---
title: "How Claude Code works"
description: "> ## Documentation Index > Fetch the complete documentation index at: https://code.claude.com/docs/llms.txt > Use this file to discover all available pages before exploring further."
type: skill
canonical_url: https://claudary.paisolsolutions.com/skills/how-claude-code-works
source: "Claudary"
difficulty: intermediate
author: "Claude Code Knowledge Pack"
date: 2026-07-10T11:25:13.385Z
license: CC-BY-4.0
attribution: "How Claude Code works — Claudary (https://claudary.paisolsolutions.com/skills/how-claude-code-works)"
---
# How Claude Code works
> ## Documentation Index > Fetch the complete documentation index at: https://code.claude.com/docs/llms.txt > Use this file to discover all available pages before exploring further.
## Overview
> ## Documentation Index
> Fetch the complete documentation index at: https://code.claude.com/docs/llms.txt
> Use this file to discover all available pages before exploring further.
# How Claude Code works
> Understand the agentic loop, built-in tools, and how Claude Code interacts with your project.
Claude Code is an agentic assistant that runs in your terminal. While it excels at coding, it can help with anything you can do from the command line: writing docs, running builds, searching files, researching topics, and more.
This guide covers the core architecture, built-in capabilities, and [tips for working effectively](#work-effectively-with-claude-code). For step-by-step walkthroughs, see [Common workflows](/en/common-workflows). For extensibility features like skills, MCP, and hooks, see [Extend Claude Code](/en/features-overview).
## The agentic loop
When you give Claude a task, it works through three phases: **gather context**, **take action**, and **verify results**. These phases blend together. Claude uses tools throughout, whether searching files to understand your code, editing to make changes, or running tests to check its work.
The loop adapts to what you ask. A question about your codebase might only need context gathering. A bug fix cycles through all three phases repeatedly. A refactor might involve extensive verification. Claude decides what each step requires based on what it learned from the previous step, chaining dozens of actions together and course-correcting along the way.
You're part of this loop too. You can interrupt at any point to steer Claude in a different direction, provide additional context, or ask it to try a different approach. Claude works autonomously but stays responsive to your input.
The agentic loop is powered by two components: [models](#models) that reason and [tools](#tools) that act. Claude Code serves as the **agentic harness** around Claude: it provides the tools, context management, and execution environment that turn a language model into a capable coding agent.
### Models
Claude Code uses Claude models to understand your code and reason about tasks. Claude can read code in any language, understand how components connect, and figure out what needs to change to accomplish your goal. For complex tasks, it breaks work into steps, executes them, and adjusts based on what it learns.
[Multiple models](/en/model-config) are available with different tradeoffs. Sonnet handles most coding tasks well. Opus provides stronger reasoning for complex architectural decisions. Switch with `/model` during a session or start with `claude --model `.
When this guide says "Claude chooses" or "Claude decides," it's the model doing the reasoning.
### Tools
Tools are what make Claude Code agentic. Without tools, Claude can only respond with text. With tools, Claude can act: read your code, edit files, run commands, search the web, and interact with external services. Each tool use returns information that feeds back into the loop, informing Claude's next decision.
The built-in tools generally fall into five categories, each representing a different kind of agency.
| Category | What Claude can do |
| --------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| **File operations** | Read files, edit code, create new files, rename and reorganize |
| **Search** | Find files by pattern, search content with regex, explore codebases |
| **Execution** | Run shell commands, start servers, run tests, use git |
| **Web** | Search the web, fetch documentation, look up error messages |
| **Code intelligence** | See type errors and warnings after edits, jump to definitions, find references (requires [code intelligence plugins](/en/discover-plugins#code-intelligence)) |
These are the primary capabilities. Claude also has tools for spawning subagents, asking you questions, and other orchestration tasks. See [Tools available to Claude](/en/tools-reference) for the complete list.
