diff --git a/src/hooks/useAuth.tsx b/src/hooks/useAuth.tsx
index 87335f99..2d6896e8 100644
--- a/src/hooks/useAuth.tsx
+++ b/src/hooks/useAuth.tsx
@@ -181,11 +181,20 @@ function AuthProviderComponent({ children }: { children: React.ReactNode }) {
         setSession(session);
         setUser(session.user);
         sessionVerifiedRef.current = true;
-      } else if (event === 'INITIAL_SESSION' && session) {
-        console.log('[Auth] INITIAL_SESSION detected, setting session and user');
-        setSession(session);
-        setUser(session.user);
-        sessionVerifiedRef.current = true;
+      } else if (event === 'INITIAL_SESSION') {
+        if (session) {
+          console.log('[Auth] INITIAL_SESSION detected with session, setting user');
+          setSession(session);
+          setUser(session.user);
+          sessionVerifiedRef.current = true;
+        } else {
+          console.log('[Auth] INITIAL_SESSION detected with NO session - user not logged in');
+          setSession(null);
+          setUser(null);
+          setProfile(null);
+          sessionVerifiedRef.current = false;
+          setLoading(false);
+        }
       } else if (event === 'SIGNED_OUT') {
         console.log('[Auth] SIGNED_OUT detected, clearing session');
         setSession(null);
@@ -272,7 +281,7 @@ function AuthProviderComponent({ children }: { children: React.ReactNode }) {
         }
         
         // Defer profile fetch to avoid deadlock
-        const shouldWaitForProfile = event === 'SIGNED_IN' || event === 'INITIAL_SESSION';
+        const shouldWaitForProfile = (event === 'SIGNED_IN' || event === 'INITIAL_SESSION') && session !== null;
         console.log('[Auth] Profile fetch deferred, shouldWaitForProfile:', shouldWaitForProfile, 'event:', event);
         profileFetchTimeoutRef.current = setTimeout(() => {
           if (!isMountedRef.current) return;
@@ -287,6 +296,11 @@ function AuthProviderComponent({ children }: { children: React.ReactNode }) {
       } else {
         if (isMountedRef.current) {
           setProfile(null);
+          // If no session and this is an init event, resolve loading immediately
+          if (event === 'INITIAL_SESSION' || event === 'SIGNED_OUT') {
+            console.log('[Auth] No session for event:', event, '- setting loading to false');
+            setLoading(false);
+          }
         }
       }