diff --git a/docs/core/policy-engine.md b/docs/core/policy-engine.md
index 54da64fcf1..352c34be99 100644
--- a/docs/core/policy-engine.md
+++ b/docs/core/policy-engine.md
@@ -95,8 +95,8 @@ has a designated number that forms the base of the final priority calculation.
 | Tier    | Base | Description                                                                |
 | :------ | :--- | :------------------------------------------------------------------------- |
 | Default | 1    | Built-in policies that ship with the Gemini CLI.                           |
-| User    | 2    | Custom policies defined by the user.                                       |
-| Project | 3    | Policies defined in the current project's configuration directory.         |
+| Project | 2    | Policies defined in the current project's configuration directory.         |
+| User    | 3    | Custom policies defined by the user.                                       |
 | Admin   | 4    | Policies managed by an administrator (e.g., in an enterprise environment). |
 
 Within a TOML policy file, you assign a priority value from **0 to 999**. The
@@ -106,16 +106,16 @@ engine transforms this into a final priority using the following formula:
 
 This system guarantees that:
 
-- Admin policies always override Project, User, and Default policies.
-- Project policies override User and Default policies.
-- User policies always override Default policies.
+- Admin policies always override User, Project, and Default policies.
+- User policies override Project and Default policies.
+- Project policies override Default policies.
 - You can still order rules within a single tier with fine-grained control.
 
 For example:
 
 - A `priority: 50` rule in a Default policy file becomes `1.050`.
-- A `priority: 100` rule in a User policy file becomes `2.100`.
-- A `priority: 10` rule in a Project policy file becomes `3.010`.
+- A `priority: 10` rule in a Project policy file becomes `2.010`.
+- A `priority: 100` rule in a User policy file becomes `3.100`.
 - A `priority: 20` rule in an Admin policy file becomes `4.020`.
 
 ### Approval modes
diff --git a/packages/cli/src/config/policy-engine.integration.test.ts b/packages/cli/src/config/policy-engine.integration.test.ts
index 2c7ce599da..dbc7f6a415 100644
--- a/packages/cli/src/config/policy-engine.integration.test.ts
+++ b/packages/cli/src/config/policy-engine.integration.test.ts
@@ -148,13 +148,13 @@ describe('Policy Engine Integration Tests', () => {
       );
       const engine = new PolicyEngine(config);
 
-      // MCP server allowed (priority 2.1) provides general allow for server
-      // MCP server allowed (priority 2.1) provides general allow for server
+      // MCP server allowed (priority 3.1) provides general allow for server
+      // MCP server allowed (priority 3.1) provides general allow for server
       expect(
         (await engine.check({ name: 'my-server__safe-tool' }, undefined))
           .decision,
       ).toBe(PolicyDecision.ALLOW);
-      // But specific tool exclude (priority 2.4) wins over server allow
+      // But specific tool exclude (priority 3.4) wins over server allow
       expect(
         (await engine.check({ name: 'my-server__dangerous-tool' }, undefined))
           .decision,
@@ -412,25 +412,25 @@ describe('Policy Engine Integration Tests', () => {
 
       // Find rules and verify their priorities
       const blockedToolRule = rules.find((r) => r.toolName === 'blocked-tool');
-      expect(blockedToolRule?.priority).toBe(2.4); // Command line exclude
+      expect(blockedToolRule?.priority).toBe(3.4); // Command line exclude
 
       const blockedServerRule = rules.find(
         (r) => r.toolName === 'blocked-server__*',
       );
-      expect(blockedServerRule?.priority).toBe(2.9); // MCP server exclude
+      expect(blockedServerRule?.priority).toBe(3.9); // MCP server exclude
 
       const specificToolRule = rules.find(
         (r) => r.toolName === 'specific-tool',
       );
-      expect(specificToolRule?.priority).toBe(2.3); // Command line allow
+      expect(specificToolRule?.priority).toBe(3.3); // Command line allow
 
       const trustedServerRule = rules.find(
         (r) => r.toolName === 'trusted-server__*',
       );
-      expect(trustedServerRule?.priority).toBe(2.2); // MCP trusted server
+      expect(trustedServerRule?.priority).toBe(3.2); // MCP trusted server
 
       const mcpServerRule = rules.find((r) => r.toolName === 'mcp-server__*');
-      expect(mcpServerRule?.priority).toBe(2.1); // MCP allowed server
+      expect(mcpServerRule?.priority).toBe(3.1); // MCP allowed server
 
       const readOnlyToolRule = rules.find((r) => r.toolName === 'glob');
       // Priority 70 in default tier → 1.07 (Overriding Plan Mode Deny)
@@ -577,16 +577,16 @@ describe('Policy Engine Integration Tests', () => {
 
