diff --git a/frontend/e2e/configure-modal.spec.ts b/frontend/e2e/configure-modal.spec.ts
new file mode 100644
index 0000000..4919135
--- /dev/null
+++ b/frontend/e2e/configure-modal.spec.ts
@@ -0,0 +1,81 @@
+import { test, expect } from '@playwright/test';
+
+test.describe('Configure Modal (Issue #14)', () => {
+  test('Configure modal has proper backdrop overlay', async ({ page }) => {
+    // Navigate to the app
+    await page.goto('/app');
+
+    // Wait for page to load
+    await page.waitForLoadState('networkidle');
+
+    // Check if there are any projects listed
+    const projectCards = page.locator('[class*="card"]').filter({ hasText: /Configure|Settings/ });
+
+    // If no projects, check that we see the "No projects" message or create project button
+    const noProjectsMessage = page.getByText('No projects yet');
+    const hasNoProjects = await noProjectsMessage.isVisible().catch(() => false);
+
+    if (hasNoProjects) {
+      console.log('No projects found - skipping configure modal test');
+      return;
+    }
+
+    // Find and click the Settings/Configure button on first project
+    const settingsButton = page.locator('button').filter({ has: page.locator('svg') }).first();
+
+    // Look for a settings icon button
+    const configureButton = page.locator('[title="Setup project"], [title="Configure"]').first();
+
+    if (await configureButton.isVisible()) {
+      await configureButton.click();
+
+      // Wait for modal to appear
+      await page.waitForTimeout(500);
+
+      // Check that the modal backdrop exists with proper styling
+      const backdrop = page.locator('.fixed.inset-0').filter({ has: page.locator('.card') });
+
+      // Verify backdrop has semi-transparent background (bg-black/50)
+      const backdropElement = backdrop.first();
+      if (await backdropElement.isVisible()) {
+        const bgClass = await backdropElement.getAttribute('class');
+
+        // Check for semi-transparent background class
+        expect(bgClass).toContain('bg-black/50');
+
+        // Verify clicking outside closes the modal
+        await backdropElement.click({ position: { x: 10, y: 10 } });
+
+        // Modal should be closed
+        await expect(backdrop).not.toBeVisible({ timeout: 2000 });
+
+        console.log('✅ Configure modal has proper backdrop and closes on outside click');
+      }
+    } else {
+      console.log('No configure button found');
+    }
+  });
+
+  test('Configure modal can be closed with X button', async ({ page }) => {
+    await page.goto('/app');
+    await page.waitForLoadState('networkidle');
+
+    // Find configure/settings button
+    const configureButton = page.locator('[title="Setup project"]').first();
+
+    if (await configureButton.isVisible().catch(() => false)) {
+      await configureButton.click();
+      await page.waitForTimeout(500);
+
+      // Find and click the close button (X)
+      const closeButton = page.locator('button').filter({ hasText: '✕' });
+      await closeButton.click();
+
+      // Verify modal is closed
+      const modal = page.locator('.fixed.inset-0').filter({ has: page.locator('.card') });
+      await expect(modal).not.toBeVisible({ timeout: 2000 });
+
+      console.log('✅ Configure modal closes with X button');
+    }
+  });
+});
diff --git a/frontend/e2e/screenshot-test.spec.ts b/frontend/e2e/screenshot-test.spec.ts
new file mode 100644
index 0000000..c85790a
--- /dev/null
+++ b/frontend/e2e/screenshot-test.spec.ts
@@ -0,0 +1,47 @@
+import { test, expect } from '@playwright/test';
+
+test('Take screenshot of configure modal', async ({ page }) => {
+  // Navigate to the app
+  await page.goto('/app');
+  await page.waitForLoadState('networkidle');
+  await page.waitForTimeout(1000);
+
+  // Take screenshot of projects page
+  await page.screenshot({ path: 'e2e/screenshots/projects-page.png', fullPage: true });
+
+  // Click on a project in the sidebar to select it
+  const projectItem = page.locator('text=diatrak').first();
+  if (await projectItem.isVisible()) {
+    await projectItem.click();
+    await page.waitForTimeout(1000);
+
+    // Take screenshot after selecting project
