diff --git a/.replit b/.replit
index 854ae92..61099cd 100644
--- a/.replit
+++ b/.replit
@@ -14,10 +14,6 @@ run = ["npm", "run", "start"]
 localPort = 5000
 externalPort = 80
 
-[[ports]]
-localPort = 33729
-externalPort = 3001
-
 [[ports]]
 localPort = 35345
 externalPort = 3002
diff --git a/client/src/components/ProjectTemplate.tsx b/client/src/components/ProjectTemplate.tsx
index c2163dd..e10195a 100644
--- a/client/src/components/ProjectTemplate.tsx
+++ b/client/src/components/ProjectTemplate.tsx
@@ -273,9 +273,14 @@ export default function ProjectTemplate({
 
   const handleSaveTask = () => {
     if (editingTaskIndex !== null) {
+      const currentTask = projectTasks[editingTaskIndex];
       const updatedTasks = [...projectTasks];
+      
+      // Check if this is a new task (temporary ID) or existing task
+      const isNewTask = currentTask.id.startsWith('temp-');
+      
       updatedTasks[editingTaskIndex] = {
-        id: projectTasks[editingTaskIndex].id,
+        id: isNewTask ? Date.now().toString() : currentTask.id,
         title: taskForm.title || 'New Task',
         description: taskForm.description || '',
         priority: taskForm.priority || 'medium',
@@ -283,6 +288,7 @@ export default function ProjectTemplate({
         estimatedHours: taskForm.estimatedHours || 0,
         labelId: taskForm.labelId
       };
+      
       setProjectTasks(updatedTasks);
     }
     
@@ -296,14 +302,41 @@ export default function ProjectTemplate({
   };
 
   const handleCancelTaskEdit = () => {
+    // If we're editing a task that has a temporary ID (new task), remove it from the list
+    if (editingTaskIndex !== null) {
+      const currentTask = projectTasks[editingTaskIndex];
+      if (currentTask.id.startsWith('temp-')) {
+        const updatedTasks = projectTasks.filter((_, index) => index !== editingTaskIndex);
+        setProjectTasks(updatedTasks);
+      }
+    }
+    
     setTaskForm({});
     setIsEditingTask(false);
     setEditingTaskIndex(null);
   };
 
   const handleStartNewTask = () => {
-    setTaskForm({});
-    setEditingTaskIndex(null);
+    // Create a temporary new task and add it to the list in edit mode
+    const tempTask: ProjectTask = {
+      id: 'temp-' + Date.now(),
+      title: '',
+      description: '',
+      priority: 'medium',
+      status: 'todo',
+      estimatedHours: 0
+    };
+    
+    const newTasks = [...projectTasks, tempTask];
+    setProjectTasks(newTasks);
+    setEditingTaskIndex(newTasks.length - 1);
+    setTaskForm({
+      title: '',
+      description: '',
+      priority: 'medium',
+      status: 'todo',
+      estimatedHours: 0
+    });
     setIsEditingTask(true);
   };
 
@@ -962,49 +995,149 @@ export default function ProjectTemplate({
                     </Button>
                   </div>
 
