diff --git a/backend/app/db/database.py b/backend/app/db/database.py
index 323fbf9..27da919 100644
--- a/backend/app/db/database.py
+++ b/backend/app/db/database.py
@@ -1,3 +1,5 @@
+from contextlib import suppress
+
 from sqlalchemy.ext.asyncio import AsyncSession, async_sessionmaker, create_async_engine
 from sqlalchemy.orm import DeclarativeBase
 
@@ -18,6 +20,9 @@ class Base(DeclarativeBase):
 async def init_db() -> None:
     async with engine.begin() as conn:
         await conn.run_sync(Base.metadata.create_all)
+        # Add container_mode column if not present (existing databases)
+        with suppress(Exception):
+            await conn.exec_driver_sql("ALTER TABLE nodes ADD COLUMN container_mode BOOLEAN NOT NULL DEFAULT 0")
 
 
 async def get_db():
diff --git a/backend/app/db/models.py b/backend/app/db/models.py
index e90320f..5dff858 100644
--- a/backend/app/db/models.py
+++ b/backend/app/db/models.py
@@ -1,7 +1,7 @@
 import uuid
 from datetime import UTC, datetime
 
-from sqlalchemy import JSON, DateTime, Float, ForeignKey, Integer, String, Text
+from sqlalchemy import JSON, Boolean, DateTime, Float, ForeignKey, Integer, String, Text
 from sqlalchemy.orm import Mapped, mapped_column, relationship
 
 from app.db.database import Base
@@ -33,6 +33,7 @@ class Node(Base):
     pos_x: Mapped[float] = mapped_column(Float, default=0)
     pos_y: Mapped[float] = mapped_column(Float, default=0)
     parent_id: Mapped[str | None] = mapped_column(String, ForeignKey("nodes.id"))
+    container_mode: Mapped[bool] = mapped_column(Boolean, default=False)
     last_seen: Mapped[datetime | None] = mapped_column(DateTime(timezone=True))
     response_time_ms: Mapped[int | None] = mapped_column(Integer)
     created_at: Mapped[datetime] = mapped_column(DateTime(timezone=True), default=_now)
diff --git a/backend/app/schemas/canvas.py b/backend/app/schemas/canvas.py
index ee503f3..9429f62 100644
--- a/backend/app/schemas/canvas.py
+++ b/backend/app/schemas/canvas.py
@@ -20,6 +20,7 @@ class NodeSave(BaseModel):
     services: list[Any] = []
     notes: str | None = None
     parent_id: str | None = None
+    container_mode: bool = False
     pos_x: float = 0
     pos_y: float = 0
 
diff --git a/backend/app/schemas/nodes.py b/backend/app/schemas/nodes.py
index 4f6a6b7..65592f4 100644
--- a/backend/app/schemas/nodes.py
+++ b/backend/app/schemas/nodes.py
@@ -19,6 +19,7 @@ class NodeBase(BaseModel):
     pos_x: float = 0
     pos_y: float = 0
     parent_id: str | None = None
+    container_mode: bool = False
 
 
 class NodeCreate(NodeBase):
@@ -39,6 +40,7 @@ class NodeUpdate(BaseModel):
     notes: str | None = None
     pos_x: float | None = None
     pos_y: float | None = None
+    container_mode: bool | None = None
 
 
 class NodeResponse(NodeBase):
diff --git a/frontend/src/App.tsx b/frontend/src/App.tsx
index ff4b699..e42b669 100644
--- a/frontend/src/App.tsx
+++ b/frontend/src/App.tsx
@@ -1,5 +1,5 @@
 import { useEffect, useCallback, useRef, useState } from 'react'
-import { ReactFlowProvider, type Connection } from '@xyflow/react'
+import { ReactFlowProvider, type Connection, type Edge } from '@xyflow/react'
 import { type Node } from '@xyflow/react'
 import { applyDagreLayout } from '@/utils/layout'
 import { exportToPng } from '@/utils/export'
@@ -22,7 +22,7 @@ import { useStatusPolling } from '@/hooks/useStatusPolling'
 import type { NodeData, EdgeData } from '@/types'
 
 export default function App() {
-  const { loadCanvas, markSaved, selectedNodeId, addNode, updateNode, onConnect, nodes, edges } = useCanvasStore()
+  const { loadCanvas, markSaved, selectedNodeId, addNode, updateNode, onConnect, updateEdge, deleteEdge, setProxmoxContainerMode, nodes, edges } = useCanvasStore()
   const canvasRef = useRef<HTMLDivElement>(null)
   const { isAuthenticated } = useAuthStore()
 