Claude chooses which tools to use based on your prompt and what it learns along the way. When you say "fix the failing tests," Claude might:
1. Run the test suite to see what's failing
2. Read the error output
3. Search for the relevant source files
4. Read those files to understand the code
5. Edit the files to fix the issue
6. Run the tests again to verify
Each tool use gives Claude new information that informs the next step. This is the agentic loop in action.
**Extending the base capabilities:** The built-in tools are the foundation. You can extend what Claude knows with [skills](/en/skills), connect to external services with [MCP](/en/mcp), automate workflows with [hooks](/en/hooks), and offload tasks to [subagents](/en/sub-agents). These extensions form a layer on top of the core agentic loop. See [Extend Claude Code](/en/features-overview) for guidance on choosing the right extension for your needs.
## What Claude can access
This guide focuses on the terminal. Claude Code also runs in [VS Code](/en/vs-code), [JetBrains IDEs](/en/jetbrains), and other environments.
When you run `claude` in a directory, Claude Code gains access to:
* **Your project.** Files in your directory and subdirectories, plus files elsewhere with your permission.
* **Your terminal.** Any command you could run: build tools, git, package managers, system utilities, scripts. If you can do it from the command line, Claude can too.
* **Your git state.** Current branch, uncommitted changes, and recent commit history.
* **Your [CLAUDE.md](/en/memory).** A markdown file where you store project-specific instructions, conventions, and context that Claude should know every session.
* **[Auto memory](/en/memory#auto-memory).** Learnings Claude saves automatically as you work, like project patterns and your preferences. The first 200 lines or 25KB of MEMORY.md, whichever comes first, load at the start of each session.
* **Extensions you configure.** [MCP servers](/en/mcp) for external services, [skills](/en/skills) for workflows, [subagents](/en/sub-agents) for delegated work, and [Claude in Chrome](/en/chrome) for browser interaction.
Because Claude sees your whole project, it can work across it. When you ask Claude to "fix the authentication bug," it searches for relevant files, reads multiple files to understand context, makes coordinated edits across them, runs tests to verify the fix, and commits the changes if you ask. This is different from inline code assistants that only see the current file.
## Environments and interfaces
The agentic loop, tools, and capabilities described above are the same everywhere you use Claude Code. What changes is where the code executes and how you interact with it.
### Execution environments
Claude Code runs in three environments, each with different tradeoffs for where your code executes.
| Environment | Where code runs | Use case |
| ------------------ | --------------------------------------- | ---------------------------------------------------------- |
| **Local** | Your machine | Default. Full access to your files, tools, and environment |
| **Cloud** | Anthropic-managed VMs | Offload tasks, work on repos you don't have locally |
| **Remote Control** | Your machine, controlled from a browser | Use the web UI while keeping everything local |
### Interfaces
You can access Claude Code through the terminal, the [desktop app](/en/desktop), [IDE extensions](/en/vs-code), [claude.ai/code](https://claude.ai/code), [Remote Control](/en/remote-control), [Slack](/en/slack), and [CI/CD pipelines](/en/github-actions). The interface determines how you see and interact with Claude, but the underlying agentic loop is identical. See [Use Claude Code everywhere](/en/overview#use-claude-code-everywhere) for the full list.
## Work with sessions
Claude Code saves your conversation locally as you work. Each message, tool use, and result is written to a plaintext JSONL file under `~/.claude/projects/`, which enables [rewinding](#undo-changes-with-checkpoints), [resuming, and forking](#resume-or-fork-sessions) sessions. Before Claude makes code changes, it also snapshots the affected files so you can revert if needed. For paths, retention, and how to clear this data, see [application data in `~/.claude`](/en/claude-directory#application-data).
**Sessions are independent.** Each new session starts with a fresh context window, without the conversation history from previous sessions. Claude can persist learnings across sessions using [auto memory](/en/memory#auto-memory), and you can add your own persistent instructions in [CLAUDE.md](/en/memory).
