diff --git a/litellm/proxy/policy_engine/policy_resolver.py b/litellm/proxy/policy_engine/policy_resolver.py
new file mode 100644
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+++ b/litellm/proxy/policy_engine/policy_resolver.py
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+"""
+Policy Resolver - Resolves final guardrail list from policies.
+
+Handles:
+- Inheritance chain resolution
+- Applying add/remove guardrails
+- Combining guardrails from multiple matching policies
+"""
+
+from typing import Dict, List, Optional, Set
+
+from litellm._logging import verbose_proxy_logger
+from litellm.types.proxy.policy_engine import (
+    Policy,
+    PolicyMatchContext,
+    ResolvedPolicy,
+)
+
+
+class PolicyResolver:
+    """
+    Resolves the final list of guardrails from policies.
+
+    Handles inheritance chains and add/remove operations.
+    """
+
+    @staticmethod
+    def resolve_inheritance_chain(
+        policy_name: str,
+        policies: Dict[str, Policy],
+        visited: Optional[Set[str]] = None,
+    ) -> List[str]:
+        """
+        Get the inheritance chain for a policy (from root to policy).
+
+        Args:
+            policy_name: Name of the policy
+            policies: Dictionary of all policies
+            visited: Set of visited policies (for cycle detection)
+
+        Returns:
+            List of policy names from root ancestor to the given policy
+        """
+        if visited is None:
+            visited = set()
+
+        if policy_name in visited:
+            verbose_proxy_logger.warning(
+                f"Circular inheritance detected for policy '{policy_name}'"
+            )
+            return []
+
+        policy = policies.get(policy_name)
+        if policy is None:
+            return []
+
+        visited.add(policy_name)
+
+        if policy.inherit:
+            parent_chain = PolicyResolver.resolve_inheritance_chain(
+                policy_name=policy.inherit, policies=policies, visited=visited
+            )
+            return parent_chain + [policy_name]
+
+        return [policy_name]
+
+    @staticmethod
+    def resolve_policy_guardrails(
+        policy_name: str,
+        policies: Dict[str, Policy],
+    ) -> ResolvedPolicy:
+        """
+        Resolve the final guardrails for a single policy, including inheritance.
+
+        Args:
+            policy_name: Name of the policy to resolve
+            policies: Dictionary of all policies
+
+        Returns:
+            ResolvedPolicy with final guardrails list
+        """
+        inheritance_chain = PolicyResolver.resolve_inheritance_chain(
+            policy_name=policy_name, policies=policies
+        )
+
+        # Start with empty set of guardrails
+        guardrails: Set[str] = set()
+
+        # Apply each policy in the chain (from root to leaf)
+        for chain_policy_name in inheritance_chain:
+            policy = policies.get(chain_policy_name)
+            if policy is None:
+                continue
+
+            # Add guardrails
+            for guardrail in policy.guardrails.get_add():
+                guardrails.add(guardrail)
+
+            # Remove guardrails
+            for guardrail in policy.guardrails.get_remove():
+                guardrails.discard(guardrail)
+
+        return ResolvedPolicy(
+            policy_name=policy_name,
+            guardrails=list(guardrails),
+            inheritance_chain=inheritance_chain,
+        )
+
+    @staticmethod
+    def resolve_guardrails_for_context(
+        context: PolicyMatchContext,
+        policies: Optional[Dict[str, Policy]] = None,
+    ) -> List[str]:
+        """
+        Resolve the final list of guardrails for a request context.
+
+        This:
+        1. Finds all policies that match the context
+        2. Resolves each policy's guardrails (including inheritance)
+        3. Combines all guardrails (union)
+
+        Args:
+            context: The request context
+            policies: Dictionary of all policies (if None, uses global registry)
+
+        Returns:
+            List of guardrail names to apply
+        """
+        from litellm.proxy.policy_engine.policy_matcher import PolicyMatcher
+        from litellm.proxy.policy_engine.policy_registry import get_policy_registry
+
+        if policies is None:
+            registry = get_policy_registry()
+            if not registry.is_initialized():
+                return []
+            policies = registry.get_all_policies()
+
+        # Get matching policies
+        matching_policy_names = PolicyMatcher.get_matching_policies(
+            policies=policies, context=context
+        )
+
+        if not matching_policy_names:
+            verbose_proxy_logger.debug(
+                f"No policies match context: team_alias={context.team_alias}, "
+                f"key_alias={context.key_alias}, model={context.model}"
+            )
+            return []
+
+        # Resolve each matching policy and combine guardrails
+        all_guardrails: Set[str] = set()
+
+        for policy_name in matching_policy_names:
+            resolved = PolicyResolver.resolve_policy_guardrails(
+                policy_name=policy_name, policies=policies
+            )
+            all_guardrails.update(resolved.guardrails)
+            verbose_proxy_logger.debug(
+                f"Policy '{policy_name}' contributes guardrails: {resolved.guardrails}"
+            )
+
+        result = list(all_guardrails)
+        verbose_proxy_logger.debug(
+            f"Final guardrails for context: {result}"
+        )
+
+        return result
+
+    @staticmethod
+    def get_all_resolved_policies(
+        policies: Optional[Dict[str, Policy]] = None,
+    ) -> Dict[str, ResolvedPolicy]:
+        """
+        Resolve all policies and return their final guardrails.
+
+        Useful for debugging and displaying policy configurations.
+
+        Args:
+            policies: Dictionary of all policies (if None, uses global registry)
+
+        Returns:
+            Dictionary mapping policy names to ResolvedPolicy objects
+        """
+        from litellm.proxy.policy_engine.policy_registry import get_policy_registry
+
+        if policies is None:
+            registry = get_policy_registry()
+            if not registry.is_initialized():
+                return {}
+            policies = registry.get_all_policies()
+
+        resolved: Dict[str, ResolvedPolicy] = {}
+
+        for policy_name in policies:
+            resolved[policy_name] = PolicyResolver.resolve_policy_guardrails(
+                policy_name=policy_name, policies=policies
+            )
+
+        return resolved