       // Verify each rule has the expected priority
       const tool3Rule = rules.find((r) => r.toolName === 'tool3');
-      expect(tool3Rule?.priority).toBe(2.4); // Excluded tools (user tier)
+      expect(tool3Rule?.priority).toBe(3.4); // Excluded tools (user tier)
 
       const server2Rule = rules.find((r) => r.toolName === 'server2__*');
-      expect(server2Rule?.priority).toBe(2.9); // Excluded servers (user tier)
+      expect(server2Rule?.priority).toBe(3.9); // Excluded servers (user tier)
 
       const tool1Rule = rules.find((r) => r.toolName === 'tool1');
-      expect(tool1Rule?.priority).toBe(2.3); // Allowed tools (user tier)
+      expect(tool1Rule?.priority).toBe(3.3); // Allowed tools (user tier)
 
       const server1Rule = rules.find((r) => r.toolName === 'server1__*');
-      expect(server1Rule?.priority).toBe(2.1); // Allowed servers (user tier)
+      expect(server1Rule?.priority).toBe(3.1); // Allowed servers (user tier)
 
       const globRule = rules.find((r) => r.toolName === 'glob');
       // Priority 70 in default tier → 1.07
diff --git a/packages/core/src/policy/config.test.ts b/packages/core/src/policy/config.test.ts
index 32a5287113..a9fae7a1fa 100644
--- a/packages/core/src/policy/config.test.ts
+++ b/packages/core/src/policy/config.test.ts
@@ -169,7 +169,7 @@ describe('createPolicyEngineConfig', () => {
         r.decision === PolicyDecision.ALLOW,
     );
     expect(rule).toBeDefined();
-    expect(rule?.priority).toBeCloseTo(2.3, 5); // Command line allow
+    expect(rule?.priority).toBeCloseTo(3.3, 5); // Command line allow
   });
 
   it('should deny tools in tools.exclude', async () => {
@@ -188,7 +188,7 @@ describe('createPolicyEngineConfig', () => {
         r.decision === PolicyDecision.DENY,
     );
     expect(rule).toBeDefined();
-    expect(rule?.priority).toBeCloseTo(2.4, 5); // Command line exclude
+    expect(rule?.priority).toBeCloseTo(3.4, 5); // Command line exclude
   });
 
   it('should allow tools from allowed MCP servers', async () => {
@@ -206,7 +206,7 @@ describe('createPolicyEngineConfig', () => {
         r.toolName === 'my-server__*' && r.decision === PolicyDecision.ALLOW,
     );
     expect(rule).toBeDefined();
-    expect(rule?.priority).toBe(2.1); // MCP allowed server
+    expect(rule?.priority).toBe(3.1); // MCP allowed server
   });
 
   it('should deny tools from excluded MCP servers', async () => {
@@ -224,7 +224,7 @@ describe('createPolicyEngineConfig', () => {
         r.toolName === 'my-server__*' && r.decision === PolicyDecision.DENY,
     );
     expect(rule).toBeDefined();
-    expect(rule?.priority).toBe(2.9); // MCP excluded server
+    expect(rule?.priority).toBe(3.9); // MCP excluded server
   });
 
   it('should allow tools from trusted MCP servers', async () => {
@@ -251,7 +251,7 @@ describe('createPolicyEngineConfig', () => {
         r.decision === PolicyDecision.ALLOW,
     );
     expect(trustedRule).toBeDefined();
-    expect(trustedRule?.priority).toBe(2.2); // MCP trusted server
+    expect(trustedRule?.priority).toBe(3.2); // MCP trusted server
 
     // Untrusted server should not have an allow rule
     const untrustedRule = config.rules?.find(
@@ -288,7 +288,7 @@ describe('createPolicyEngineConfig', () => {
         r.decision === PolicyDecision.ALLOW,
     );
     expect(allowedRule).toBeDefined();
-    expect(allowedRule?.priority).toBe(2.1); // MCP allowed server
+    expect(allowedRule?.priority).toBe(3.1); // MCP allowed server
 
     // Check trusted server
     const trustedRule = config.rules?.find(
@@ -297,7 +297,7 @@ describe('createPolicyEngineConfig', () => {
         r.decision === PolicyDecision.ALLOW,
     );
     expect(trustedRule).toBeDefined();
-    expect(trustedRule?.priority).toBe(2.2); // MCP trusted server
+    expect(trustedRule?.priority).toBe(3.2); // MCP trusted server
 
     // Check excluded server
     const excludedRule = config.rules?.find(
@@ -306,7 +306,7 @@ describe('createPolicyEngineConfig', () => {
         r.decision === PolicyDecision.DENY,
     );
     expect(excludedRule).toBeDefined();
-    expect(excludedRule?.priority).toBe(2.9); // MCP excluded server
+    expect(excludedRule?.priority).toBe(3.9); // MCP excluded server
   });
 
   it('should allow all tools in YOLO mode', async () => {
@@ -387,11 +387,11 @@ describe('createPolicyEngineConfig', () => {
     );
 
     expect(serverDenyRule).toBeDefined();
-    expect(serverDenyRule?.priority).toBe(2.9); // MCP excluded server
+    expect(serverDenyRule?.priority).toBe(3.9); // MCP excluded server
     expect(toolAllowRule).toBeDefined();
-    expect(toolAllowRule?.priority).toBeCloseTo(2.3, 5); // Command line allow
+    expect(toolAllowRule?.priority).toBeCloseTo(3.3, 5); // Command line allow
 
