content returns empty chunk."""
+        chunker = DocumentChunker(chunk_size=512, overlap=50)
+        content = ""
+
+        chunks = chunker.chunk_text(content)
+
+        assert len(chunks) == 1
+        assert chunks[0].text == ""
+        assert chunks[0].start_offset == 0
+        assert chunks[0].end_offset == 0
+
+    def test_chunk_overlap_positions(self):
+        """Test that overlapping chunks have correct positions."""
+        chunker = DocumentChunker(chunk_size=10, overlap=3)
+        words = [f"word{i:02d}" for i in range(25)]
+        content = " ".join(words)
+
+        chunks = chunker.chunk_text(content)
+
+        # Verify overlap exists
+        for i in range(len(chunks) - 1):
+            current_chunk = chunks[i]
+            next_chunk = chunks[i + 1]
+
+            # Next chunk should start before current ends (overlap)
+            # This happens because we move back by overlap words
+            # The actual character overlap depends on word lengths
+            assert next_chunk.start_offset >= 0
+            assert current_chunk.end_offset <= len(content)
+
+    def test_unicode_content_positions(self):
+        """Test position tracking with Unicode characters."""
+        chunker = DocumentChunker(chunk_size=10, overlap=2)
+        content = "Hello 世界 こんにちは мир Привет שלום مرحبا 你好"
+
+        chunks = chunker.chunk_text(content)
+
+        # Verify all chunks extract correctly
+        for chunk in chunks:
+            extracted = content[chunk.start_offset : chunk.end_offset]
+            assert extracted == chunk.text
+
+        # Verify full coverage
+        if len(chunks) == 1:
+            assert chunks[0].start_offset == 0
+            assert chunks[0].end_offset == len(content)
+
+    def test_single_word_chunks(self):
+        """Test position tracking with single-word chunks."""
+        chunker = DocumentChunker(chunk_size=1, overlap=0)
+        content = "one two three"
+
+        chunks = chunker.chunk_text(content)
+
+        assert len(chunks) == 3
+        assert chunks[0].text == "one"
+        assert chunks[1].text == "two"
+        assert chunks[2].text == "three"
+
+        # Verify positions
+        assert content[chunks[0].start_offset : chunks[0].end_offset] == "one"
+        assert content[chunks[1].start_offset : chunks[1].end_offset] == "two"
+        assert content[chunks[2].start_offset : chunks[2].end_offset] == "three"
+
+    def test_realistic_note_content(self):
+        """Test with realistic note content similar to Nextcloud Notes."""
+        chunker = DocumentChunker(chunk_size=50, overlap=10)
+        content = """My Project Notes
+
+This is a note about my project. It contains several paragraphs of text
+that should be chunked appropriately for embedding.
+
+## Key Points
+
+- First important point with some details
+- Second point that needs to be remembered
+- Third point for future reference
+
+The document continues with more content here. We want to make sure that
+the chunking preserves context across boundaries while maintaining proper
+position tracking for each chunk.
+
+This allows us to highlight the exact chunk that matched a search query,
+which builds trust in the RAG system."""
+
+        chunks = chunker.chunk_text(content)
+
+        # Should have multiple chunks
+        assert len(chunks) > 1
+
+        # Verify all chunks
+        for chunk in chunks:
+            assert isinstance(chunk, ChunkWithPosition)
+            # Verify extraction
+            extracted = content[chunk.start_offset : chunk.end_offset]
+            assert extracted == chunk.text
+            # Verify positions are valid
+            assert chunk.start_offset >= 0
+            assert chunk.end_offset <= len(content)
+            assert chunk.start_offset < chunk.end_offset
+
+    def test_chunk_boundaries(self):
+        """Test that chunk boundaries are word-aligned."""
+        chunker = DocumentChunker(chunk_size=10, overlap=2)
+        words = [f"word{i:02d}" for i in range(30)]
+        content = " ".join(words)
+
+        chunks = chunker.chunk_text(content)
+
+        for chunk in chunks:
+            # Verify chunk text starts and ends with word characters (no split words)
+            # Unless it's the full content
+            if len(chunks) > 1:
+                # Each chunk should start with a word (not whitespace)
+                assert chunk.text[0].strip() != ""
+                # Each chunk should end with a word (not whitespace)
+                assert chunk.text[-1].strip() != ""