Using Claude Code in VS Code

The Claude Code VS Code extension embeds the full Claude Code interface inside VS Code as a side panel. You get the same file-reading, command-running, multi-step capability as the CLI — without leaving your editor. Files open in the editor are directly visible to Claude; you do not need to navigate the file system or paste file contents manually.

Installation

Open VS Code
Go to the Extensions panel (Cmd/Ctrl+Shift+X)
Search Claude Code
Click Install on the official Anthropic extension
Claude Code appears as a panel icon in the Activity Bar (left sidebar)

Prerequisite

Claude Code must be installed on your system before the VS Code extension can function. Install it via the native installer, Homebrew, or npm first — see Installing Claude Code. The extension is a UI layer on top of the same Claude Code CLI.

Signing in

On first use, the extension prompts you to sign in with your Anthropic account. Authentication opens in your browser — sign in once and the session token is stored locally. You are not prompted again unless you explicitly sign out.

What changes compared to the terminal

The core capability is identical. The experience differs in three ways:

Open files are visible — any file you have open in the editor is in Claude's context without you needing to read it explicitly. Ask about a function in an open file and Claude already sees it.
Inline code actions — right-click any selected code and access Claude Code actions directly from the context menu: explain selection, fix issue, generate test
Diff view for edits — when Claude proposes file changes, VS Code shows them in a diff view so you can review and accept/reject changes file by file, like a code review

Panel layout

    
    VS Code window
  

    ├── Activity Bar (left)
│   └── Claude Code icon — opens the panel
├── Claude Code Panel
│   ├── Conversation input
│   ├── Tool call log (collapsible)
│   └── Session controls (new, clear, compact)
└── Editor area
    └── Diff views appear here when Claude edits files
  

Settings and CLAUDE.md

The extension reads the same .claude/CLAUDE.md and .claude/settings.json as the CLI. There is no separate configuration for the extension — your workspace configuration applies equally in the terminal and the panel.

MCP servers in VS Code

MCP servers registered in ~/.claude.json (the global config) are reliably loaded by the VS Code extension. Workspace-scoped .mcp.json files may not load consistently in the extension — if a server does not appear, add it to the global config as a fallback.

Keyboard shortcuts

Default shortcuts in the extension:

Focus Claude Code panel — varies by OS; check Keyboard Shortcuts in VS Code settings under "Claude Code"
New session — available from the panel header
Accept edit — standard VS Code diff accept shortcut

Custom keybindings for slash commands can be configured in ~/.claude/keybindings.json — these work in both the terminal and the VS Code panel.

When to use the extension vs the terminal

Use the extension when you are actively working in a file and want Claude alongside it — the open-file visibility and diff review are significant advantages. Use the terminal when you are running long autonomous tasks (large refactors, batch operations, agent workflows) where you do not need the editor context and prefer not to keep VS Code open.

Using the VS Code extension with AI Business OS

The VS Code extension is the primary interface for AI Business OS users. When you open an AI Business OS workspace in VS Code and start a Claude Code session from the panel, Claude loads the full workspace configuration automatically: the master CLAUDE.md, all rules files, and available skills. There is nothing to set up per session — the workspace is the configuration.

A few things specific to running AI Business OS via the VS Code extension:

MCP servers — AI Business OS registers MCP servers in ~/.claude.json (the global config) rather than .mcp.json, because the VS Code extension loads global config reliably. Workspace-scoped .mcp.json can miss loading in the extension; global registration is the stable path.
Session commands — skills like /day, /night, and /status run directly from the panel input. There is no difference in behaviour between the panel and the terminal for skill invocations.
Multiple workspaces — if you have separate AI Business OS workspaces (for example, one personal and one per client), open each as its own VS Code window. The extension reads the CLAUDE.md from whichever workspace is currently open — configurations do not bleed across windows.
PRIMA Memory — the PRIMA Memory MCP server records conversation history to a local database in the workspace root (.prima-memory/). This is independent of VS Code but integrates seamlessly via the panel — use /resume to recover context from a previous session by date or keyword.