@@ -31,6 +31,7 @@ export default function App() {
   const [addNodeOpen, setAddNodeOpen] = useState(false)
   const [editNodeId, setEditNodeId] = useState<string | null>(null)
   const [pendingConnection, setPendingConnection] = useState<Connection | null>(null)
+  const [editEdgeId, setEditEdgeId] = useState<string | null>(null)
   const [scanConfigOpen, setScanConfigOpen] = useState(false)
 
   // Declare handleSave before the Ctrl+S effect so it is in scope
@@ -50,6 +51,7 @@ export default function App() {
         services: n.data.services ?? [],
         notes: n.data.notes ?? null,
         parent_id: n.data.parent_id ?? null,
+        container_mode: n.data.container_mode ?? false,
         pos_x: n.position.x,
         pos_y: n.position.y,
       }))
@@ -81,14 +83,23 @@ export default function App() {
       .then((res) => {
         const { nodes: apiNodes, edges: apiEdges } = res.data
         if (apiNodes.length > 0) {
-          const rfNodes = apiNodes.map((n: NodeData & { id: string; pos_x: number; pos_y: number; parent_id?: string }) => ({
-            id: n.id,
-            type: n.type,
-            position: { x: n.pos_x, y: n.pos_y },
-            data: n,
-            ...(n.parent_id ? { parentId: n.parent_id, extent: 'parent' as const } : {}),
-            ...(n.type === 'proxmox' ? { width: 300, height: 200 } : {}),
-          }))
+          // Build a map of proxmox container mode to know if children should be nested
+          const proxmoxContainerMap = new Map<string, boolean>(
+            apiNodes
+              .filter((n: NodeData & { id: string }) => n.type === 'proxmox')
+              .map((n: NodeData & { id: string }) => [n.id, n.container_mode !== false])
+          )
+          const rfNodes = apiNodes.map((n: NodeData & { id: string; pos_x: number; pos_y: number; parent_id?: string }) => {
+            const parentIsContainer = n.parent_id ? (proxmoxContainerMap.get(n.parent_id) ?? false) : false
+            return {
+              id: n.id,
+              type: n.type,
+              position: { x: n.pos_x, y: n.pos_y },
+              data: n,
+              ...(n.parent_id && parentIsContainer ? { parentId: n.parent_id, extent: 'parent' as const } : {}),
+              ...(n.type === 'proxmox' && n.container_mode !== false ? { width: 300, height: 200 } : {}),
+            }
+          })
           const rfEdges = apiEdges.map((e: EdgeData & { id: string; source: string; target: string }) => ({
             id: e.id,
             source: e.source,
@@ -144,8 +155,12 @@ export default function App() {
   const handleUpdateNode = useCallback((data: Partial<NodeData>) => {
     if (!editNodeId) return
     updateNode(editNodeId, data)
+    // If proxmox container_mode changed, apply structural changes (children parentId, node dimensions)
+    if (data.type === 'proxmox' && typeof data.container_mode === 'boolean') {
+      setProxmoxContainerMode(editNodeId, data.container_mode)
+    }
     setEditNodeId(null)
-  }, [editNodeId, updateNode])
+  }, [editNodeId, updateNode, setProxmoxContainerMode])
 
   const handleAutoLayout = useCallback(() => {
     const laid = applyDagreLayout(nodes, edges)
@@ -174,7 +189,24 @@ export default function App() {
     setPendingConnection(null)
   }, [pendingConnection, onConnect])
 
+  const handleEdgeDoubleClick = useCallback((edge: Edge<EdgeData>) => {
+    setEditEdgeId(edge.id)
+  }, [])
+
+  const handleEdgeUpdate = useCallback((data: EdgeData) => {
+    if (!editEdgeId) return
+    updateEdge(editEdgeId, data)
+    setEditEdgeId(null)
+  }, [editEdgeId, updateEdge])
+
+  const handleEdgeDelete = useCallback(() => {
+    if (!editEdgeId) return
+    deleteEdge(editEdgeId)
+    setEditEdgeId(null)
+  }, [editEdgeId, deleteEdge])
+
   const editNode = editNodeId ? nodes.find((n) => n.id === editNodeId) : null
+  const editEdge = editEdgeId ? edges.find((e) => e.id === editEdgeId) : null
 
   if (!isAuthenticated) return <LoginPage />
 
@@ -195,7 +227,7 @@ export default function App() {
             />
             <div className="flex flex-1 min-h-0">
               <div ref={canvasRef} className="flex-1 min-w-0 h-full">
-                <CanvasContainer onConnect={handleEdgeConnect} />
+                <CanvasContainer onConnect={handleEdgeConnect} onEdgeDoubleClick={handleEdgeDoubleClick} />
               </div>
               {selectedNodeId && <DetailPanel onEdit={handleEditNode} />}
             </div>
@@ -227,6 +259,16 @@ export default function App() {
           onSubmit={handleEdgeConfirm}
         />
 
