diff --git a/tests/unit/fov_target_optimization_test.py b/tests/unit/fov_target_optimization_test.py
new file mode 100644
index 0000000..fce7604
--- /dev/null
+++ b/tests/unit/fov_target_optimization_test.py
@@ -0,0 +1,249 @@
+"""Unit test for #303: FOV optimization for TARGET triggers in grid.step().
+
+Tests the tiered optimization:
+  Tier 1: O(1) label check - no target_label means no FOV
+  Tier 2: O(bucket) spatial hash - only nearby entities checked
+  Tier 3: O(radius^2) bounded FOV via TCOD radius param
+  Tier 4: Per-entity FOV cache - skip recomputation when entity+map unchanged
+"""
+import mcrfpy
+import sys
+
+def make_grid(w=20, h=20):
+    """Create a walkable, transparent grid."""
+    scene = mcrfpy.Scene("test303")
+    mcrfpy.current_scene = scene
+    tex = mcrfpy.Texture("assets/kenney_tinydungeon.png", 16, 16)
+    grid = mcrfpy.Grid(grid_size=(w, h), texture=tex, pos=(0, 0), size=(320, 320))
+    scene.children.append(grid)
+    for y in range(h):
+        for x in range(w):
+            pt = grid.at(x, y)
+            pt.walkable = True
+            pt.transparent = True
+    return grid
+
+
+def test_target_trigger_fires():
+    """TARGET trigger fires when entity can see a labeled target."""
+    grid = make_grid()
+    triggered = []
+
+    hunter = mcrfpy.Entity((5, 5), grid=grid)
+    hunter.set_behavior(int(mcrfpy.Behavior.SLEEP), turns=99)
+    hunter.target_label = "prey"
+    hunter.sight_radius = 10
+    hunter.step = lambda t, d: triggered.append(("TARGET", d))
+
+    prey = mcrfpy.Entity((7, 5), grid=grid)
+    prey.labels = {"prey"}
+    prey.turn_order = 0  # skip prey's own turn
+
+    grid.step()
+    assert len(triggered) == 1, f"TARGET should fire once, got {len(triggered)}"
+    print("PASS: TARGET trigger fires on visible labeled entity")
+
+
+def test_target_trigger_blocked_by_wall():
+    """TARGET trigger does NOT fire when wall blocks line of sight."""
+    grid = make_grid()
+    triggered = []
+
+    hunter = mcrfpy.Entity((5, 5), grid=grid)
+    hunter.set_behavior(int(mcrfpy.Behavior.SLEEP), turns=99)
+    hunter.target_label = "prey"
+    hunter.sight_radius = 10
+    hunter.step = lambda t, d: triggered.append("TARGET")
+
+    # Place wall between hunter and prey
+    grid.at(6, 5).transparent = False
+
+    prey = mcrfpy.Entity((8, 5), grid=grid)
+    prey.labels = {"prey"}
+    prey.turn_order = 0
+
+    grid.step()
+    assert len(triggered) == 0, f"TARGET should NOT fire through wall, got {len(triggered)}"
+    print("PASS: TARGET blocked by opaque wall")
+
+
+def test_target_trigger_out_of_range():
+    """TARGET trigger does NOT fire when target is beyond sight_radius."""
+    grid = make_grid()
+    triggered = []
+
+    hunter = mcrfpy.Entity((2, 2), grid=grid)
+    hunter.set_behavior(int(mcrfpy.Behavior.SLEEP), turns=99)
+    hunter.target_label = "prey"
+    hunter.sight_radius = 3
+    hunter.step = lambda t, d: triggered.append("TARGET")
+
+    prey = mcrfpy.Entity((15, 15), grid=grid)
+    prey.labels = {"prey"}
+    prey.turn_order = 0
+
+    grid.step()
+    assert len(triggered) == 0, f"TARGET should NOT fire beyond sight_radius, got {len(triggered)}"
+    print("PASS: TARGET not fired beyond sight_radius")
+
+
+def test_no_target_label_skips_fov():
+    """Entity without target_label should not trigger TARGET (Tier 1 skip)."""
+    grid = make_grid()
+    triggered = []
+
+    entity = mcrfpy.Entity((5, 5), grid=grid)
+    entity.set_behavior(int(mcrfpy.Behavior.SLEEP), turns=99)
+    # No target_label set
+    entity.step = lambda t, d: triggered.append(int(t))
+
+    prey = mcrfpy.Entity((6, 5), grid=grid)
+    prey.labels = {"prey"}
+    prey.turn_order = 0
+
+    grid.step()
+    # Should get DONE eventually, but never TARGET
+    target_triggers = [t for t in triggered if t == int(mcrfpy.Trigger.TARGET)]
+    assert len(target_triggers) == 0, "No target_label = no TARGET trigger"
+    print("PASS: no target_label skips TARGET check (Tier 1)")
+
+
+def test_wrong_label_no_trigger():
+    """TARGET trigger requires matching label."""