-    // Server deny (2.9) has higher priority than tool allow (2.3),
+    // Server deny (3.9) has higher priority than tool allow (3.3),
     // so server deny wins (this is expected behavior - server-level blocks are security critical)
   });
 
@@ -424,7 +424,7 @@ describe('createPolicyEngineConfig', () => {
 
     expect(serverAllowRule).toBeDefined();
     expect(toolDenyRule).toBeDefined();
-    // Command line exclude (2.4) has higher priority than MCP server trust (2.2)
+    // Command line exclude (3.4) has higher priority than MCP server trust (3.2)
     // This is the correct behavior - specific exclusions should beat general server trust
     expect(toolDenyRule!.priority).toBeGreaterThan(serverAllowRule!.priority!);
   });
@@ -432,16 +432,16 @@ describe('createPolicyEngineConfig', () => {
   it('should handle complex priority scenarios correctly', async () => {
     const settings: PolicySettings = {
       tools: {
-        allowed: ['my-server__tool1', 'other-tool'], // Priority 2.3
-        exclude: ['my-server__tool2', 'glob'], // Priority 2.4
+        allowed: ['my-server__tool1', 'other-tool'], // Priority 3.3
+        exclude: ['my-server__tool2', 'glob'], // Priority 3.4
       },
       mcp: {
-        allowed: ['allowed-server'], // Priority 2.1
-        excluded: ['excluded-server'], // Priority 2.9
+        allowed: ['allowed-server'], // Priority 3.1
+        excluded: ['excluded-server'], // Priority 3.9
       },
       mcpServers: {
         'trusted-server': {
-          trust: true, // Priority 90 -> 2.2
+          trust: true, // Priority 90 -> 3.2
         },
       },
     };
@@ -517,7 +517,7 @@ describe('createPolicyEngineConfig', () => {
     expect(globDenyRule).toBeDefined();
     expect(globAllowRule).toBeDefined();
     // Deny from settings (user tier)
-    expect(globDenyRule!.priority).toBeCloseTo(2.4, 5); // Command line exclude
+    expect(globDenyRule!.priority).toBeCloseTo(3.4, 5); // Command line exclude
     // Allow from default TOML: 1 + 50/1000 = 1.05
     expect(globAllowRule!.priority).toBeCloseTo(1.05, 5);
 
@@ -530,11 +530,11 @@ describe('createPolicyEngineConfig', () => {
       }))
       .sort((a, b) => (b.priority ?? 0) - (a.priority ?? 0));
 
-    // Check that the highest priority items are the excludes (user tier: 2.4 and 2.9)
+    // Check that the highest priority items are the excludes (user tier: 3.4 and 3.9)
     const highestPriorityExcludes = priorities?.filter(
       (p) =>
-        Math.abs(p.priority! - 2.4) < 0.01 ||
-        Math.abs(p.priority! - 2.9) < 0.01,
+        Math.abs(p.priority! - 3.4) < 0.01 ||
+        Math.abs(p.priority! - 3.9) < 0.01,
     );
     expect(
       highestPriorityExcludes?.every((p) => p.decision === PolicyDecision.DENY),
@@ -626,7 +626,7 @@ describe('createPolicyEngineConfig', () => {
         r.toolName === 'dangerous-tool' && r.decision === PolicyDecision.DENY,
     );
     expect(excludeRule).toBeDefined();
-    expect(excludeRule?.priority).toBeCloseTo(2.4, 5); // Command line exclude
+    expect(excludeRule?.priority).toBeCloseTo(3.4, 5); // Command line exclude
   });
 
   it('should support argsPattern in policy rules', async () => {
@@ -733,8 +733,8 @@ priority = 150
         r.decision === PolicyDecision.ALLOW,
     );
     expect(rule).toBeDefined();
-    // Priority 150 in user tier → 2.150
-    expect(rule?.priority).toBeCloseTo(2.15, 5);
+    // Priority 150 in user tier → 3.150
+    expect(rule?.priority).toBeCloseTo(3.15, 5);
     expect(rule?.argsPattern).toBeInstanceOf(RegExp);
     expect(rule?.argsPattern?.test('{"command":"git status"}')).toBe(true);
     expect(rule?.argsPattern?.test('{"command":"git diff"}')).toBe(true);
@@ -1046,7 +1046,7 @@ name = "invalid-name"
         r.decision === PolicyDecision.ALLOW,
     );
     expect(rule).toBeDefined();
-    expect(rule?.priority).toBeCloseTo(2.3, 5); // Command line allow
+    expect(rule?.priority).toBeCloseTo(3.3, 5); // Command line allow
 
