diff --git a/components/l4d2-host-lib/src/l4d2host/instances.py b/components/l4d2-host-lib/src/l4d2host/instances.py
new file mode 100644
index 0000000..e3f1462
--- /dev/null
+++ b/components/l4d2-host-lib/src/l4d2host/instances.py
@@ -0,0 +1,46 @@
+from pathlib import Path
+from typing import Callable
+
+from l4d2host.spec import load_spec
+from l4d2host.systemd_user import daemon_reload, ensure_template_unit
+
+
+DEFAULT_ROOT = Path("/opt/l4d2")
+
+
+def initialize_instance(
+    name: str,
+    spec_path: Path,
+    *,
+    root: Path = DEFAULT_ROOT,
+    on_stdout: Callable[[str], None] | None = None,
+    on_stderr: Callable[[str], None] | None = None,
+    passthrough: bool = False,
+) -> None:
+    spec = load_spec(spec_path)
+
+    instance_dir = root / "instances" / name
+    runtime_dir = root / "runtime" / name
+    (runtime_dir / "upper").mkdir(parents=True, exist_ok=True)
+    (runtime_dir / "work").mkdir(parents=True, exist_ok=True)
+    (runtime_dir / "merged").mkdir(parents=True, exist_ok=True)
+    instance_dir.mkdir(parents=True, exist_ok=True)
+
+    lowerdirs = [str(root / "overlays" / overlay) for overlay in spec.overlays]
+    lowerdirs.append(str(root / "installation"))
+
+    instance_env = "\n".join(
+        [
+            f"L4D2_PORT={spec.port}",
+            f"L4D2_ARGS={' '.join(spec.arguments)}",
+            f"L4D2_LOWERDIRS={':'.join(lowerdirs)}",
+        ]
+    ) + "\n"
+    (instance_dir / "instance.env").write_text(instance_env)
+
+    server_cfg = "\n".join(spec.config) if spec.config else ""
+    (instance_dir / "server.cfg").write_text(server_cfg)
+
+    if root.resolve() == DEFAULT_ROOT:
+        ensure_template_unit()
+        daemon_reload(on_stdout=on_stdout, on_stderr=on_stderr, passthrough=passthrough)
diff --git a/components/l4d2-host-lib/src/l4d2host/systemd_user.py b/components/l4d2-host-lib/src/l4d2host/systemd_user.py
new file mode 100644
index 0000000..5eeec2d
--- /dev/null
+++ b/components/l4d2-host-lib/src/l4d2host/systemd_user.py
@@ -0,0 +1,29 @@
+from importlib import resources
+from pathlib import Path
+from typing import Callable
+
+from l4d2host.process import run_command
+
+
+def ensure_template_unit(target_dir: Path | None = None) -> Path:
+    if target_dir is None:
+        target_dir = Path.home() / ".config/systemd/user"
+    target_dir.mkdir(parents=True, exist_ok=True)
+    target_file = target_dir / "l4d2@.service"
+    body = resources.files("l4d2host.templates").joinpath("l4d2@.service").read_text()
+    target_file.write_text(body)
+    return target_file
+
+
+def daemon_reload(
+    *,
+    on_stdout: Callable[[str], None] | None = None,
+    on_stderr: Callable[[str], None] | None = None,
+    passthrough: bool = False,
+) -> None:
+    run_command(
+        ["systemctl", "--user", "daemon-reload"],
+        on_stdout=on_stdout,
+        on_stderr=on_stderr,
+        passthrough=passthrough,
+    )
diff --git a/components/l4d2-host-lib/src/l4d2host/templates/__init__.py b/components/l4d2-host-lib/src/l4d2host/templates/__init__.py
new file mode 100644
index 0000000..e69de29
diff --git a/components/l4d2-host-lib/src/l4d2host/templates/l4d2@.service b/components/l4d2-host-lib/src/l4d2host/templates/l4d2@.service
new file mode 100644
index 0000000..2ea66cf
--- /dev/null
+++ b/components/l4d2-host-lib/src/l4d2host/templates/l4d2@.service
@@ -0,0 +1,14 @@
+[Unit]
+Description=L4D2 dedicated server instance %i
+After=network.target
+
+[Service]
+Type=simple
+EnvironmentFile=/opt/l4d2/instances/%i/instance.env
+WorkingDirectory=/opt/l4d2/runtime/%i/merged/left4dead2
+ExecStart=/opt/l4d2/installation/srcds_run -game left4dead2 +hostport ${L4D2_PORT} ${L4D2_ARGS}
+Restart=on-failure
+RestartSec=5
+
+[Install]
+WantedBy=default.target
diff --git a/components/l4d2-host-lib/tests/test_initialize.py b/components/l4d2-host-lib/tests/test_initialize.py
new file mode 100644
index 0000000..144edae
--- /dev/null
+++ b/components/l4d2-host-lib/tests/test_initialize.py
@@ -0,0 +1,22 @@
+from pathlib import Path
+
+from l4d2host.instances import initialize_instance
+
+
+def test_initialize_writes_files(tmp_path: Path) -> None:
+    spec = tmp_path / "spec.yaml"
+    spec.write_text("port: 27015\noverlays: [a,b]\nconfig: ['sv_consistency 1']\n")
+
+    initialize_instance("alpha", spec, root=tmp_path)
+
+    assert (tmp_path / "instances/alpha/instance.env").exists()
+    assert (tmp_path / "instances/alpha/server.cfg").exists()
+
+
+def test_empty_config_writes_empty_server_cfg(tmp_path: Path) -> None:
+    spec = tmp_path / "spec.yaml"
+    spec.write_text("port: 27015\n")
+
+    initialize_instance("alpha", spec, root=tmp_path)
+
+    assert (tmp_path / "instances/alpha/server.cfg").read_text() == ""