-                  {/* Task List */}
+                  {/* Task List with Inline Editing */}
                   <div className="space-y-2 max-h-64 overflow-y-auto">
                     {projectTasks.map((task, index) => (
-                      <Card key={task.id} className="p-3">
-                        <div className="flex items-center justify-between">
-                          <div className="flex-1">
-                            <h4 className="font-medium text-sm">{task.title}</h4>
-                            {task.description && (
-                              <p className="text-xs text-muted-foreground">{task.description}</p>
-                            )}
-                            <div className="flex items-center gap-2 mt-1">
-                              <Badge variant="outline" className="text-xs">
-                                {task.priority}
-                              </Badge>
-                              <Badge variant="outline" className="text-xs">
-                                {task.status}
-                              </Badge>
-                              {task.estimatedHours ? (
-                                <Badge variant="outline" className="text-xs">
-                                  {task.estimatedHours}h
-                                </Badge>
-                              ) : null}
+                      <Card key={task.id} className={`p-3 ${editingTaskIndex === index ? 'border-primary' : ''}`}>
+                        {editingTaskIndex === index ? (
+                          // Inline Edit Mode
+                          <div className="space-y-3">
+                            <div className="grid grid-cols-1 md:grid-cols-2 gap-3">
+                              <div className="space-y-1">
+                                <label className="text-xs font-medium text-muted-foreground">Task Title</label>
+                                <Input
+                                  value={taskForm.title || ''}
+                                  onChange={(e) => setTaskForm({...taskForm, title: e.target.value})}
+                                  placeholder="Enter task title"
+                                  className="text-sm"
+                                  data-testid={`input-inline-task-title-${index}`}
+                                />
+                              </div>
+                              
+                              <div className="space-y-1">
+                                <label className="text-xs font-medium text-muted-foreground">Description</label>
+                                <Input
+                                  value={taskForm.description || ''}
+                                  onChange={(e) => setTaskForm({...taskForm, description: e.target.value})}
+                                  placeholder="Enter task description"
+                                  className="text-sm"
+                                  data-testid={`input-inline-task-description-${index}`}
+                                />
+                              </div>
+                              
+                              <div className="space-y-1">
+                                <label className="text-xs font-medium text-muted-foreground">Priority</label>
+                                <Select
+                                  value={taskForm.priority || 'medium'}
+                                  onValueChange={(value: ProjectTask['priority']) => 
+                                    setTaskForm({...taskForm, priority: value})
+                                  }
+                                >
+                                  <SelectTrigger className="text-sm" data-testid={`select-inline-task-priority-${index}`}>
+                                    <SelectValue />
+                                  </SelectTrigger>
+                                  <SelectContent>
+                                    <SelectItem value="low">Low</SelectItem>
+                                    <SelectItem value="medium">Medium</SelectItem>
+                                    <SelectItem value="high">High</SelectItem>
+                                  </SelectContent>
+                                </Select>
+                              </div>
+                              
+                              <div className="space-y-1">
+                                <label className="text-xs font-medium text-muted-foreground">Status</label>
+                                <Select
+                                  value={taskForm.status || 'todo'}
+                                  onValueChange={(value: ProjectTask['status']) => 
+                                    setTaskForm({...taskForm, status: value})
+                                  }
+                                >
+                                  <SelectTrigger className="text-sm" data-testid={`select-inline-task-status-${index}`}>
+                                    <SelectValue />
+                                  </SelectTrigger>
+                                  <SelectContent>
+                                    <SelectItem value="todo">To Do</SelectItem>
+                                    <SelectItem value="inProgress">In Progress</SelectItem>
+                                    <SelectItem value="done">Done</SelectItem>
+                                  </SelectContent>
+                                </Select>
+                              </div>
+                              
+                              <div className="space-y-1 md:col-span-2">
+                                <label className="text-xs font-medium text-muted-foreground">Estimated Hours</label>
+                                <Input
+                                  type="number"
+                                  value={taskForm.estimatedHours || ''}
+                                  onChange={(e) => setTaskForm({...taskForm, estimatedHours: Number(e.target.value)})}
+                                  placeholder="0"
+                                  min="0"
+                                  className="text-sm max-w-32"
+                                  data-testid={`input-inline-task-hours-${index}`}
+                                />
+                              </div>
+                            </div>
+                            
+                            <div className="flex items-center gap-2 justify-end pt-2 border-t">
+                              <Button
+                                variant="outline"
+                                size="sm"
+                                onClick={handleCancelTaskEdit}
+                                data-testid={`button-cancel-inline-edit-${index}`}
+                              >
+                                Cancel
+                              </Button>
+                              <Button
+                                size="sm"
+                                onClick={handleSaveTask}
+                                disabled={!taskForm.title?.trim()}
+                                data-testid={`button-save-inline-edit-${index}`}
+                              >
+                                Save Changes
+                              </Button>
                             </div>
                           </div>
-                          <div className="flex items-center gap-1">
-                            <Button
-                              variant="ghost"
-                              size="sm"
-                              onClick={() => handleEditTask(index)}
-                              data-testid={`button-edit-task-edit-${index}`}
-                            >
-                              <Edit className="w-3 h-3" />
-                            </Button>
-                            <Button
-                              variant="ghost"
-                              size="sm"
-                              onClick={() => handleRemoveTask(index)}
-                              data-testid={`button-remove-task-edit-${index}`}
-                            >
-                              <Trash2 className="w-3 h-3" />
-                            </Button>
+                        ) : (
+                          // Display Mode
+                          <div className="flex items-center justify-between">
+                            <div className="flex-1">
+                              <h4 className="font-medium text-sm">{task.title}</h4>
+                              {task.description && (
+                                <p className="text-xs text-muted-foreground">{task.description}</p>
+                              )}
+                              <div className="flex items-center gap-2 mt-1">
+                                <Badge variant="outline" className="text-xs">
+                                  {task.priority}
+                                </Badge>
+                                <Badge variant="outline" className="text-xs">
+                                  {task.status}
+                                </Badge>
+                                {task.estimatedHours ? (
+                                  <Badge variant="outline" className="text-xs">
+                                    {task.estimatedHours}h
+                                  </Badge>
+                                ) : null}
+                              </div>
+                            </div>
+                            <div className="flex items-center gap-1">
+                              <Button
+                                variant="ghost"
+                                size="sm"
+                                onClick={() => handleEditTask(index)}
+                                data-testid={`button-edit-task-edit-${index}`}
+                              >
+                                <Edit className="w-3 h-3" />
+                              </Button>
+                              <Button
+                                variant="ghost"
+                                size="sm"
+                                onClick={() => handleRemoveTask(index)}
+                                data-testid={`button-remove-task-edit-${index}`}
+                              >
+                                <Trash2 className="w-3 h-3" />
+                              </Button>
+                            </div>
                           </div>
-                        </div>
+                        )}
                       </Card>
                     ))}
                     