+    grid = make_grid()
+    triggered = []
+
+    hunter = mcrfpy.Entity((5, 5), grid=grid)
+    hunter.set_behavior(int(mcrfpy.Behavior.SLEEP), turns=99)
+    hunter.target_label = "prey"
+    hunter.sight_radius = 10
+    hunter.step = lambda t, d: triggered.append("TARGET")
+
+    decoy = mcrfpy.Entity((6, 5), grid=grid)
+    decoy.labels = {"friendly"}  # Wrong label
+    decoy.turn_order = 0
+
+    grid.step()
+    assert len(triggered) == 0, "Wrong label should not trigger TARGET"
+    print("PASS: wrong label does not trigger TARGET")
+
+
+def test_fov_cache_reuse_stationary():
+    """Per-entity FOV cache should allow repeated steps without recomputation
+    when entity hasn't moved and map hasn't changed (Tier 4)."""
+    grid = make_grid()
+    trigger_count = []
+
+    hunter = mcrfpy.Entity((5, 5), grid=grid)
+    hunter.set_behavior(int(mcrfpy.Behavior.SLEEP), turns=99)
+    hunter.target_label = "prey"
+    hunter.sight_radius = 10
+    hunter.step = lambda t, d: trigger_count.append(1)
+
+    prey = mcrfpy.Entity((7, 5), grid=grid)
+    prey.labels = {"prey"}
+    prey.turn_order = 0
+
+    # Multiple steps - entity doesn't move, map doesn't change
+    # The per-entity FOV cache should be reused after the first computation
+    for _ in range(5):
+        grid.step()
+
+    assert len(trigger_count) == 5, (
+        f"TARGET should fire every step (cached FOV reuse), got {len(trigger_count)}"
+    )
+    print("PASS: FOV cache reuse for stationary entity (Tier 4)")
+
+
+def test_fov_cache_invalidated_on_transparency_change():
+    """FOV cache should invalidate when a cell's transparency changes."""
+    grid = make_grid()
+    triggered = []
+
+    hunter = mcrfpy.Entity((5, 5), grid=grid)
+    hunter.set_behavior(int(mcrfpy.Behavior.SLEEP), turns=99)
+    hunter.target_label = "prey"
+    hunter.sight_radius = 10
+    hunter.step = lambda t, d: triggered.append(1)
+
+    prey = mcrfpy.Entity((8, 5), grid=grid)
+    prey.labels = {"prey"}
+    prey.turn_order = 0
+
+    # First step: visible, should trigger
+    grid.step()
+    assert len(triggered) == 1, "Should trigger on first step"
+
+    # Block line of sight
+    grid.at(6, 5).transparent = False
+    grid.at(7, 5).transparent = False
+
+    # Second step: cache should be invalidated, FOV recomputed, no trigger
+    triggered.clear()
+    grid.step()
+    assert len(triggered) == 0, (
+        f"Should NOT trigger after wall placed, got {len(triggered)}"
+    )
+    print("PASS: FOV cache invalidated on transparency change")
+
+
+def test_multiple_hunters_independent_caches():
+    """Multiple entities with target_label should have independent FOV caches."""
+    grid = make_grid()
+    results = {"a": [], "b": []}
+
+    hunter_a = mcrfpy.Entity((3, 3), grid=grid)
+    hunter_a.set_behavior(int(mcrfpy.Behavior.SLEEP), turns=99)
+    hunter_a.target_label = "prey"
+    hunter_a.sight_radius = 5
+    hunter_a.step = lambda t, d: results["a"].append(1)
+
+    hunter_b = mcrfpy.Entity((17, 17), grid=grid)
+    hunter_b.set_behavior(int(mcrfpy.Behavior.SLEEP), turns=99)
+    hunter_b.target_label = "prey"
+    hunter_b.sight_radius = 5
+    hunter_b.step = lambda t, d: results["b"].append(1)
+
+    # Prey near hunter_a but far from hunter_b
+    prey = mcrfpy.Entity((4, 3), grid=grid)
+    prey.labels = {"prey"}
+    prey.turn_order = 0
+
+    grid.step()
+    assert len(results["a"]) == 1, "Hunter A should see prey"
+    assert len(results["b"]) == 0, "Hunter B should NOT see prey (out of range)"
+    print("PASS: multiple hunters with independent FOV caches")
+
+
+def test_target_trigger_n_rounds():
+    """TARGET fires once per round in multi-round step (n>1)."""
+    grid = make_grid()
+    triggered = []
+
+    hunter = mcrfpy.Entity((5, 5), grid=grid)
+    hunter.set_behavior(int(mcrfpy.Behavior.SLEEP), turns=99)
+    hunter.target_label = "prey"
+    hunter.sight_radius = 10
+    hunter.step = lambda t, d: triggered.append(1)
+
+    prey = mcrfpy.Entity((7, 5), grid=grid)
+    prey.labels = {"prey"}
+    prey.turn_order = 0
+
+    grid.step(n=3)
+    assert len(triggered) == 3, f"TARGET should fire 3 times for n=3, got {len(triggered)}"
+    print("PASS: TARGET fires per round in multi-round step")
+
+
+if __name__ == "__main__":
+    test_target_trigger_fires()
+    test_target_trigger_blocked_by_wall()
+    test_target_trigger_out_of_range()
+    test_no_target_label_skips_fov()
+    test_wrong_label_no_trigger()
+    test_fov_cache_reuse_stationary()
+    test_fov_cache_invalidated_on_transparency_change()
+    test_multiple_hunters_independent_caches()
+    test_target_trigger_n_rounds()
+    print("All #303 FOV optimization tests passed")
+    sys.exit(0)