+    await page.screenshot({ path: 'e2e/screenshots/project-selected.png', fullPage: true });
+
+    // Now look for Configure button
+    const configureButton = page.getByRole('button', { name: /Configure/i });
+    const configVisible = await configureButton.isVisible().catch(() => false);
+    console.log(`Configure button visible: ${configVisible}`);
+
+    if (configVisible) {
+      await configureButton.click();
+      await page.waitForTimeout(500);
+
+      // Take screenshot of the modal
+      await page.screenshot({ path: 'e2e/screenshots/configure-modal.png', fullPage: true });
+
+      // Check if backdrop has correct class
+      const backdrop = page.locator('.bg-black\\/50');
+      const backdropVisible = await backdrop.isVisible().catch(() => false);
+      console.log(`Backdrop with bg-black/50 visible: ${backdropVisible}`);
+
+      expect(backdropVisible).toBe(true);
+    } else {
+      // Try looking for Settings icon button
+      const settingsBtn = page.locator('[title*="Setup"], button:has(svg)').filter({ hasText: '' });
+      console.log(`Settings buttons found: ${await settingsBtn.count()}`);
+    }
+  } else {
+    console.log('No project found to click');
+  }
+});
diff --git a/frontend/e2e/screenshots/configure-modal.png b/frontend/e2e/screenshots/configure-modal.png
new file mode 100644
index 0000000..9d7b378
Binary files /dev/null and b/frontend/e2e/screenshots/configure-modal.png differ
diff --git a/frontend/e2e/screenshots/project-selected.png b/frontend/e2e/screenshots/project-selected.png
new file mode 100644
index 0000000..81cfd6d
Binary files /dev/null and b/frontend/e2e/screenshots/project-selected.png differ
diff --git a/frontend/e2e/screenshots/projects-page.png b/frontend/e2e/screenshots/projects-page.png
new file mode 100644
index 0000000..d5952d1
Binary files /dev/null and b/frontend/e2e/screenshots/projects-page.png differ
diff --git a/frontend/playwright.config.ts b/frontend/playwright.config.ts
new file mode 100644
index 0000000..f450d61
--- /dev/null
+++ b/frontend/playwright.config.ts
@@ -0,0 +1,26 @@
+import { defineConfig, devices } from '@playwright/test';
+
+export default defineConfig({
+  testDir: './e2e',
+  fullyParallel: true,
+  forbidOnly: !!process.env.CI,
+  retries: process.env.CI ? 2 : 0,
+  workers: process.env.CI ? 1 : undefined,
+  reporter: 'html',
+  use: {
+    baseURL: 'http://localhost:5173',
+    trace: 'on-first-retry',
+    screenshot: 'only-on-failure',
+  },
+  projects: [
+    {
+      name: 'chromium',
+      use: { ...devices['Desktop Chrome'] },
+    },
+  ],
+  webServer: {
+    command: 'npm run dev',
+    url: 'http://localhost:5173',
+    reuseExistingServer: true,
+  },
+});
diff --git a/frontend/src/components/ProjectSetup.tsx b/frontend/src/components/ProjectSetup.tsx
index 7f6c8ee..ef6e8fd 100644
--- a/frontend/src/components/ProjectSetup.tsx
+++ b/frontend/src/components/ProjectSetup.tsx
@@ -97,11 +97,18 @@ export default function ProjectSetup({
   ];
 
   return (
-    <div className="fixed inset-0 flex items-center justify-center z-50 p-4 bg-dark-navy">
+    <motion.div
+      initial={{ opacity: 0 }}
+      animate={{ opacity: 1 }}
+      exit={{ opacity: 0 }}
+      className="fixed inset-0 flex items-center justify-center z-50 p-4 bg-black/50 backdrop-blur-sm"
+      onClick={onClose}
+    >
       <motion.div
         initial={{ opacity: 0, scale: 0.95 }}
         animate={{ opacity: 1, scale: 1 }}
         exit={{ opacity: 0, scale: 0.95 }}
+        onClick={(e) => e.stopPropagation()}
         className="card w-full max-w-4xl max-h-[90vh] overflow-hidden flex flex-col"
       >
         {/* Header */}
@@ -158,7 +165,7 @@ export default function ProjectSetup({
           </AnimatePresence>
         </div>
       </motion.div>
-    </div>
+    </motion.div>
   );
 }
 
diff --git a/frontend/test-results/.last-run.json b/frontend/test-results/.last-run.json
new file mode 100644
index 0000000..cbcc1fb
--- /dev/null
+++ b/frontend/test-results/.last-run.json
@@ -0,0 +1,4 @@
+{
+  "status": "passed",
+  "failedTests": []
+}
\ No newline at end of file