diff --git a/skills/setup.sh b/skills/setup.sh
index ec5512e8c5..c24706d718 100755
--- a/skills/setup.sh
+++ b/skills/setup.sh
@@ -1,10 +1,10 @@
 #!/bin/bash
 # Setup AI Skills for Prowler development
 # Configures AI coding assistants that follow agentskills.io standard:
-#   - Claude Code: .claude/skills/ symlink + CLAUDE.md copies
-#   - Gemini CLI: .gemini/skills/ symlink + GEMINI.md copies
+#   - Claude Code: .claude/skills/ symlink + CLAUDE.md symlink
+#   - Gemini CLI: .gemini/skills/ symlink + GEMINI.md symlink
 #   - Codex (OpenAI): .codex/skills/ symlink + AGENTS.md (native)
-#   - GitHub Copilot: .github/copilot-instructions.md copy
+#   - GitHub Copilot: .github/copilot-instructions.md symlink
 #
 # Usage:
 #   ./setup.sh              # Interactive mode (select AI assistants)
@@ -37,6 +37,28 @@ SETUP_COPILOT=false
 # HELPER FUNCTIONS
 # =============================================================================
 
+add_to_gitignore() {
+    local pattern="$1"
+    local gitignore_file="$REPO_ROOT/.gitignore"
+    local header="# AI Coding assistants assets"
+
+    # Create .gitignore if it doesn't exist
+    if [ ! -f "$gitignore_file" ]; then
+        touch "$gitignore_file"
+    fi
+
+    # Check if pattern exists (exact match or at end of file)
+    if ! grep -qxF "$pattern" "$gitignore_file"; then
+        # Check if header exists
+        if ! grep -qxF "$header" "$gitignore_file"; then
+            echo -e "\n\n$header" >> "$gitignore_file"
+        fi
+
+        echo "$pattern" >> "$gitignore_file"
+        echo -e "${GREEN}  ✓ Added $pattern to .gitignore${NC}"
+    fi
+}
+
 show_help() {
     echo "Usage: $0 [OPTIONS]"
     echo ""
@@ -109,6 +131,7 @@ setup_claude() {
     if [ ! -d "$REPO_ROOT/.claude" ]; then
         mkdir -p "$REPO_ROOT/.claude"
     fi
+    add_to_gitignore ".claude/skills"
 
     if [ -L "$target" ]; then
         rm "$target"
@@ -119,8 +142,9 @@ setup_claude() {
     ln -s "$SKILLS_SOURCE" "$target"
     echo -e "${GREEN}  ✓ .claude/skills -> skills/${NC}"
 
-    # Copy AGENTS.md to CLAUDE.md
-    copy_agents_md "CLAUDE.md"
+    # Link AGENTS.md to CLAUDE.md
+    link_agents_md "CLAUDE.md"
+    add_to_gitignore "CLAUDE.md"
 }
 
 setup_gemini() {
@@ -129,6 +153,7 @@ setup_gemini() {
     if [ ! -d "$REPO_ROOT/.gemini" ]; then
         mkdir -p "$REPO_ROOT/.gemini"
     fi
+    add_to_gitignore ".gemini/skills"
 
     if [ -L "$target" ]; then
         rm "$target"
@@ -139,8 +164,9 @@ setup_gemini() {
     ln -s "$SKILLS_SOURCE" "$target"
     echo -e "${GREEN}  ✓ .gemini/skills -> skills/${NC}"
 
-    # Copy AGENTS.md to GEMINI.md
-    copy_agents_md "GEMINI.md"
+    # Link AGENTS.md to GEMINI.md
+    link_agents_md "GEMINI.md"
+    add_to_gitignore "GEMINI.md"
 }
 
 setup_codex() {
@@ -149,6 +175,7 @@ setup_codex() {
     if [ ! -d "$REPO_ROOT/.codex" ]; then
         mkdir -p "$REPO_ROOT/.codex"
     fi
+    add_to_gitignore ".codex/skills"
 
     if [ -L "$target" ]; then
         rm "$target"
@@ -164,12 +191,19 @@ setup_codex() {
 setup_copilot() {
     if [ -f "$REPO_ROOT/AGENTS.md" ]; then
         mkdir -p "$REPO_ROOT/.github"
-        cp "$REPO_ROOT/AGENTS.md" "$REPO_ROOT/.github/copilot-instructions.md"
+
+        # Link AGENTS.md -> .github/copilot-instructions.md
+        local target="$REPO_ROOT/.github/copilot-instructions.md"
+        ln -sf "../AGENTS.md" "$target"
+
         echo -e "${GREEN}  ✓ AGENTS.md -> .github/copilot-instructions.md${NC}"
+
+        # Add specifically the file, NOT the .github folder
+        add_to_gitignore ".github/copilot-instructions.md"
     fi
 }
 
-copy_agents_md() {
+link_agents_md() {
     local target_name="$1"
     local agents_files
     local count=0
@@ -179,11 +213,15 @@ copy_agents_md() {
     for agents_file in $agents_files; do
         local agents_dir
         agents_dir=$(dirname "$agents_file")
-        cp "$agents_file" "$agents_dir/$target_name"
+
+        # Create relative symlink
+        # Since files are in same dir, we can just link to basename
+        (cd "$agents_dir" && ln -sf "$(basename "$agents_file")" "$target_name")
+
         count=$((count + 1))
     done
 
