diff --git a/.kiro/specs/raft-log-replication/tasks.md b/.kiro/specs/raft-log-replication/tasks.md
index 3849b06..28f461d 100644
--- a/.kiro/specs/raft-log-replication/tasks.md
+++ b/.kiro/specs/raft-log-replication/tasks.md
@@ -120,14 +120,14 @@
 
 ## 7. HandleAppendEntriesResponse — raft_on_append_entries_reply (raft.tla:393)
 
-- [ ] 7.1 RED: reply advance/decrement/stale-drop tests
+- [x] 7.1 RED: reply advance/decrement/stale-drop tests
   - Test: success sets `next_index[peer]=matchIndex+1`, `match_index[peer]=reply.matchIndex`; failure sets `next_index[peer]=Max(next_index[peer]-1,1)` (floor at 1), `match_index` unchanged; a reply with `reply_term != currentTerm` is ignored
   - Observable completion: tests compile and FAIL
   - _Requirements: 5.1, 5.2, 5.3_
   - _Boundary: test_raft.c_
   - _Depends: 2.2_
 
-- [ ] 7.2 GREEN: implement `raft_on_append_entries_reply`
+- [x] 7.2 GREEN: implement `raft_on_append_entries_reply`
   - Stale-term drop; success/failure branches; `next_index` floored at 1; do NOT recompute or advance any commit index from `match_index`
   - Observable completion: 7.1 tests pass
   - _Requirements: 5.1, 5.2, 5.3, 5.4_
diff --git a/src/lib/raft/raft.c b/src/lib/raft/raft.c
index 0b666f6..c45ed4c 100644
--- a/src/lib/raft/raft.c
+++ b/src/lib/raft/raft.c
@@ -677,3 +677,35 @@ int raft_on_append_entries_request(raft_state_t *s, int leader_idx,
         return RAFT_OK;
     }
 }
+
+int raft_on_append_entries_reply(raft_state_t *s, int peer_idx, int success,
+                                 uint64_t match_index, uint64_t reply_term)
+{
+    /* ---- Stale-term drop FIRST (raft.tla HandleAppendEntriesResponse 415, Req 5.4) ----
+     * The response is meaningful only if it pertains to the leader's current
+     * term (m.mterm == currentTerm[i]).  A reply carrying any other term — from
+     * an old in-flight RPC or a future leader — is discarded with no state
+     * change.  No commit index is ever advanced here (Req 5.4; owned by
+     * raft-commit-safety). */
+    if (reply_term != s->term)
+        return RAFT_OK;
+
+    if (success) {
+        /* success (raft.tla 397, Req 5.2): nextIndex'[peer] = m.mmatchIndex + 1,
+         * matchIndex'[peer] = m.mmatchIndex. */
+        s->match_index[peer_idx] = match_index;
+        s->next_index[peer_idx]  = match_index + 1;
+    } else {
+        /* failure (raft.tla 401, Req 5.3): nextIndex'[peer] =
+         * Max(nextIndex[peer] - 1, 1) — back off one index, floored at 1.
+         * matchIndex is left unchanged. */
+        uint64_t next = s->next_index[peer_idx];
+        s->next_index[peer_idx] = (next > 1) ? (next - 1) : 1;
+    }
+
+    if (s->cbs->on_trace)
+        s->cbs->on_trace(s->ctx, success ? "ae_reply_success" : "ae_reply_fail",
+                         NULL);
+
+    return RAFT_OK;
+}
diff --git a/src/lib/testsuite/test_raft.c b/src/lib/testsuite/test_raft.c
index 4ebd6a0..e30b37e 100644
--- a/src/lib/testsuite/test_raft.c
+++ b/src/lib/testsuite/test_raft.c
@@ -2488,6 +2488,111 @@ static void test_ae_req_leader_commit_not_acted(void)
     TEST_ASSERT_EQUAL_UINT64(1, s.log_len);
 }
 
