diff --git a/DIRECTORY.md b/DIRECTORY.md
index 7dcb1f9c2387..67e701ffcf3b 100644
--- a/DIRECTORY.md
+++ b/DIRECTORY.md
@@ -277,6 +277,7 @@
     * [Prefix Sum](data_structures/arrays/prefix_sum.py)
     * [Product Sum](data_structures/arrays/product_sum.py)
     * [Rotate Array](data_structures/arrays/rotate_array.py)
+    * [Set Matrix Zeroes](data_structures/arrays/set_matrix_zeroes.py)
     * [Sparse Table](data_structures/arrays/sparse_table.py)
     * [Sudoku Solver](data_structures/arrays/sudoku_solver.py)
   * Binary Tree
diff --git a/data_structures/arrays/set_matrix_zeroes.py b/data_structures/arrays/set_matrix_zeroes.py
new file mode 100644
index 000000000000..905d03b2daf5
--- /dev/null
+++ b/data_structures/arrays/set_matrix_zeroes.py
@@ -0,0 +1,67 @@
+"""
+Set Matrix Zeroes Algorithm
+---------------------------
+If an element in an m x n matrix is 0, set its entire row and column to 0.
+
+Explanation:
+We use the first row and first column as markers to track which rows and
+columns should be zeroed, avoiding extra space usage (O(1) space complexity).
+
+References:
+https://leetcode.com/problems/set-matrix-zeroes/
+
+Doctest:
+>>> matrix = [
+...     [1, 1, 1],
+...     [1, 0, 1],
+...     [1, 1, 1]
+... ]
+>>> set_matrix_zeroes(matrix)
+>>> matrix
+[[1, 0, 1], [0, 0, 0], [1, 0, 1]]
+>>> matrix = [[0, 1, 2, 0], [3, 4, 5, 2], [1, 3, 1, 5]]
+>>> set_matrix_zeroes(matrix)
+>>> matrix
+[[0, 0, 0, 0], [0, 4, 5, 0], [0, 3, 1, 0]]
+"""
+
+
+def set_matrix_zeroes(matrix: list[list[int]]) -> None:
+    """
+    Modify the matrix in-place such that if an element is 0,
+    its entire row and column are set to 0.
+
+    :param matrix: 2D list of integers
+    :return: None (modifies matrix in-place)
+
+    Time Complexity: O(m * n)
+    Space Complexity: O(1)
+    """
+    rows = len(matrix)
+    cols = len(matrix[0])
+    col0 = 1
+
+    # Step 1: Mark rows and columns that need to be zeroed
+    for i in range(rows):
+        if matrix[i][0] == 0:
+            col0 = 0
+        for j in range(1, cols):
+            if matrix[i][j] == 0:
+                matrix[i][0] = 0
+                matrix[0][j] = 0
+
+    # Step 2: Update the inner matrix cells
+    for i in range(1, rows):
+        for j in range(1, cols):
+            if matrix[i][0] == 0 or matrix[0][j] == 0:
+                matrix[i][j] = 0
+
+    # Step 3: Handle the first row
+    if matrix[0][0] == 0:
+        for j in range(cols):
+            matrix[0][j] = 0
+
+    # Step 4: Handle the first column
+    if col0 == 0:
+        for i in range(rows):
+            matrix[i][0] = 0