@@ -1015,106 +1148,6 @@ export default function ProjectTemplate({
                     )}
                   </div>
 
-                  {/* Task Form */}
-                  {isEditingTask && (
-                    <Card className="p-4 border-primary">
-                      <div className="space-y-4">
-                        <h4 className="font-semibold text-sm">
-                          {editingTaskIndex !== null ? 'Edit Task' : 'New Task'}
-                        </h4>
-                        
-                        <div className="grid grid-cols-1 md:grid-cols-2 gap-4">
-                          <div className="space-y-2">
-                            <label className="text-sm font-medium">Task Title</label>
-                            <Input
-                              value={taskForm.title || ''}
-                              onChange={(e) => setTaskForm({...taskForm, title: e.target.value})}
-                              placeholder="Enter task title"
-                              data-testid="input-task-title-edit"
-                            />
-                          </div>
-                          
-                          <div className="space-y-2">
-                            <label className="text-sm font-medium">Description</label>
-                            <Input
-                              value={taskForm.description || ''}
-                              onChange={(e) => setTaskForm({...taskForm, description: e.target.value})}
-                              placeholder="Enter task description"
-                              data-testid="input-task-description-edit"
-                            />
-                          </div>
-                          
-                          <div className="space-y-2">
-                            <label className="text-sm font-medium">Priority</label>
-                            <Select
-                              value={taskForm.priority || 'medium'}
-                              onValueChange={(value: ProjectTask['priority']) => 
-                                setTaskForm({...taskForm, priority: value})
-                              }
-                            >
-                              <SelectTrigger data-testid="select-task-priority-edit">
-                                <SelectValue />
-                              </SelectTrigger>
-                              <SelectContent>
-                                <SelectItem value="low">Low</SelectItem>
-                                <SelectItem value="medium">Medium</SelectItem>
-                                <SelectItem value="high">High</SelectItem>
-                              </SelectContent>
-                            </Select>
-                          </div>
-                          
-                          <div className="space-y-2">
-                            <label className="text-sm font-medium">Status</label>
-                            <Select
-                              value={taskForm.status || 'todo'}
-                              onValueChange={(value: ProjectTask['status']) => 
-                                setTaskForm({...taskForm, status: value})
-                              }
-                            >
-                              <SelectTrigger data-testid="select-task-status-edit">
-                                <SelectValue />
-                              </SelectTrigger>
-                              <SelectContent>
-                                <SelectItem value="todo">To Do</SelectItem>
-                                <SelectItem value="inProgress">In Progress</SelectItem>
-                                <SelectItem value="done">Done</SelectItem>
-                              </SelectContent>
-                            </Select>
-                          </div>
-                          
-                          <div className="space-y-2">
-                            <label className="text-sm font-medium">Estimated Hours</label>
-                            <Input
-                              type="number"
-                              value={taskForm.estimatedHours || ''}
-                              onChange={(e) => setTaskForm({...taskForm, estimatedHours: Number(e.target.value)})}
-                              placeholder="0"
-                              min="0"
-                              data-testid="input-task-hours-edit"
-                            />
-                          </div>
-                        </div>
-                        
-                        <div className="flex gap-2">
-                          <Button
-                            variant="outline"
-                            onClick={handleCancelTaskEdit}
-                            className="flex-1"
-                          >
-                            Cancel
-                          </Button>
-                          <Button
-                            onClick={editingTaskIndex !== null ? handleSaveTask : handleAddTask}
-                            disabled={!taskForm.title?.trim()}
-                            className="flex-1"
-                            data-testid="button-save-task-edit"
-                          >
-                            {editingTaskIndex !== null ? 'Save Changes' : 'Add Task'}
-                          </Button>
-                        </div>
-                      </div>
-                    </Card>
-                  )}
                 </div>
               </div>
             )}