### Work across branches
Each Claude Code conversation is a session tied to your current directory. The `/resume` picker shows sessions from the current worktree by default, with keyboard shortcuts to widen the list to other worktrees or projects. See [Resume previous conversations](/en/common-workflows#resume-previous-conversations) for the full list of picker shortcuts and how name resolution works.
Claude sees your current branch's files. When you switch branches, Claude sees the new branch's files, but your conversation history stays the same. Claude remembers what you discussed even after switching.
Since sessions are tied to directories, you can run parallel Claude sessions by using [git worktrees](/en/common-workflows#run-parallel-claude-code-sessions-with-git-worktrees), which create separate directories for individual branches.
### Resume or fork sessions
When you resume a session with `claude --continue` or `claude --resume`, you pick up where you left off using the same session ID. New messages append to the existing conversation. Your full conversation history is restored, but session-scoped permissions are not. You'll need to re-approve those.
To branch off and try a different approach without affecting the original session, use the `--fork-session` flag:
```bash theme={null}
claude --continue --fork-session
```
This creates a new session ID while preserving the conversation history up to that point. The original session remains unchanged. Like resume, forked sessions don't inherit session-scoped permissions.
**Same session in multiple terminals**: If you resume the same session in multiple terminals, both terminals write to the same session file. Messages from both get interleaved, like two people writing in the same notebook. Nothing corrupts, but the conversation becomes jumbled. Each terminal only sees its own messages during the session, but if you resume that session later, you'll see everything interleaved. For parallel work from the same starting point, use `--fork-session` to give each terminal its own clean session.
### The context window
Claude's context window holds your conversation history, file contents, command outputs, [CLAUDE.md](/en/memory), [auto memory](/en/memory#auto-memory), loaded skills, and system instructions. As you work, context fills up. Claude compacts automatically, but instructions from early in the conversation can get lost. Put persistent rules in CLAUDE.md, and run `/context` to see what's using space.
For an interactive walkthrough of what loads and when, see [Explore the context window](/en/context-window).
#### When context fills up
Claude Code manages context automatically as you approach the limit. It clears older tool outputs first, then summarizes the conversation if needed. Your requests and key code snippets are preserved; detailed instructions from early in the conversation may be lost. Put persistent rules in CLAUDE.md rather than relying on conversation history.
To control what's preserved during compaction, add a "Compact Instructions" section to CLAUDE.md or run `/compact` with a focus (like `/compact focus on the API changes`).
If a single file or tool output is so large that context refills immediately after each summary, Claude Code stops auto-compacting after a few attempts and shows an error instead of looping. See [Auto-compaction stops with a thrashing error](/en/troubleshooting#auto-compaction-stops-with-a-thrashing-error) for recovery steps.
Run `/context` to see what's using space. MCP tool definitions are deferred by default and loaded on demand via [tool search](/en/mcp#scale-with-mcp-tool-search), so only tool names consume context until Claude uses a specific tool. Run `/mcp` to check per-server costs.
#### Manage context with skills and subagents
Beyond compaction, you can use other features to control what loads into context.
[Skills](/en/skills) load on demand. Claude sees skill descriptions at session start, but the full content only loads when a skill is used. For skills you invoke manually, set `disable-model-invocation: true` to keep descriptions out of context until you need them.
[Subagents](/en/sub-agents) get their own fresh context, completely separate from your main conversation. Their work doesn't bloat your context. When done, they return a summary. This isolation is why subagents help with long sessions.
See [context costs](/en/features-overview#understand-context-costs) for what each feature costs, and [reduce token usage](/en/costs#reduce-token-usage) for tips on managing context.
## Stay safe with checkpoints and permissions
Claude has two safety mechanisms: checkpoints let you undo file changes, and permissions control what Claude can do without asking.
### Undo change
---
Source: [Claudary](https://claudary.paisolsolutions.com/skills/how-claude-code-works) · https://claudary.paisolsolutions.com