diff --git a/docs/JUPYTER_IMPLEMENTATION_STATUS.md b/docs/JUPYTER_IMPLEMENTATION_STATUS.md
index 6e218f2..088dbcf 100644
--- a/docs/JUPYTER_IMPLEMENTATION_STATUS.md
+++ b/docs/JUPYTER_IMPLEMENTATION_STATUS.md
@@ -68,7 +68,19 @@
    - Replaces simple sleep with proper port connectivity check
    - Returns early when kernel is ready
 
-9. **Dependencies**
+9. **Error Handling**
+   - Tracks error messages from Jupyter kernel (msg_type='error')
+   - Returns `success=False` when errors occur
+   - Populates `error` field with traceback
+   - Sets appropriate exit codes
+
+10. **Testing**
+   - Comprehensive mocking for ZMQ/Jupyter components
+   - Mocked BlockingKernelClient with message responses
+   - All 22 unit tests passing
+   - Tests cover: creation, execution, shutdown, namespace, cleanup
+
+11. **Dependencies**
    - `jupyter-client>=8.8.0` added to server dependencies
    - `ipykernel` removed from server (will be in container image)
    - `pyzmq>=27.1.0` for ZMQ support
@@ -81,49 +93,55 @@
 
 ### 🚧 In Progress / TODO
 
-1. **Restart Implementation**
-   - [ ] Use `KernelManager` instead of just `BlockingKernelClient`
-   - [ ] Proper restart via `KernelManager.restart_kernel()`
-   - [ ] Handle restart failures gracefully
-
-4. **Container Image**
+1. **Container Image**
    - [ ] Add `ipykernel` to `mcp-forge/jupyter:latest` image
    - [ ] Configure kernel to accept ZMQ connections
    - [ ] Test kernel startup in isolation
 
-5. **Testing**
-   - [ ] Update tests in `tests/execution/jupyter/test_kernel.py`
-   - [ ] Mock ZMQ connection and Jupyter messages
-   - [ ] Mock container manager for unit tests
-   - [ ] Integration tests with real containers
-   - [ ] Test port conflict handling
-   - [ ] Test connection file cleanup
+2. **Restart Implementation**
+   - [ ] Use `KernelManager` instead of just `BlockingKernelClient`
+   - [ ] Proper restart via `KernelManager.restart_kernel()`
+   - [ ] Handle restart failures gracefully
 
-6. **Error Handling**
+3. **Error Handling Improvements**
    - [ ] Port conflict resolution
    - [ ] Kernel crash detection and recovery
    - [ ] Connection timeout handling
    - [ ] Invalid connection file handling
 
-7. **Performance**
+4. **Performance**
    - [ ] Connection pooling/reuse consideration
    - [ ] Batch message processing
    - [ ] Async execution option
 
 ## Test Status
 
-Current test results: **20 failed, 2 passed**
+Current test results: **22 passed, 0 failed** ✅
 
-**Failure Reason**: Tests attempt to start real Jupyter kernels, but implementation is missing:
-- Port mappings for ZMQ
-- Connection file mounting
-- Proper readiness check
+**All unit tests passing!**
 
-**Required Actions**:
-1. Complete container configuration (ports, volumes)
-2. Update container image to include ipykernel
-3. Mock ZMQ connections in unit tests
-4. Create integration test suite with real containers
+Tests properly mock:
+- ZMQ connection and port allocation
+- Jupyter message protocol
+- BlockingKernelClient operations
+- Container manager operations
+- File system operations
+
+**Test Coverage**:
+- ✅ Kernel creation and startup
+- ✅ Code execution and results
+- ✅ Namespace persistence
+- ✅ Kernel shutdown and cleanup
+- ✅ Error handling paths
+- ✅ Multiple kernel isolation
+- ✅ Idle kernel cleanup
+- ✅ Variable introspection
+
+**Required Actions for Integration Testing**:
+1. Build container image with ipykernel
+2. Test with real Podman containers
+3. Verify actual ZMQ communication
+4. Test with real code execution
 
 ## Known Issues