-    echo -e "${GREEN}  ✓ Copied $count AGENTS.md -> $target_name${NC}"
+    echo -e "${GREEN}  ✓ Linked $count AGENTS.md -> $target_name${NC}"
 }
 
 # =============================================================================
@@ -302,4 +340,4 @@ echo "Configured:"
 [ "$SETUP_COPILOT" = true ] && echo "  • GitHub Copilot: .github/copilot-instructions.md"
 echo ""
 echo -e "${BLUE}Note: Restart your AI assistant to load the skills.${NC}"
-echo -e "${BLUE}      AGENTS.md is the source of truth - edit it, then re-run this script.${NC}"
+echo -e "${BLUE}      AGENTS.md is the source of truth - changes are reflected automatically via symlinks.${NC}"
diff --git a/skills/setup_test.sh b/skills/setup_test.sh
index c0e80afe99..db4749ed3f 100755
--- a/skills/setup_test.sh
+++ b/skills/setup_test.sh
@@ -201,40 +201,40 @@ test_symlink_not_created_without_flag() {
 }
 
 # =============================================================================
-# TESTS: AGENTS.md COPYING
+# TESTS: AGENTS.md LINKING
 # =============================================================================
 
-test_copy_claude_agents_md() {
+test_link_claude_agents_md() {
     run_setup --claude > /dev/null
-    assert_file_exists "$TEST_DIR/CLAUDE.md" "Root CLAUDE.md should exist" && \
-    assert_file_exists "$TEST_DIR/api/CLAUDE.md" "api/CLAUDE.md should exist" && \
-    assert_file_exists "$TEST_DIR/ui/CLAUDE.md" "ui/CLAUDE.md should exist"
+    assert_symlink_exists "$TEST_DIR/CLAUDE.md" "Root CLAUDE.md should be a symlink" && \
+    assert_symlink_exists "$TEST_DIR/api/CLAUDE.md" "api/CLAUDE.md should be a symlink" && \
+    assert_symlink_exists "$TEST_DIR/ui/CLAUDE.md" "ui/CLAUDE.md should be a symlink"
 }
 
-test_copy_gemini_agents_md() {
+test_link_gemini_agents_md() {
     run_setup --gemini > /dev/null
-    assert_file_exists "$TEST_DIR/GEMINI.md" "Root GEMINI.md should exist" && \
-    assert_file_exists "$TEST_DIR/api/GEMINI.md" "api/GEMINI.md should exist" && \
-    assert_file_exists "$TEST_DIR/ui/GEMINI.md" "ui/GEMINI.md should exist"
+    assert_symlink_exists "$TEST_DIR/GEMINI.md" "Root GEMINI.md should be a symlink" && \
+    assert_symlink_exists "$TEST_DIR/api/GEMINI.md" "api/GEMINI.md should be a symlink" && \
+    assert_symlink_exists "$TEST_DIR/ui/GEMINI.md" "ui/GEMINI.md should be a symlink"
 }
 
-test_copy_copilot_to_github() {
+test_link_copilot_to_github() {
     run_setup --copilot > /dev/null
-    assert_file_exists "$TEST_DIR/.github/copilot-instructions.md" "Copilot instructions should exist"
+    assert_symlink_exists "$TEST_DIR/.github/copilot-instructions.md" "Copilot instructions should be a symlink"
 }
 
-test_copy_codex_no_extra_files() {
+test_link_codex_no_extra_files() {
     run_setup --codex > /dev/null
     assert_file_not_exists "$TEST_DIR/CODEX.md" "CODEX.md should not be created"
 }
 
-test_copy_not_created_without_flag() {
+test_link_not_created_without_flag() {
     run_setup --codex > /dev/null
-    assert_file_not_exists "$TEST_DIR/CLAUDE.md" "CLAUDE.md should not exist" && \
-    assert_file_not_exists "$TEST_DIR/GEMINI.md" "GEMINI.md should not exist"
+    assert_symlink_not_exists "$TEST_DIR/CLAUDE.md" "CLAUDE.md should not exist" && \
+    assert_symlink_not_exists "$TEST_DIR/GEMINI.md" "GEMINI.md should not exist"
 }
 
-test_copy_content_matches_source() {
+test_link_content_matches_source() {
     run_setup --claude > /dev/null
     local source_content target_content
     source_content=$(cat "$TEST_DIR/AGENTS.md")
@@ -272,7 +272,7 @@ test_idempotent_multiple_runs() {
     run_setup --claude > /dev/null
     run_setup --claude > /dev/null
     assert_symlink_exists "$TEST_DIR/.claude/skills" "Symlink should still exist after second run" && \
-    assert_file_exists "$TEST_DIR/CLAUDE.md" "CLAUDE.md should still exist after second run"
+    assert_symlink_exists "$TEST_DIR/CLAUDE.md" "CLAUDE.md should still be a symlink after second run"
 }
 
 # =============================================================================