diff --git a/static/js/button-generator/effects/background-external-image.js b/static/js/button-generator/effects/background-external-image.js
new file mode 100644
index 0000000..1e9fbf6
--- /dev/null
+++ b/static/js/button-generator/effects/background-external-image.js
@@ -0,0 +1,248 @@
+import { ButtonEffect } from '../effect-base.js';
+
+/**
+ * External Image Background Effect
+ * Loads an external image from a URL and displays it as the background
+ */
+export class ExternalImageBackgroundEffect extends ButtonEffect {
+  constructor() {
+    super({
+      id: 'bg-external-image',
+      name: 'External Image Background',
+      type: 'background',
+      category: 'Background',
+      renderOrder: 1
+    });
+
+    // Cache for loaded images
+    this.imageCache = new Map();
+    this.loadingImages = new Map();
+    this.generator = null;
+
+    // Set up event listener for image loads
+    this.boundImageLoadHandler = this.handleImageLoad.bind(this);
+    window.addEventListener('imageLoaded', this.boundImageLoadHandler);
+  }
+
+  /**
+   * Handle image load event
+   */
+  handleImageLoad() {
+    // Trigger a redraw if we have a generator reference
+    if (this.generator) {
+      this.generator.updatePreview();
+    }
+  }
+
+  defineControls() {
+    return [
+      {
+        id: 'bg-image-url',
+        type: 'text',
+        label: 'Image URL',
+        defaultValue: '',
+        showWhen: 'bg-type',
+        description: 'URL of the image to use as background'
+      },
+      {
+        id: 'bg-image-fit',
+        type: 'select',
+        label: 'Image Fit',
+        defaultValue: 'cover',
+        options: [
+          { value: 'cover', label: 'Cover (fill, crop if needed)' },
+          { value: 'contain', label: 'Contain (fit inside)' },
+          { value: 'stretch', label: 'Stretch (may distort)' },
+          { value: 'center', label: 'Center (actual size)' }
+        ],
+        showWhen: 'bg-type',
+        description: 'How the image should fit in the canvas'
+      },
+      {
+        id: 'bg-image-opacity',
+        type: 'range',
+        label: 'Image Opacity',
+        defaultValue: 1,
+        min: 0,
+        max: 1,
+        step: 0.05,
+        showWhen: 'bg-type',
+        description: 'Transparency of the background image'
+      }
+    ];
+  }
+
+  isEnabled(controlValues) {
+    return controlValues['bg-type'] === 'external-image';
+  }
+
+  /**
+   * Start loading an image from a URL with caching
+   * Triggers async loading but returns immediately
+   * @param {string} url - Image URL
+   */
+  startLoadingImage(url) {
+    // Skip if already cached or loading
+    if (this.imageCache.has(url) || this.loadingImages.has(url)) {
+      return;
+    }
+
+    // Mark as loading to prevent duplicate requests
+    this.loadingImages.set(url, true);
+
+    const img = new Image();
+
+    img.onload = () => {
+      this.imageCache.set(url, img);
+      this.loadingImages.delete(url);
+      // Trigger a redraw when image loads
+      const event = new CustomEvent('imageLoaded');
+      window.dispatchEvent(event);
+    };
+
+    img.onerror = () => {
+      // Cache the error state to prevent retry spam
+      this.imageCache.set(url, 'ERROR');
+      this.loadingImages.delete(url);
+      // Trigger a redraw to show error state
+      const event = new CustomEvent('imageLoaded');
+      window.dispatchEvent(event);
+    };
+
+    img.src = url;
+  }
+
+  /**
+   * Get cached image if available
+   * @param {string} url - Image URL
+   * @returns {HTMLImageElement|string|null} Image element, 'ERROR', or null
+   */
+  getCachedImage(url) {
+    return this.imageCache.get(url) || null;
+  }
+
+  /**
+   * Draw image with the specified fit mode
+   */
+  drawImage(context, img, fitMode, opacity, width, height) {
+    context.globalAlpha = opacity;
+
+    const imgRatio = img.width / img.height;
+    const canvasRatio = width / height;
+
+    let drawX = 0;
+    let drawY = 0;
+    let drawWidth = width;
+    let drawHeight = height;
+
+    switch (fitMode) {
+      case 'cover':
+        // Fill the canvas, cropping if necessary
+        if (imgRatio > canvasRatio) {
+          // Image is wider, fit height
+          drawHeight = height;
+          drawWidth = height * imgRatio;
+          drawX = (width - drawWidth) / 2;
+        } else {
+          // Image is taller, fit width
+          drawWidth = width;
+          drawHeight = width / imgRatio;
+          drawY = (height - drawHeight) / 2;
+        }
+        break;
+
+      case 'contain':
+        // Fit inside the canvas, showing all of the image
+        if (imgRatio > canvasRatio) {
+          // Image is wider, fit width
+          drawWidth = width;
+          drawHeight = width / imgRatio;
+          drawY = (height - drawHeight) / 2;
+        } else {
+          // Image is taller, fit height
+          drawHeight = height;
+          drawWidth = height * imgRatio;
+          drawX = (width - drawWidth) / 2;
+        }
+        break;
+
+      case 'center':
+        // Center the image at actual size
+        drawWidth = img.width;
+        drawHeight = img.height;
+        drawX = (width - drawWidth) / 2;
+        drawY = (height - drawHeight) / 2;
+        break;
+
+      case 'stretch':
+        // Stretch to fill (default values already set)
+        break;