+        <EdgeModal
+          key={editEdgeId ?? 'edge-edit'}
+          open={!!editEdgeId}
+          onClose={() => setEditEdgeId(null)}
+          onSubmit={handleEdgeUpdate}
+          onDelete={handleEdgeDelete}
+          initial={editEdge?.data}
+          title="Edit Link"
+        />
+
         <ScanConfigModal
           open={scanConfigOpen}
           onClose={() => setScanConfigOpen(false)}
diff --git a/frontend/src/components/canvas/CanvasContainer.tsx b/frontend/src/components/canvas/CanvasContainer.tsx
index 893b8e7..bd29964 100644
--- a/frontend/src/components/canvas/CanvasContainer.tsx
+++ b/frontend/src/components/canvas/CanvasContainer.tsx
@@ -1,4 +1,4 @@
-import { useCallback } from 'react'
+import { useCallback, useMemo } from 'react'
 import {
   ReactFlow,
   Background,
@@ -17,9 +17,10 @@ import type { NodeData, EdgeData } from '@/types'
 
 interface CanvasContainerProps {
   onConnect?: (connection: Connection) => void
+  onEdgeDoubleClick?: (edge: Edge<EdgeData>) => void
 }
 
-export function CanvasContainer({ onConnect: onConnectProp }: CanvasContainerProps) {
+export function CanvasContainer({ onConnect: onConnectProp, onEdgeDoubleClick }: CanvasContainerProps) {
   const {
     nodes, edges,
     onNodesChange, onEdgesChange,
@@ -34,16 +35,38 @@ export function CanvasContainer({ onConnect: onConnectProp }: CanvasContainerPro
     setSelectedNode(null)
   }, [setSelectedNode])
 
+  const handleEdgeDoubleClick = useCallback((_: React.MouseEvent, edge: Edge<EdgeData>) => {
+    onEdgeDoubleClick?.(edge)
+  }, [onEdgeDoubleClick])
+
+  // Hide edges between a container-mode proxmox and its direct children
+  const visibleEdges = useMemo(() => {
+    const containerIds = new Set(
+      nodes
+        .filter((n) => n.type === 'proxmox' && n.data.container_mode !== false)
+        .map((n) => n.id)
+    )
+    const childParentMap = new Map(
+      nodes.filter((n) => n.data.parent_id).map((n) => [n.id, n.data.parent_id as string])
+    )
+    return (edges as Edge<EdgeData>[]).filter((e) => {
+      if (containerIds.has(e.source) && childParentMap.get(e.target) === e.source) return false
+      if (containerIds.has(e.target) && childParentMap.get(e.source) === e.target) return false
+      return true
+    })
+  }, [nodes, edges])
+
   return (
     <div className="w-full h-full">
       <ReactFlow
         nodes={nodes}
-        edges={edges as Edge<EdgeData>[]}
+        edges={visibleEdges}
         onNodesChange={onNodesChange}
         onEdgesChange={onEdgesChange}
         onConnect={onConnectProp}
         onNodeClick={onNodeClick}
         onPaneClick={onPaneClick}
+        onEdgeDoubleClick={handleEdgeDoubleClick}
         nodeTypes={nodeTypes}
         edgeTypes={edgeTypes}
         snapToGrid
diff --git a/frontend/src/components/canvas/nodes/ProxmoxGroupNode.tsx b/frontend/src/components/canvas/nodes/ProxmoxGroupNode.tsx
index 2d744e7..51cf764 100644
--- a/frontend/src/components/canvas/nodes/ProxmoxGroupNode.tsx
+++ b/frontend/src/components/canvas/nodes/ProxmoxGroupNode.tsx
@@ -1,6 +1,7 @@
 import { Handle, Position, NodeResizer, type NodeProps, type Node } from '@xyflow/react'
 import { Layers } from 'lucide-react'
 import type { NodeData, NodeStatus } from '@/types'
+import { BaseNode } from './BaseNode'
 
 const STATUS_COLORS: Record<NodeStatus, string> = {
   online: '#39d353',
@@ -11,7 +12,14 @@ const STATUS_COLORS: Record<NodeStatus, string> = {
 
 const GLOW = '#ff6e00'
 