     vi.doUnmock('node:fs/promises');
   });
@@ -1188,7 +1188,7 @@ modes = ["plan"]
         r.modes?.includes(ApprovalMode.PLAN),
     );
     expect(subagentRule).toBeDefined();
-    expect(subagentRule?.priority).toBeCloseTo(2.1, 5);
+    expect(subagentRule?.priority).toBeCloseTo(3.1, 5);
 
     vi.doUnmock('node:fs/promises');
   });
diff --git a/packages/core/src/policy/config.ts b/packages/core/src/policy/config.ts
index 3bb324a38e..6a0b6c4145 100644
--- a/packages/core/src/policy/config.ts
+++ b/packages/core/src/policy/config.ts
@@ -38,8 +38,8 @@ export const DEFAULT_CORE_POLICIES_DIR = path.join(__dirname, 'policies');
 
 // Policy tier constants for priority calculation
 export const DEFAULT_POLICY_TIER = 1;
-export const USER_POLICY_TIER = 2;
-export const PROJECT_POLICY_TIER = 3;
+export const PROJECT_POLICY_TIER = 2;
+export const USER_POLICY_TIER = 3;
 export const ADMIN_POLICY_TIER = 4;
 
 /**
@@ -222,20 +222,20 @@ export async function createPolicyEngineConfig(
   //
   // Priority bands (tiers):
   // - Default policies (TOML): 1 + priority/1000 (e.g., priority 100 → 1.100)
-  // - User policies (TOML): 2 + priority/1000 (e.g., priority 100 → 2.100)
-  // - Project policies (TOML): 3 + priority/1000 (e.g., priority 100 → 3.100)
+  // - Project policies (TOML): 2 + priority/1000 (e.g., priority 100 → 2.100)
+  // - User policies (TOML): 3 + priority/1000 (e.g., priority 100 → 3.100)
   // - Admin policies (TOML): 4 + priority/1000 (e.g., priority 100 → 4.100)
   //
-  // This ensures Admin > Project > User > Default hierarchy is always preserved,
+  // This ensures Admin > User > Project > Default hierarchy is always preserved,
   // while allowing user-specified priorities to work within each tier.
   //
-  // Settings-based and dynamic rules (all in user tier 2.x):
-  //   2.95: Tools that the user has selected as "Always Allow" in the interactive UI
-  //   2.9:  MCP servers excluded list (security: persistent server blocks)
-  //   2.4:  Command line flag --exclude-tools (explicit temporary blocks)
-  //   2.3:  Command line flag --allowed-tools (explicit temporary allows)
-  //   2.2:  MCP servers with trust=true (persistent trusted servers)
-  //   2.1:  MCP servers allowed list (persistent general server allows)
+  // Settings-based and dynamic rules (all in user tier 3.x):
+  //   3.95: Tools that the user has selected as "Always Allow" in the interactive UI
+  //   3.9:  MCP servers excluded list (security: persistent server blocks)
+  //   3.4:  Command line flag --exclude-tools (explicit temporary blocks)
+  //   3.3:  Command line flag --allowed-tools (explicit temporary allows)
+  //   3.2:  MCP servers with trust=true (persistent trusted servers)
+  //   3.1:  MCP servers allowed list (persistent general server allows)
   //
   // TOML policy priorities (before transformation):
   //   10: Write tools default to ASK_USER (becomes 1.010 in default tier)
@@ -246,33 +246,33 @@ export async function createPolicyEngineConfig(
   //   999: YOLO mode allow-all (becomes 1.999 in default tier)
 
   // MCP servers that are explicitly excluded in settings.mcp.excluded
-  // Priority: 2.9 (highest in user tier for security - persistent server blocks)
+  // Priority: 3.9 (highest in user tier for security - persistent server blocks)
   if (settings.mcp?.excluded) {
     for (const serverName of settings.mcp.excluded) {
       rules.push({
         toolName: `${serverName}__*`,
         decision: PolicyDecision.DENY,
-        priority: 2.9,
+        priority: 3.9,
         source: 'Settings (MCP Excluded)',
       });
     }
   }
 
   // Tools that are explicitly excluded in the settings.
-  // Priority: 2.4 (user tier - explicit temporary blocks)
+  // Priority: 3.4 (user tier - explicit temporary blocks)
   if (settings.tools?.exclude) {
     for (const tool of settings.tools.exclude) {
       rules.push({
         toolName: tool,
         decision: PolicyDecision.DENY,
-        priority: 2.4,
+        priority: 3.4,
         source: 'Settings (Tools Excluded)',
       });
     }
   }
 