+    }
+
+    context.drawImage(img, drawX, drawY, drawWidth, drawHeight);
+    context.globalAlpha = 1; // Reset alpha
+  }
+
+  apply(context, controlValues, animState, renderData) {
+    const url = controlValues['bg-image-url'] || '';
+    const fitMode = controlValues['bg-image-fit'] || 'cover';
+    const opacity = controlValues['bg-image-opacity'] ?? 1;
+
+    // If no URL provided, fill with a placeholder color
+    if (!url.trim()) {
+      context.fillStyle = '#cccccc';
+      context.fillRect(0, 0, renderData.width, renderData.height);
+
+      // Draw placeholder text
+      context.fillStyle = '#666666';
+      context.font = '8px Arial';
+      context.textAlign = 'center';
+      context.textBaseline = 'middle';
+      context.fillText('Enter image URL', renderData.centerX, renderData.centerY);
+      return;
+    }
+
+    // Start loading if not already cached or loading
+    const cachedImage = this.getCachedImage(url);
+
+    if (!cachedImage) {
+      // Not cached yet - start loading
+      this.startLoadingImage(url);
+
+      // Draw loading state
+      context.fillStyle = '#3498db';
+      context.fillRect(0, 0, renderData.width, renderData.height);
+
+      context.fillStyle = '#ffffff';
+      context.font = '6px Arial';
+      context.textAlign = 'center';
+      context.textBaseline = 'middle';
+      context.fillText('Loading...', renderData.centerX, renderData.centerY);
+      return;
+    }
+
+    if (cachedImage === 'ERROR') {
+      // Failed to load
+      context.fillStyle = '#ff6b6b';
+      context.fillRect(0, 0, renderData.width, renderData.height);
+
+      context.fillStyle = '#ffffff';
+      context.font = '6px Arial';
+      context.textAlign = 'center';
+      context.textBaseline = 'middle';
+      context.fillText('Failed to load', renderData.centerX, renderData.centerY - 4);
+      context.fillText('image', renderData.centerX, renderData.centerY + 4);
+      return;
+    }
+
+    // Image is loaded - draw it
+    this.drawImage(context, cachedImage, fitMode, opacity, renderData.width, renderData.height);
+  }
+}
+
+// Auto-register effect
+export function register(generator) {
+  const effect = new ExternalImageBackgroundEffect();
+  effect.generator = generator; // Store reference for redraws
+  generator.registerEffect(effect);
+}
diff --git a/static/js/button-generator/effects/background-solid.js b/static/js/button-generator/effects/background-solid.js
index f16cc68..49c2954 100644
--- a/static/js/button-generator/effects/background-solid.js
+++ b/static/js/button-generator/effects/background-solid.js
@@ -25,7 +25,8 @@ export class SolidBackgroundEffect extends ButtonEffect {
           { value: 'solid', label: 'Solid Color' },
           { value: 'gradient', label: 'Gradient' },
           { value: 'texture', label: 'Texture' },
-          { value: 'emoji-wallpaper', label: 'Emoji Wallpaper' }
+          { value: 'emoji-wallpaper', label: 'Emoji Wallpaper' },
+          { value: 'external-image', label: 'External Image' }
         ]
       },
       {
diff --git a/static/js/button-generator/main.js b/static/js/button-generator/main.js
index 51233e8..c6061dc 100644
--- a/static/js/button-generator/main.js
+++ b/static/js/button-generator/main.js
@@ -13,6 +13,7 @@ import * as solidBg from "./effects/background-solid.js";
 import * as gradientBg from "./effects/background-gradient.js";
 import * as textureBg from "./effects/background-texture.js";
 import * as emojiWallpaper from "./effects/background-emoji-wallpaper.js";
+import * as externalImage from "./effects/background-external-image.js";
 import * as rainbowBg from "./effects/background-rainbow.js";
 import * as rain from "./effects/background-rain.js";
 import * as starfield from "./effects/background-starfield.js";
@@ -88,6 +89,7 @@ async function setupApp() {
   gradientBg.register(generator);
   textureBg.register(generator);
   emojiWallpaper.register(generator);
+  externalImage.register(generator);
   rainbowBg.register(generator);
   rain.register(generator);
   starfield.register(generator);
diff --git a/static/js/button-generator/ui-builder.js b/static/js/button-generator/ui-builder.js
index 00ce430..afafbbe 100644
--- a/static/js/button-generator/ui-builder.js
+++ b/static/js/button-generator/ui-builder.js
@@ -418,7 +418,11 @@ export class UIBuilder {
     input.type = 'text';
     input.id = id;
     input.value = defaultValue || '';
-    input.maxLength = 20;
+
+    // Only set maxLength for text inputs that aren't URLs
+    if (id !== 'bg-image-url') {
+      input.maxLength = 20;
+    }
 
     container.appendChild(labelEl);
     container.appendChild(input);
@@ -464,6 +468,8 @@ export class UIBuilder {
                 control.style.display = triggerControl.value === 'texture' ? 'block' : 'none';
               } else if (controlId && (controlId.startsWith('emoji-') || controlId === 'emoji-text')) {
                 control.style.display = triggerControl.value === 'emoji-wallpaper' ? 'block' : 'none';
+              } else if (controlId && (controlId.startsWith('bg-image-') || controlId === 'bg-image-url' || controlId === 'bg-image-fit' || controlId === 'bg-image-opacity')) {
+                control.style.display = triggerControl.value === 'external-image' ? 'block' : 'none';
               }
             }
             // For text color controls