-export function ProxmoxGroupNode({ data, selected }: NodeProps<Node<NodeData>>) {
+export function ProxmoxGroupNode(props: NodeProps<Node<NodeData>>) {
+  const { data, selected } = props
+
+  // Render as a regular node when container mode is disabled
+  if (data.container_mode === false) {
+    return <BaseNode {...props} icon={Layers} glowColor={GLOW} />
+  }
+
   const statusColor = STATUS_COLORS[data.status]
   const isOnline = data.status === 'online'
 
diff --git a/frontend/src/components/modals/EdgeModal.tsx b/frontend/src/components/modals/EdgeModal.tsx
index 4295426..cfb6a71 100644
--- a/frontend/src/components/modals/EdgeModal.tsx
+++ b/frontend/src/components/modals/EdgeModal.tsx
@@ -12,12 +12,15 @@ interface EdgeModalProps {
   open: boolean
   onClose: () => void
   onSubmit: (data: EdgeData) => void
+  onDelete?: () => void
+  initial?: Partial<EdgeData>
+  title?: string
 }
 
-export function EdgeModal({ open, onClose, onSubmit }: EdgeModalProps) {
-  const [type, setType] = useState<EdgeType>('ethernet')
-  const [label, setLabel] = useState('')
-  const [vlanId, setVlanId] = useState('')
+export function EdgeModal({ open, onClose, onSubmit, onDelete, initial, title = 'Connect Nodes' }: EdgeModalProps) {
+  const [type, setType] = useState<EdgeType>(initial?.type ?? 'ethernet')
+  const [label, setLabel] = useState(initial?.label ?? '')
+  const [vlanId, setVlanId] = useState(initial?.vlan_id?.toString() ?? '')
 
   const handleSubmit = (e: React.FormEvent) => {
     e.preventDefault()
@@ -27,16 +30,18 @@ export function EdgeModal({ open, onClose, onSubmit }: EdgeModalProps) {
       vlan_id: type === 'vlan' && vlanId ? parseInt(vlanId) : undefined,
     })
     onClose()
-    setType('ethernet')
-    setLabel('')
-    setVlanId('')
+  }
+
+  const handleDelete = () => {
+    onDelete?.()
+    onClose()
   }
 
   return (
     <Dialog open={open} onOpenChange={(o) => !o && onClose()}>
       <DialogContent className="bg-[#161b22] border-[#30363d] text-foreground max-w-xs">
         <DialogHeader>
-          <DialogTitle className="text-sm font-semibold">Connect Nodes</DialogTitle>
+          <DialogTitle className="text-sm font-semibold">{title}</DialogTitle>
         </DialogHeader>
 
         <form onSubmit={handleSubmit} className="flex flex-col gap-3 mt-2">
@@ -79,11 +84,18 @@ export function EdgeModal({ open, onClose, onSubmit }: EdgeModalProps) {
             />
           </div>
 
-          <div className="flex justify-end gap-2 pt-1">
-            <Button type="button" variant="ghost" size="sm" onClick={onClose}>Cancel</Button>
-            <Button type="submit" size="sm" className="bg-[#00d4ff] text-[#0d1117] hover:bg-[#00d4ff]/90">
-              Connect
-            </Button>
+          <div className="flex justify-between gap-2 pt-1">
+            {onDelete ? (
+              <Button type="button" variant="ghost" size="sm" className="text-[#f85149] hover:text-[#f85149] hover:bg-[#f85149]/10" onClick={handleDelete}>
+                Delete
+              </Button>
+            ) : <span />}
+            <div className="flex gap-2">
+              <Button type="button" variant="ghost" size="sm" onClick={onClose}>Cancel</Button>
+              <Button type="submit" size="sm" className="bg-[#00d4ff] text-[#0d1117] hover:bg-[#00d4ff]/90">
+                {onDelete ? 'Save' : 'Connect'}
+              </Button>
+            </div>
           </div>
         </form>
       </DialogContent>
diff --git a/frontend/src/components/modals/NodeModal.tsx b/frontend/src/components/modals/NodeModal.tsx
index a060b91..7713591 100644
--- a/frontend/src/components/modals/NodeModal.tsx
+++ b/frontend/src/components/modals/NodeModal.tsx
@@ -18,6 +18,7 @@ const DEFAULT_DATA: Partial<NodeData> = {
   status: 'unknown',
   check_method: 'ping',
   services: [],
+  container_mode: true,
 }
 
 interface NodeModalProps {
@@ -153,6 +154,29 @@ export function NodeModal({ open, onClose, onSubmit, initial, title = 'Add Node'
               </div>
             )}
 