   // Tools that are explicitly allowed in the settings.
-  // Priority: 2.3 (user tier - explicit temporary allows)
+  // Priority: 3.3 (user tier - explicit temporary allows)
   if (settings.tools?.allowed) {
     for (const tool of settings.tools.allowed) {
       // Check for legacy format: toolName(args)
@@ -292,7 +292,7 @@ export async function createPolicyEngineConfig(
               rules.push({
                 toolName,
                 decision: PolicyDecision.ALLOW,
-                priority: 2.3,
+                priority: 3.3,
                 argsPattern: new RegExp(pattern),
                 source: 'Settings (Tools Allowed)',
               });
@@ -304,7 +304,7 @@ export async function createPolicyEngineConfig(
           rules.push({
             toolName,
             decision: PolicyDecision.ALLOW,
-            priority: 2.3,
+            priority: 3.3,
             source: 'Settings (Tools Allowed)',
           });
         }
@@ -316,7 +316,7 @@ export async function createPolicyEngineConfig(
         rules.push({
           toolName,
           decision: PolicyDecision.ALLOW,
-          priority: 2.3,
+          priority: 3.3,
           source: 'Settings (Tools Allowed)',
         });
       }
@@ -324,7 +324,7 @@ export async function createPolicyEngineConfig(
   }
 
   // MCP servers that are trusted in the settings.
-  // Priority: 2.2 (user tier - persistent trusted servers)
+  // Priority: 3.2 (user tier - persistent trusted servers)
   if (settings.mcpServers) {
     for (const [serverName, serverConfig] of Object.entries(
       settings.mcpServers,
@@ -335,7 +335,7 @@ export async function createPolicyEngineConfig(
         rules.push({
           toolName: `${serverName}__*`,
           decision: PolicyDecision.ALLOW,
-          priority: 2.2,
+          priority: 3.2,
           source: 'Settings (MCP Trusted)',
         });
       }
@@ -343,13 +343,13 @@ export async function createPolicyEngineConfig(
   }
 
