diff --git a/CHANGELOG.md b/CHANGELOG.md
index f344ebe..cb73233 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -7,6 +7,15 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ## [Unreleased]
 
+## [0.5.1] - 2026-02-02
+
+### Added
+
+- **Localhost license bypass** - License check is automatically bypassed on local development environments
+  - Detects `localhost`, `127.0.0.1`, `::1`
+  - Detects common local TLDs: `.local`, `.test`, `.localhost`, `.dev.local`
+  - Allows full plugin functionality without license on development sites
+
 ## [0.5.0] - 2026-02-02
 
 ### Added
diff --git a/README.md b/README.md
index 1afd375..bcd31d4 100644
--- a/README.md
+++ b/README.md
@@ -2,7 +2,7 @@
 
 Stream music over ActivityPub - Build your own music streaming platform for Musicians and Labels.
 
-[![Version](https://img.shields.io/badge/version-0.5.0-blue.svg)](CHANGELOG.md)
+[![Version](https://img.shields.io/badge/version-0.5.1-blue.svg)](CHANGELOG.md)
 [![PHP](https://img.shields.io/badge/PHP-%3E%3D8.3-purple.svg)](https://php.net)
 [![WordPress](https://img.shields.io/badge/WordPress-%3E%3D6.4-blue.svg)](https://wordpress.org)
 [![License](https://img.shields.io/badge/license-GPL--2.0%2B-green.svg)](https://www.gnu.org/licenses/gpl-2.0.html)
diff --git a/includes/License/Manager.php b/includes/License/Manager.php
index f388480..da4b242 100644
--- a/includes/License/Manager.php
+++ b/includes/License/Manager.php
@@ -421,15 +421,50 @@ final class Manager {
 	/**
 	 * Check if the license is currently valid.
 	 *
-	 * Uses cached status for performance.
+	 * Uses cached status for performance. Bypasses license check on localhost.
 	 *
 	 * @return bool
 	 */
 	public static function is_license_valid(): bool {
+		// Bypass license check on localhost for development.
+		if ( self::is_localhost() ) {
+			return true;
+		}
+
 		$status = get_option( self::OPTION_LICENSE_STATUS, 'unchecked' );
 		return 'valid' === $status;
 	}
 
+	/**
+	 * Check if the current site is running on localhost.
+	 *
+	 * @return bool
+	 */
+	public static function is_localhost(): bool {
+		$host = wp_parse_url( home_url(), PHP_URL_HOST );
+
+		// Common localhost identifiers.
+		$localhost_hosts = array(
+			'localhost',
+			'127.0.0.1',
+			'::1',
+		);
+
+		if ( in_array( $host, $localhost_hosts, true ) ) {
+			return true;
+		}
+
+		// Common local development TLDs.
+		$local_tlds = array( '.local', '.test', '.localhost', '.dev.local' );
+		foreach ( $local_tlds as $tld ) {
+			if ( str_ends_with( $host, $tld ) ) {
+				return true;
+			}
+		}
+
+		return false;
+	}
+
 	/**
 	 * Get the license key.
 	 *
diff --git a/wp-fedistream.php b/wp-fedistream.php
index 63ce11e..cc155e0 100644
--- a/wp-fedistream.php
+++ b/wp-fedistream.php
@@ -3,7 +3,7 @@
  * Plugin Name: WP FediStream
  * Plugin URI: https://src.bundespruefstelle.ch/magdev/wp-fedistream
  * Description: Stream music over ActivityPub - Build your own music streaming platform for Musicians and Labels.
- * Version: 0.5.0
+ * Version: 0.5.1
  * Requires at least: 6.4
  * Requires PHP: 8.3
  * Author: Marco Graetsch
@@ -26,7 +26,7 @@ if ( ! defined( 'ABSPATH' ) ) {
  *
  * @var string
  */
-define( 'WP_FEDISTREAM_VERSION', '0.5.0' );
+define( 'WP_FEDISTREAM_VERSION', '0.5.1' );
 
 /**
  * Plugin file path.