diff --git a/src/pf1e_simulator/effects.py b/src/pf1e_simulator/effects.py
index dbc58f7..ba05f05 100644
--- a/src/pf1e_simulator/effects.py
+++ b/src/pf1e_simulator/effects.py
@@ -9,8 +9,8 @@ PF1e bonus types determine whether multiple bonuses to the same stat stack:
   circumstance) keep only the highest value per type (CRB "Combining Magic
   Effects": "two bonuses of the same type don't stack even if they come from
   different spells"; APG "Traits": "Trait bonuses do not stack").
-- Penalties follow the same rules: same-type penalties don't stack (the
-  least severe — i.e. the max value — is kept).
+- Penalties: for a non-stacking type the WORST penalty applies (same-type
+  penalties don't stack), and a same-type bonus and penalty apply together.
 
 This module is the foundation for spells, conditions, feats, class abilities,
 and racial traits — all of which produce StatModifier instances that the
@@ -122,22 +122,33 @@ class ActiveCondition:
 def resolve_modifiers(modifiers: Iterable[StatModifier]) -> int:
     """Sum stat modifiers applying PF1e stacking rules.
 
-    Stacking bonus types (dodge, untyped) all sum together. Non-stacking
-    types (including racial and trait) keep only the highest value per type
-    (max is used, which correctly handles both bonuses and penalties: for
-    bonuses the highest is most beneficial, for penalties the highest is
-    least severe).
+    Stacking bonus types (dodge, untyped) all sum together. For each
+    non-stacking type the best BONUS (max, floor 0) and the worst PENALTY
+    (min) are kept separately and then summed — same-type bonuses don't
+    stack (highest applies), same-type penalties don't stack (worst
+    applies), and a bonus and a penalty of the same type apply together
+    (CRB "Common Terms — Stacking": "Penalties and bonuses generally stack
+    with one another").
 
     The caller is responsible for filtering by condition and weapon before
     calling — this function performs pure stacking math.
     """
     stacking_total = 0
-    best_by_type: dict[str, int] = {}
+    best_bonus_by_type: dict[str, int] = {}
+    worst_penalty_by_type: dict[str, int] = {}
     for mod in modifiers:
         if mod.bonus_type in _STACKING_TYPES:
             stacking_total += mod.value
-        else:
-            prev = best_by_type.get(mod.bonus_type)
+        elif mod.value >= 0:
+            prev = best_bonus_by_type.get(mod.bonus_type)
             if prev is None or mod.value > prev:
-                best_by_type[mod.bonus_type] = mod.value
-    return stacking_total + sum(best_by_type.values())
+                best_bonus_by_type[mod.bonus_type] = mod.value
+        else:
+            prev = worst_penalty_by_type.get(mod.bonus_type)
+            if prev is None or mod.value < prev:
+                worst_penalty_by_type[mod.bonus_type] = mod.value
+    return (
+        stacking_total
+        + sum(best_bonus_by_type.values())
+        + sum(worst_penalty_by_type.values())
+    )
diff --git a/tests/test_effects.py b/tests/test_effects.py
index 7780c29..d5b8e71 100644
--- a/tests/test_effects.py
+++ b/tests/test_effects.py
@@ -111,20 +111,42 @@ class TestNonStackingTypes:
 class TestPenalties:
     """Given: penalties (negative values) with non-stacking types
     When: resolve_modifiers is called
-    Then: least severe penalty is kept (max value)."""
+    Then: the worst penalty per type is kept, and a same-type bonus and
+    penalty apply together (CRB "Common Terms — Stacking")."""
 
-    def test_same_type_penalties_keep_least_severe(self) -> None:
+    def test_same_type_penalties_keep_most_severe(self) -> None:
         mods = [
             StatModifier("attack", -2, "morale"),
             StatModifier("attack", -1, "morale"),
         ]
-        assert resolve_modifiers(mods) == -1
+        assert resolve_modifiers(mods) == -2
 
-    def test_same_type_bonus_and_penalty_keep_most_beneficial(self) -> None:
+    def test_morale_minus2_and_minus4_keep_worst(self) -> None:
+        mods = [
+            StatModifier("attack", -2, "morale"),
+            StatModifier("attack", -4, "morale"),
+        ]
+        assert resolve_modifiers(mods) == -4
+
+    def test_same_type_bonus_and_penalty_both_apply(self) -> None:
         mods = [
             StatModifier("attack", 2, "morale"),
             StatModifier("attack", -1, "morale"),
         ]
+        assert resolve_modifiers(mods) == 1
+
+    def test_morale_plus2_and_minus2_cancel(self) -> None:
+        mods = [
+            StatModifier("attack", 2, "morale"),
+            StatModifier("attack", -2, "morale"),
+        ]
+        assert resolve_modifiers(mods) == 0
+
+    def test_morale_plus2_and_plus1_keep_highest(self) -> None:
+        mods = [
+            StatModifier("attack", 2, "morale"),
+            StatModifier("attack", 1, "morale"),
+        ]
         assert resolve_modifiers(mods) == 2
 
     def test_untyped_penalties_stack(self) -> None:
@@ -167,7 +189,8 @@ class TestMixedStacking:
             StatModifier("attack", -1),
             StatModifier("attack", 1, "dodge"),
         ]
-        assert resolve_modifiers(mods) == 2  # 2 (max morale) + -1 (untyped) + 1 (dodge)
+        # 2 (max morale bonus) + -1 (morale penalty) + -1 (untyped) + 1 (dodge)
+        assert resolve_modifiers(mods) == 1
 
 
 # ── Edge cases ────────────────────────────────────────────────────────────────