   // MCP servers that are explicitly allowed in settings.mcp.allowed
-  // Priority: 2.1 (user tier - persistent general server allows)
+  // Priority: 3.1 (user tier - persistent general server allows)
   if (settings.mcp?.allowed) {
     for (const serverName of settings.mcp.allowed) {
       rules.push({
         toolName: `${serverName}__*`,
         decision: PolicyDecision.ALLOW,
-        priority: 2.1,
+        priority: 3.1,
         source: 'Settings (MCP Allowed)',
       });
     }
@@ -396,10 +396,10 @@ export function createPolicyUpdater(
             policyEngine.addRule({
               toolName,
               decision: PolicyDecision.ALLOW,
-              // User tier (2) + high priority (950/1000) = 2.95
+              // User tier (3) + high priority (950/1000) = 3.95
               // This ensures user "always allow" selections are high priority
-              // but still lose to admin policies (3.xxx) and settings excludes (200)
-              priority: 2.95,
+              // but still lose to admin policies (4.xxx) and settings excludes (300)
+              priority: 3.95,
               argsPattern: new RegExp(pattern),
               source: 'Dynamic (Confirmed)',
             });
@@ -421,10 +421,10 @@ export function createPolicyUpdater(
         policyEngine.addRule({
           toolName,
           decision: PolicyDecision.ALLOW,
-          // User tier (2) + high priority (950/1000) = 2.95
+          // User tier (3) + high priority (950/1000) = 3.95
           // This ensures user "always allow" selections are high priority
-          // but still lose to admin policies (3.xxx) and settings excludes (200)
-          priority: 2.95,
+          // but still lose to admin policies (4.xxx) and settings excludes (300)
+          priority: 3.95,
           argsPattern,
           source: 'Dynamic (Confirmed)',
         });
diff --git a/packages/core/src/policy/persistence.test.ts b/packages/core/src/policy/persistence.test.ts
index 7d80b41893..3acf7c714d 100644
--- a/packages/core/src/policy/persistence.test.ts
+++ b/packages/core/src/policy/persistence.test.ts
@@ -136,7 +136,7 @@ describe('createPolicyUpdater', () => {
     const rules = policyEngine.getRules();
     const addedRule = rules.find((r) => r.toolName === toolName);
     expect(addedRule).toBeDefined();
-    expect(addedRule?.priority).toBe(2.95);
+    expect(addedRule?.priority).toBe(3.95);
     expect(addedRule?.argsPattern).toEqual(
       new RegExp(`"command":"git\\ status(?:[\\s"]|\\\\")`),
     );
diff --git a/packages/core/src/policy/policies/plan.toml b/packages/core/src/policy/policies/plan.toml
index 12648fec5f..2bd18554d0 100644
--- a/packages/core/src/policy/policies/plan.toml
+++ b/packages/core/src/policy/policies/plan.toml
@@ -5,19 +5,20 @@
 #
 # Priority bands (tiers):
 # - Default policies (TOML): 1 + priority/1000 (e.g., priority 100 → 1.100)
-# - User policies (TOML): 2 + priority/1000 (e.g., priority 100 → 2.100)
-# - Admin policies (TOML): 3 + priority/1000 (e.g., priority 100 → 3.100)
+# - Project policies (TOML): 2 + priority/1000 (e.g., priority 100 → 2.100)
+# - User policies (TOML): 3 + priority/1000 (e.g., priority 100 → 3.100)
+# - Admin policies (TOML): 4 + priority/1000 (e.g., priority 100 → 4.100)
 #
-# This ensures Admin > User > Default hierarchy is always preserved,
+# This ensures Admin > User > Project > Default hierarchy is always preserved,
 # while allowing user-specified priorities to work within each tier.
 #
-# Settings-based and dynamic rules (all in user tier 2.x):
-#   2.95: Tools that the user has selected as "Always Allow" in the interactive UI
-#   2.9:  MCP servers excluded list (security: persistent server blocks)
-#   2.4:  Command line flag --exclude-tools (explicit temporary blocks)
-#   2.3:  Command line flag --allowed-tools (explicit temporary allows)
-#   2.2:  MCP servers with trust=true (persistent trusted servers)
-#   2.1:  MCP servers allowed list (persistent general server allows)
+# Settings-based and dynamic rules (all in user tier 3.x):
+#   3.95: Tools that the user has selected as "Always Allow" in the interactive UI
+#   3.9:  MCP servers excluded list (security: persistent server blocks)
+#   3.4:  Command line flag --exclude-tools (explicit temporary blocks)
+#   3.3:  Command line flag --allowed-tools (explicit temporary allows)
+#   3.2:  MCP servers with trust=true (persistent trusted servers)
+#   3.1:  MCP servers allowed list (persistent general server allows)
 #
 # TOML policy priorities (before transformation):
 #   10: Write tools default to ASK_USER (becomes 1.010 in default tier)
diff --git a/packages/core/src/policy/policies/read-only.toml b/packages/core/src/policy/policies/read-only.toml
index b608a87904..41f6b2205b 100644
--- a/packages/core/src/policy/policies/read-only.toml
+++ b/packages/core/src/policy/policies/read-only.toml
@@ -5,19 +5,20 @@
 #
 # Priority bands (tiers):
 # - Default policies (TOML): 1 + priority/1000 (e.g., priority 100 → 1.100)
-# - User policies (TOML): 2 + priority/1000 (e.g., priority 100 → 2.100)
-# - Admin policies (TOML): 3 + priority/1000 (e.g., priority 100 → 3.100)
+# - Project policies (TOML): 2 + priority/1000 (e.g., priority 100 → 2.100)
+# - User policies (TOML): 3 + priority/1000 (e.g., priority 100 → 3.100)
+# - Admin policies (TOML): 4 + priority/1000 (e.g., priority 100 → 4.100)
 #
-# This ensures Admin > User > Default hierarchy is always preserved,
+# This ensures Admin > User > Project > Default hierarchy is always preserved,
 # while allowing user-specified priorities to work within each tier.
 #
-# Settings-based and dynamic rules (all in user tier 2.x):
