diff --git a/features/steps/ticket_steps.py b/features/steps/ticket_steps.py
index 276eb27..92b75a3 100644
--- a/features/steps/ticket_steps.py
+++ b/features/steps/ticket_steps.py
@@ -424,6 +424,15 @@ def step_created_ticket_contains(context, text):
     assert text in content, f"Ticket does not contain '{text}'\nContent: {content}"
 
 
+@then(r'the created ticket should not contain "(?P<text>[^"]+)"')
+def step_created_ticket_not_contains(context, text):
+    """Assert the most recently created ticket does not contain text."""
+    ticket_id = context.last_created_id
+    ticket_path = Path(context.test_dir) / '.tickets' / f'{ticket_id}.md'
+    content = ticket_path.read_text()
+    assert text not in content, f"Ticket should not contain '{text}'\nContent: {content}"
+
+
 @then(r'the created ticket should have field "(?P<field>[^"]+)" with value "(?P<value>[^"]+)"')
 def step_created_ticket_has_field(context, field, value):
     """Assert the most recently created ticket has a field with value."""
diff --git a/features/ticket_creation.feature b/features/ticket_creation.feature
index 7cc0776..eb2d944 100644
--- a/features/ticket_creation.feature
+++ b/features/ticket_creation.feature
@@ -96,3 +96,14 @@ Feature: Ticket Creation
     When I run "ticket create 'First ticket'"
     Then the command should succeed
     And the tickets directory should exist
+
+  Scenario: Design headings are adjusted to proper nesting level
+    When I run "ticket create 'Design doc' --design '# Main Plan\n\nThis is the plan.\n\n## Section 1\n\nDetails here.'"
+    Then the command should succeed
+    And the created ticket should contain "### Main Plan"
+    And the created ticket should contain "#### Section 1"
+
+  Scenario: Design without headings is unchanged
+    When I run "ticket create 'Simple design' --design 'Just plain text here'"
+    Then the command should succeed
+    And the created ticket should contain "Just plain text here"
diff --git a/ticket b/ticket
index 452adda..2248f46 100755
--- a/ticket
+++ b/ticket
@@ -77,6 +77,25 @@ _sed_i() {
     sed "$@" "$file" > "$tmp" && mv "$tmp" "$file"
 }
 
+# Adjust markdown heading levels for design documents
+# Design docs are nested under ## Design, so all headings need to be h3 or deeper
+adjust_design_headings() {
+    local content="$1"
+
+    # Convert literal \n to actual newlines for processing
+    content=$(echo -e "$content")
+
+    # Check if content has any h1 or h2 headings
+    if ! echo "$content" | grep -q '^##\? '; then
+        # No h1/h2 headings found, assume already properly formatted
+        echo "$content"
+        return
+    fi
+
+    # Add two levels to all headings (# -> ###, ## -> ####, etc.)
+    echo "$content" | sed 's/^#/###/'
+}
+
 # Generate ticket ID from directory name + random string
 generate_id() {
     local dir_name
@@ -217,7 +236,7 @@ cmd_create() {
         if [[ -n "$design" ]]; then
             echo "## Design"
             echo ""
-            echo "$design"
+            adjust_design_headings "$design"
             echo ""
         fi
         if [[ -n "$acceptance" ]]; then
@@ -1422,9 +1441,31 @@ cmd_migrate_beads() {
             file = dir "/" id ".md"
             count++
             print "Migrated: " id
+            in_design = 0
             next
         }
-        file { print > file }
+        file {
+            # Check if this is a top-level section header (exits Design section)
+            if ($0 ~ /^## (Acceptance Criteria|Notes|Blockers|Blocking|Children|Linked)$/) {
+                in_design = 0
+                print > file
+                next
+            }
+
+            # Track when we enter Design section
+            if ($0 == "## Design") {
+                in_design = 1
+                print > file
+                next
+            }
+
+            # Adjust heading levels inside Design section
+            if (in_design && $0 ~ /^##? /) {
+                gsub(/^#/, "###", $0)
+            }
+
+            print > file
+        }
         END { if (file) close(file); print "Migrated " count " tickets from beads" }
     '
 }