diff --git a/prd.json b/prd.json
index d12839d..90f4662 100644
--- a/prd.json
+++ b/prd.json
@@ -181,7 +181,7 @@
         "Typecheck passes"
       ],
       "priority": 10,
-      "passes": false,
+      "passes": true,
       "notes": "Dependencies: US-054, US-058, US-059"
     },
     {
diff --git a/progress.txt b/progress.txt
index dea5ea5..52f252f 100644
--- a/progress.txt
+++ b/progress.txt
@@ -41,6 +41,8 @@
 - `Condition.value` supports `number | string | boolean` — always check variable type before rendering value inputs for edge conditions.
 - `OptionConditionEditor` at `src/components/editor/OptionConditionEditor.tsx` handles choice option conditions. Same pattern as `ConditionEditor` but with simpler props (no edgeId).
 - `ChoiceOption` type includes optional `condition?: Condition`. When counting variable usage, check variable nodes + edge conditions + choice option conditions.
+- React Compiler lint forbids `setState` in effects and reading `useRef().current` during render. Use `useState(() => computeValue())` lazy initializer pattern for one-time initialization logic.
+- For detecting legacy data shape (pre-migration), pass a flag from the server component (page.tsx) to the client component, since only the server reads raw DB data.
 
 ---
 
@@ -151,3 +153,18 @@
   - The `getVariableUsageCount` in FlowchartEditor now counts three sources: variable nodes, edge conditions, and choice option conditions
   - No browser testing tools are available; manual verification is needed.
 ---
+
+## 2026-01-23 - US-062
+- What was implemented: Auto-migration of existing free-text speaker/variable values to character/variable definitions on project load
+- Files changed:
+  - `src/app/editor/[projectId]/page.tsx` - Added `needsMigration` flag that detects whether raw DB data has characters/variables arrays
+  - `src/app/editor/[projectId]/FlowchartEditor.tsx` - Added `computeMigration()` helper function and `needsMigration` prop; migration result initializes state directly via lazy `useState` to avoid React Compiler lint issues
+  - `src/components/editor/nodes/DialogueNode.tsx` - Included pre-existing US-058 changes (speaker dropdown with Combobox) that were not previously committed
+- **Learnings for future iterations:**
+  - React Compiler lint (`react-hooks/set-state-in-effect`) forbids calling `setState` synchronously within `useEffect`. For one-time initialization logic, compute the result and use it directly in state initializers instead.
+  - React Compiler lint (`react-hooks/refs`) forbids reading `useRef().current` during render. Use `useState(() => ...)` lazy initializer pattern instead of `useRef` for values computed once at mount.
+  - The migration detection relies on `rawData.characters` being `undefined` (old projects) vs `[]` (migrated projects). The `page.tsx` server component passes `needsMigration` flag to the client component since only the server has access to the raw DB shape.
+  - `computeMigration` is a pure function called outside the component render cycle (via lazy useState). It uses `nanoid()` for IDs, so it must only be called once — lazy `useState` ensures this.
+  - The toast message for migration is set as initial state, so it shows immediately on first render without needing an effect.
+  - No browser testing tools are available; manual verification is needed.
+---