diff --git a/apps/api/v1/routes/transactions.ts b/apps/api/v1/routes/transactions.ts
index 7e3d1d49..88b349e1 100644
--- a/apps/api/v1/routes/transactions.ts
+++ b/apps/api/v1/routes/transactions.ts
@@ -5,7 +5,11 @@ import { getAuthUserStrict } from '../middlewares/auth'
 import { canUserReadBudget, findBudget } from '../services/budget.service'
 import {
   canUserCreateTransaction,
+  canUserReadTransaction,
+  canUserUpdateTransaction,
   createTransaction,
+  findTransaction,
+  updateTransaction,
 } from '../services/transaction.service'
 import { findUserWallet } from '../services/wallet.service'
 import {
@@ -75,7 +79,45 @@ router.put(
   ),
   zValidator('json', zUpdateTransaction),
   async (c) => {
-    return c.json({ message: 'not implemented' })
+    const { transactionId } = c.req.valid('param')
+    const user = getAuthUserStrict(c)
+    const data = c.req.valid('json')
+    const { budgetId, walletAccountId: walletId } = data
+
+    const transaction = await findTransaction({ transactionId })
+
+    if (
+      !(transaction && (await canUserReadTransaction({ user, transaction })))
+    ) {
+      return c.json({ message: 'transaction not found' }, 404)
+    }
+
+    const wallet = walletId ? await findUserWallet({ user, walletId }) : null
+    if (walletId && !wallet) {
+      return c.json({ message: 'wallet not found' }, 404)
+    }
+
+    if (
+      !(await canUserUpdateTransaction({
+        user,
+        transaction,
+        walletAccount: wallet,
+      }))
+    ) {
+      return c.json({ message: 'user cannot update transaction' }, 403)
+    }
+
+    const budget = budgetId ? await findBudget({ budgetId }) : null
+    if (budgetId && (!budget || !(await canUserReadBudget({ user, budget })))) {
+      return c.json({ message: 'budget not found' }, 404)
+    }
+
+    const updatedTransaction = await updateTransaction({
+      transactionId,
+      data,
+    })
+
+    return c.json(updatedTransaction)
   },
 )
 
diff --git a/apps/api/v1/services/transaction.service.ts b/apps/api/v1/services/transaction.service.ts
index db27d535..8ffa22c0 100644
--- a/apps/api/v1/services/transaction.service.ts
+++ b/apps/api/v1/services/transaction.service.ts
@@ -1,7 +1,19 @@
 import prisma from '@/lib/prisma'
-import type { Budget, User, UserWalletAccount } from '@prisma/client'
-import type { CreateTransaction } from '../validation/transaction.zod'
-import { isUserBudgetMember } from './budget.service'
+import type {
+  Budget,
+  Transaction,
+  User,
+  UserWalletAccount,
+} from '@prisma/client'
+import type {
+  CreateTransaction,
+  UpdateTransaction,
+} from '../validation/transaction.zod'
+import {
+  findBudget,
+  isUserBudgetMember,
+  isUserBudgetOwner,
+} from './budget.service'
 
 export async function canUserCreateTransaction({
   user,
@@ -25,6 +37,67 @@ export async function canUserCreateTransaction({
   return true
 }
 
+export async function canUserReadTransaction({
+  user,
+  transaction,
+}: {
+  user: User
+  transaction: Transaction
+}) {
+  // If user is the creator of the transaction, they can read it
+  if (transaction.createdByUserId === user.id) {
+    return true
+  }
+
+  // If user is the member of the budget of the transaction, they can read it
+  if (transaction.budgetId) {
+    const budget = await findBudget({ budgetId: transaction.budgetId })
+    return budget && (await isUserBudgetMember({ user, budget }))
+  }
+
+  return false
+}
+
+export async function canUserUpdateTransaction({
+  user,
+  transaction,
+  walletAccount,
+}: {
+  user: User
+  transaction: Transaction
+  walletAccount: UserWalletAccount | null
+}) {
+  // If wallet is provided, user must own the wallet
+  if (walletAccount && walletAccount.userId !== user.id) {
+    return false
+  }
+
+  // If user is the creator of the transaction, they can update it
+  if (transaction.createdByUserId === user.id) {
+    return true
+  }
+
+  // If user owns the budget of the transaction, they can update it
+  if (transaction.budgetId) {
+    const budget = await findBudget({ budgetId: transaction.budgetId })
+    return budget && (await isUserBudgetOwner({ user, budget }))
+  }
+
+  return false
+}
+
+export async function findTransaction({
+  transactionId,
+}: {
+  transactionId: string
+}) {
+  return prisma.transaction.findUnique({
+    where: {
+      id: transactionId,
+    },
+  })
+}
+
 export async function createTransaction({
   user,
   data,
@@ -41,3 +114,20 @@ export async function createTransaction({
 
   return transaction
 }
+
+export async function updateTransaction({
+  transactionId,
+  data,
+}: {
+  transactionId: string
+  data: UpdateTransaction
+}) {
+  const transaction = await prisma.transaction.update({
+    where: {
+      id: transactionId,
+    },
+    data,
+  })
+
+  return transaction
+}
diff --git a/apps/api/v1/validation/transaction.zod.ts b/apps/api/v1/validation/transaction.zod.ts
index 42112619..da0cb0a9 100644
--- a/apps/api/v1/validation/transaction.zod.ts
+++ b/apps/api/v1/validation/transaction.zod.ts
@@ -16,6 +16,6 @@ export const zUpdateTransaction = z.object({
   currency: z.string().optional(),
   note: z.string().optional(),
   budgetId: z.string().optional(),
-  walletId: z.string().optional(),
+  walletAccountId: z.string().optional(),
 })
 export type UpdateTransaction = z.infer<typeof zUpdateTransaction>