-#   2.95: Tools that the user has selected as "Always Allow" in the interactive UI
-#   2.9:  MCP servers excluded list (security: persistent server blocks)
-#   2.4:  Command line flag --exclude-tools (explicit temporary blocks)
-#   2.3:  Command line flag --allowed-tools (explicit temporary allows)
-#   2.2:  MCP servers with trust=true (persistent trusted servers)
-#   2.1:  MCP servers allowed list (persistent general server allows)
+# Settings-based and dynamic rules (all in user tier 3.x):
+#   3.95: Tools that the user has selected as "Always Allow" in the interactive UI
+#   3.9:  MCP servers excluded list (security: persistent server blocks)
+#   3.4:  Command line flag --exclude-tools (explicit temporary blocks)
+#   3.3:  Command line flag --allowed-tools (explicit temporary allows)
+#   3.2:  MCP servers with trust=true (persistent trusted servers)
+#   3.1:  MCP servers allowed list (persistent general server allows)
 #
 # TOML policy priorities (before transformation):
 #   10: Write tools default to ASK_USER (becomes 1.010 in default tier)
diff --git a/packages/core/src/policy/policies/write.toml b/packages/core/src/policy/policies/write.toml
index 991424cebc..8f1e3d33e1 100644
--- a/packages/core/src/policy/policies/write.toml
+++ b/packages/core/src/policy/policies/write.toml
@@ -5,19 +5,20 @@
 #
 # Priority bands (tiers):
 # - Default policies (TOML): 1 + priority/1000 (e.g., priority 100 → 1.100)
-# - User policies (TOML): 2 + priority/1000 (e.g., priority 100 → 2.100)
-# - Admin policies (TOML): 3 + priority/1000 (e.g., priority 100 → 3.100)
+# - Project policies (TOML): 2 + priority/1000 (e.g., priority 100 → 2.100)
+# - User policies (TOML): 3 + priority/1000 (e.g., priority 100 → 3.100)
+# - Admin policies (TOML): 4 + priority/1000 (e.g., priority 100 → 4.100)
 #
-# This ensures Admin > User > Default hierarchy is always preserved,
+# This ensures Admin > User > Project > Default hierarchy is always preserved,
 # while allowing user-specified priorities to work within each tier.
 #
-# Settings-based and dynamic rules (all in user tier 2.x):
-#   2.95: Tools that the user has selected as "Always Allow" in the interactive UI
-#   2.9:  MCP servers excluded list (security: persistent server blocks)
-#   2.4:  Command line flag --exclude-tools (explicit temporary blocks)
-#   2.3:  Command line flag --allowed-tools (explicit temporary allows)
-#   2.2:  MCP servers with trust=true (persistent trusted servers)
-#   2.1:  MCP servers allowed list (persistent general server allows)
+# Settings-based and dynamic rules (all in user tier 3.x):
+#   3.95: Tools that the user has selected as "Always Allow" in the interactive UI
+#   3.9:  MCP servers excluded list (security: persistent server blocks)
+#   3.4:  Command line flag --exclude-tools (explicit temporary blocks)
+#   3.3:  Command line flag --allowed-tools (explicit temporary allows)
+#   3.2:  MCP servers with trust=true (persistent trusted servers)
+#   3.1:  MCP servers allowed list (persistent general server allows)
 #
 # TOML policy priorities (before transformation):
 #   10: Write tools default to ASK_USER (becomes 1.010 in default tier)
diff --git a/packages/core/src/policy/policies/yolo.toml b/packages/core/src/policy/policies/yolo.toml
index 95c3b411f1..174099d7ee 100644
--- a/packages/core/src/policy/policies/yolo.toml
+++ b/packages/core/src/policy/policies/yolo.toml
@@ -5,19 +5,20 @@
 #
 # Priority bands (tiers):
 # - Default policies (TOML): 1 + priority/1000 (e.g., priority 100 → 1.100)
-# - User policies (TOML): 2 + priority/1000 (e.g., priority 100 → 2.100)
-# - Admin policies (TOML): 3 + priority/1000 (e.g., priority 100 → 3.100)
+# - Project policies (TOML): 2 + priority/1000 (e.g., priority 100 → 2.100)
+# - User policies (TOML): 3 + priority/1000 (e.g., priority 100 → 3.100)
+# - Admin policies (TOML): 4 + priority/1000 (e.g., priority 100 → 4.100)
 #
-# This ensures Admin > User > Default hierarchy is always preserved,
+# This ensures Admin > User > Project > Default hierarchy is always preserved,
 # while allowing user-specified priorities to work within each tier.
 #
-# Settings-based and dynamic rules (all in user tier 2.x):
-#   2.95: Tools that the user has selected as "Always Allow" in the interactive UI
-#   2.9:  MCP servers excluded list (security: persistent server blocks)
-#   2.4:  Command line flag --exclude-tools (explicit temporary blocks)
-#   2.3:  Command line flag --allowed-tools (explicit temporary allows)
-#   2.2:  MCP servers with trust=true (persistent trusted servers)
-#   2.1:  MCP servers allowed list (persistent general server allows)
+# Settings-based and dynamic rules (all in user tier 3.x):
+#   3.95: Tools that the user has selected as "Always Allow" in the interactive UI
+#   3.9:  MCP servers excluded list (security: persistent server blocks)
+#   3.4:  Command line flag --exclude-tools (explicit temporary blocks)
+#   3.3:  Command line flag --allowed-tools (explicit temporary allows)
+#   3.2:  MCP servers with trust=true (persistent trusted servers)
+#   3.1:  MCP servers allowed list (persistent general server allows)
 #
 # TOML policy priorities (before transformation):
 #   10: Write tools default to ASK_USER (becomes 1.010 in default tier)
diff --git a/packages/core/src/policy/project-policy.test.ts b/packages/core/src/policy/project-policy.test.ts
index 73018b0821..dbbc7b759e 100644
--- a/packages/core/src/policy/project-policy.test.ts
+++ b/packages/core/src/policy/project-policy.test.ts
@@ -34,7 +34,7 @@ describe('Project-Level Policies', () => {
     vi.doUnmock('node:fs/promises');
   });
 