+            {/* Container mode (proxmox only) */}
+            {form.type === 'proxmox' && (
+              <div className="flex items-center justify-between col-span-2 py-1">
+                <div className="flex flex-col gap-0.5">
+                  <Label className="text-xs text-muted-foreground">Container Mode</Label>
+                  <span className="text-[10px] text-muted-foreground/60">Show VM/LXC nodes nested inside</span>
+                </div>
+                <button
+                  type="button"
+                  role="switch"
+                  aria-checked={!!form.container_mode}
+                  onClick={() => set('container_mode', !form.container_mode)}
+                  className="relative inline-flex h-5 w-9 shrink-0 cursor-pointer items-center rounded-full border-2 border-transparent transition-colors focus:outline-none"
+                  style={{ background: form.container_mode ? '#ff6e00' : '#30363d' }}
+                >
+                  <span
+                    className="pointer-events-none inline-block h-4 w-4 rounded-full bg-white shadow-sm transition-transform"
+                    style={{ transform: form.container_mode ? 'translateX(16px)' : 'translateX(0)' }}
+                  />
+                </button>
+              </div>
+            )}
+
             {/* Notes */}
             <div className="flex flex-col gap-1.5 col-span-2">
               <Label className="text-xs text-muted-foreground">Notes</Label>
diff --git a/frontend/src/stores/canvasStore.ts b/frontend/src/stores/canvasStore.ts
index f298366..b54965c 100644
--- a/frontend/src/stores/canvasStore.ts
+++ b/frontend/src/stores/canvasStore.ts
@@ -24,6 +24,9 @@ interface CanvasState {
   addNode: (node: Node<NodeData>) => void
   updateNode: (id: string, data: Partial<NodeData>) => void
   deleteNode: (id: string) => void
+  updateEdge: (id: string, data: Partial<EdgeData>) => void
+  deleteEdge: (id: string) => void
+  setProxmoxContainerMode: (proxmoxId: string, enabled: boolean) => void
   markSaved: () => void
   loadCanvas: (nodes: Node<NodeData>[], edges: Edge<EdgeData>[]) => void
 }
@@ -83,6 +86,44 @@ export const useCanvasStore = create<CanvasState>((set) => ({
       hasUnsavedChanges: true,
     })),
 
+  updateEdge: (id, data) =>
+    set((state) => ({
+      edges: state.edges.map((e) =>
+        e.id === id ? { ...e, type: data.type ?? e.type, data: { ...e.data, ...data } as EdgeData } : e
+      ),
+      hasUnsavedChanges: true,
+    })),
+
+  deleteEdge: (id) =>
+    set((state) => ({
+      edges: state.edges.filter((e) => e.id !== id),
+      hasUnsavedChanges: true,
+    })),
+
+  setProxmoxContainerMode: (proxmoxId, enabled) =>
+    set((state) => {
+      let nodes = state.nodes.map((n) => {
+        if (n.id === proxmoxId) {
+          const withMode = { ...n, data: { ...n.data, container_mode: enabled } }
+          return enabled
+            ? { ...withMode, width: 300, height: 200 }
+            : { ...withMode, width: undefined, height: undefined }
+        }
+        if (n.data.parent_id === proxmoxId) {
+          return enabled
+            ? { ...n, parentId: proxmoxId, extent: 'parent' as const }
+            : { ...n, parentId: undefined, extent: undefined }
+        }
+        return n
+      })
+      if (enabled) {
+        const parents = nodes.filter((n) => !n.parentId)
+        const children = nodes.filter((n) => !!n.parentId)
+        nodes = [...parents, ...children]
+      }
+      return { nodes, hasUnsavedChanges: true }
+    }),
+
   markSaved: () => set({ hasUnsavedChanges: false }),
 
   loadCanvas: (nodes, edges) => {
diff --git a/frontend/src/types/index.ts b/frontend/src/types/index.ts
index f70050b..a3c9433 100644
--- a/frontend/src/types/index.ts
+++ b/frontend/src/types/index.ts
@@ -40,6 +40,7 @@ export interface NodeData extends Record<string, unknown> {
   response_time_ms?: number
   notes?: string
   parent_id?: string
+  container_mode?: boolean
 }
 
 export interface EdgeData extends Record<string, unknown> {