+/* ---------- raft_on_append_entries_reply tests (task 7.1/7.2,
+ *            raft.tla HandleAppendEntriesResponse 393) ---------- */
+
+/*
+ * test_ae_reply_success_advances_indices (Req 5.1, 5.2)
+ *
+ * A success reply at the leader's current term must:
+ *   - set next_index[peer] = match_index + 1
+ *   - set match_index[peer] = match_index
+ *   - return RAFT_OK
+ * It must NOT advance any commit index (no commit field exists; not asserted here).
+ */
+static void test_ae_reply_success_advances_indices(void)
+{
+    raft_state_t     s;
+    raft_callbacks_t cbs = make_mock_cbs();
+
+    reset_mock();
+    /* restored log_len = 5; after drive_to_leader next_index[peer]=6, match_index[peer]=0 */
+    TEST_ASSERT_EQUAL_INT(0, init_node_log_len(&s, &cbs, 3, 0, 5));
+    drive_to_leader(&s);
+
+    /* peer 1 acknowledged up through index 4 */
+    int rc = raft_on_append_entries_reply(&s, /*peer_idx=*/1, /*success=*/1,
+                                          /*match_index=*/4, /*reply_term=*/s.term);
+
+    TEST_ASSERT_EQUAL_INT(RAFT_OK, rc);
+    TEST_ASSERT_EQUAL_UINT64(5, s.next_index[1]);   /* match_index + 1 */
+    TEST_ASSERT_EQUAL_UINT64(4, s.match_index[1]);  /* == match_index */
+}
+
+/*
+ * test_ae_reply_failure_decrements_next_index_floor (Req 5.1, 5.3)
+ *
+ * A failure reply at the leader's current term must:
+ *   - set next_index[peer] = Max(next_index[peer] - 1, 1)  (decrement, floored at 1)
+ *   - leave match_index[peer] unchanged
+ *   - stay at 1 when next_index[peer] is already 1 (verify the floor)
+ *   - return RAFT_OK
+ */
+static void test_ae_reply_failure_decrements_next_index_floor(void)
+{
+    raft_state_t     s;
+    raft_callbacks_t cbs = make_mock_cbs();
+
+    reset_mock();
+    /* restored log_len = 5 → next_index[peer] = 6 after drive_to_leader */
+    TEST_ASSERT_EQUAL_INT(0, init_node_log_len(&s, &cbs, 3, 0, 5));
+    drive_to_leader(&s);
+
+    /* seed a non-zero match_index to prove failure leaves it untouched */
+    s.match_index[1] = 3;
+
+    /* first failure: 6 → 5 */
+    int rc = raft_on_append_entries_reply(&s, /*peer_idx=*/1, /*success=*/0,
+                                          /*match_index=*/0, /*reply_term=*/s.term);
+    TEST_ASSERT_EQUAL_INT(RAFT_OK, rc);
+    TEST_ASSERT_EQUAL_UINT64(5, s.next_index[1]);
+    TEST_ASSERT_EQUAL_UINT64(3, s.match_index[1]);  /* unchanged */
+
+    /* drive next_index down to the floor */
+    s.next_index[1] = 1;
+    rc = raft_on_append_entries_reply(&s, /*peer_idx=*/1, /*success=*/0,
+                                      /*match_index=*/0, /*reply_term=*/s.term);
+    TEST_ASSERT_EQUAL_INT(RAFT_OK, rc);
+    TEST_ASSERT_EQUAL_UINT64(1, s.next_index[1]);   /* floored at 1, not 0 */
+    TEST_ASSERT_EQUAL_UINT64(3, s.match_index[1]);  /* still unchanged */
+}
+
+/*
+ * test_ae_reply_stale_term_ignored (Req 5.4, raft.tla 415)
+ *
+ * A reply whose reply_term != s->term is a stale-term drop: neither next_index
+ * nor match_index for the peer may change.  Returns RAFT_OK.
+ */
+static void test_ae_reply_stale_term_ignored(void)
+{
+    raft_state_t     s;
+    raft_callbacks_t cbs = make_mock_cbs();
+
+    reset_mock();
+    TEST_ASSERT_EQUAL_INT(0, init_node_log_len(&s, &cbs, 3, 0, 5));
+    drive_to_leader(&s);
+
+    /* snapshot current per-peer indices (next_index[1]=6, match_index[1]=0) */
+    uint64_t next_before  = s.next_index[1];
+    uint64_t match_before = s.match_index[1];
+
+    /* stale success reply (older term) must be ignored */
+    int rc = raft_on_append_entries_reply(&s, /*peer_idx=*/1, /*success=*/1,
+                                          /*match_index=*/9,
+                                          /*reply_term=*/s.term - 1);
+    TEST_ASSERT_EQUAL_INT(RAFT_OK, rc);
+    TEST_ASSERT_EQUAL_UINT64(next_before,  s.next_index[1]);
+    TEST_ASSERT_EQUAL_UINT64(match_before, s.match_index[1]);
+
+    /* stale failure reply (newer term, e.g. from a future leader) must also be ignored */
+    rc = raft_on_append_entries_reply(&s, /*peer_idx=*/1, /*success=*/0,
+                                      /*match_index=*/0,
+                                      /*reply_term=*/s.term + 1);
+    TEST_ASSERT_EQUAL_INT(RAFT_OK, rc);
+    TEST_ASSERT_EQUAL_UINT64(next_before,  s.next_index[1]);
+    TEST_ASSERT_EQUAL_UINT64(match_before, s.match_index[1]);
+}
+
 /* ---------- raft_on_election_timeout tests (task 3.5) ---------- */
 
 /*
@@ -5116,6 +5221,11 @@ void test_raft(void)
     RUN_TEST(test_ae_req_append_extends_log);
     RUN_TEST(test_ae_req_leader_commit_not_acted);
 
+    /* raft_on_append_entries_reply (task 7.1/7.2) */
+    RUN_TEST(test_ae_reply_success_advances_indices);
+    RUN_TEST(test_ae_reply_failure_decrements_next_index_floor);
+    RUN_TEST(test_ae_reply_stale_term_ignored);
+
     /* raft_on_vote_request (task 3.3) */
     RUN_TEST(test_vote_req_stale_term);
     RUN_TEST(test_vote_req_higher_term_updates_state);