-  it('should load project policies with correct priority (Tier 3)', async () => {
+  it('should load project policies with correct priority (Tier 2)', async () => {
     const projectPoliciesDir = '/mock/project/policies';
     const defaultPoliciesDir = '/mock/default/policies';
 
@@ -88,14 +88,14 @@ priority = 10
 toolName = "test_tool"
 decision = "deny"
 priority = 10
-`; // Tier 2 -> 2.010
+`; // Tier 3 -> 3.010
       }
       if (path.includes('project.toml')) {
         return `[[rule]]
 toolName = "test_tool"
 decision = "allow"
 priority = 10
-`; // Tier 3 -> 3.010
+`; // Tier 2 -> 2.010
       }
       if (path.includes('admin.toml')) {
         return `[[rule]]
@@ -116,7 +116,7 @@ priority = 10
 
     const { createPolicyEngineConfig } = await import('./config.js');
 
-    // Test 1: Project vs User (Project should win)
+    // Test 1: Project vs User (User should win)
     const config = await createPolicyEngineConfig(
       {},
       ApprovalMode.DEFAULT,
@@ -129,8 +129,8 @@ priority = 10
 
     // Check for all 4 rules
     const defaultRule = rules?.find((r) => r.priority === 1.01);
-    const userRule = rules?.find((r) => r.priority === 2.01);
-    const projectRule = rules?.find((r) => r.priority === 3.01);
+    const projectRule = rules?.find((r) => r.priority === 2.01);
+    const userRule = rules?.find((r) => r.priority === 3.01);
     const adminRule = rules?.find((r) => r.priority === 4.01);
 
     expect(defaultRule).toBeDefined();
@@ -138,10 +138,10 @@ priority = 10
     expect(projectRule).toBeDefined();
     expect(adminRule).toBeDefined();
 
-    // Verify Hierarchy: Admin > Project > User > Default
-    expect(adminRule!.priority).toBeGreaterThan(projectRule!.priority!);
-    expect(projectRule!.priority).toBeGreaterThan(userRule!.priority!);
-    expect(userRule!.priority).toBeGreaterThan(defaultRule!.priority!);
+    // Verify Hierarchy: Admin > User > Project > Default
+    expect(adminRule!.priority).toBeGreaterThan(userRule!.priority!);
+    expect(userRule!.priority).toBeGreaterThan(projectRule!.priority!);
+    expect(projectRule!.priority).toBeGreaterThan(defaultRule!.priority!);
   });
 
   it('should ignore project policies if projectPoliciesDir is undefined', async () => {
@@ -192,7 +192,7 @@ priority=10`,
     expect(rules![0].priority).toBe(1.01);
   });
 
-  it('should load project policies and correctly transform to Tier 3', async () => {
+  it('should load project policies and correctly transform to Tier 2', async () => {
     const projectPoliciesDir = '/mock/project/policies';
 
     // Mock FS
@@ -236,7 +236,7 @@ priority=500`,
 
     const rule = config.rules?.find((r) => r.toolName === 'p_tool');
     expect(rule).toBeDefined();
-    // Project Tier (3) + 500/1000 = 3.5
-    expect(rule?.priority).toBe(3.5);
+    // Project Tier (2) + 500/1000 = 2.5
+    expect(rule?.priority).toBe(2.5);
   });
 });
diff --git a/packages/core/src/policy/toml-loader.test.ts b/packages/core/src/policy/toml-loader.test.ts
index c627f6d049..115c758063 100644
--- a/packages/core/src/policy/toml-loader.test.ts
+++ b/packages/core/src/policy/toml-loader.test.ts
@@ -228,14 +228,18 @@ modes = ["autoEdit"]
 `,
       );
 
-      const getPolicyTier = (_dir: string) => 2; // Tier 2
-      const result = await loadPoliciesFromToml([tempDir], getPolicyTier);
+      const getPolicyTier2 = (_dir: string) => 2; // Tier 2
+      const result2 = await loadPoliciesFromToml([tempDir], getPolicyTier2);
 
-      expect(result.rules).toHaveLength(1);
-      expect(result.rules[0].toolName).toBe('tier2-tool');
-      expect(result.rules[0].modes).toEqual(['autoEdit']);
-      expect(result.rules[0].source).toBe('User: tier2.toml');
-      expect(result.errors).toHaveLength(0);
+      expect(result2.rules).toHaveLength(1);
+      expect(result2.rules[0].toolName).toBe('tier2-tool');
+      expect(result2.rules[0].modes).toEqual(['autoEdit']);
+      expect(result2.rules[0].source).toBe('Project: tier2.toml');
+
+      const getPolicyTier3 = (_dir: string) => 3; // Tier 3
+      const result3 = await loadPoliciesFromToml([tempDir], getPolicyTier3);
+      expect(result3.rules[0].source).toBe('User: tier2.toml');
+      expect(result3.errors).toHaveLength(0);
     });
 
     it('should handle TOML parse errors', async () => {
diff --git a/packages/core/src/policy/toml-loader.ts b/packages/core/src/policy/toml-loader.ts
index 022bddc048..b23128a990 100644
--- a/packages/core/src/policy/toml-loader.ts
+++ b/packages/core/src/policy/toml-loader.ts
@@ -127,8 +127,8 @@ export interface PolicyLoadResult {
  */
 function getTierName(tier: number): 'default' | 'user' | 'project' | 'admin' {
   if (tier === 1) return 'default';
-  if (tier === 2) return 'user';
-  if (tier === 3) return 'project';
+  if (tier === 2) return 'project';
+  if (tier === 3) return 'user';
   if (tier === 4) return 'admin';
   return 'default';
 }