Prep 0.16.2 release (#318)

This PR fixes `encodeProjectPath` to replace all non-alphanumeric
characters with `-`, matching how Claude Code actually encodes project
paths.

The previous implementation only replaced path separators (`/` on Unix,
`\` on Windows), so characters like `_`, non-ASCII characters (e.g.
CJK), and other non-alphanumeric characters were left as-is. This caused
a mismatch with the paths encoded by Claude Code, resulting in session
lookups failing with "Session not found" for directories containing such
characters.

The fix also removes the Windows-specific code path, as the simple regex
`[^a-zA-Z0-9]` correctly handles all platforms.

Related to #300

.github/workflows/publish.yml

@@ -33,4 +33,4 @@ jobs:
         id: create_release
         uses: softprops/action-gh-release@6da8fa9354ddfdc4aeace5fc48d7f679b5214090
         with:
-          draft: true
+          generate_release_notes: true

.gitignore

@@ -1,3 +1,5 @@
 node_modules
 dist
 .DS_Store
+.claude/*.local.*
+CLAUDE.local.md

CHANGELOG.md

@@ -1,5 +1,77 @@
 # Changelog
 
+## 0.16.2
+
+- Update to @anthropic-ai/claude-agent-sdk@0.2.44
+- fix: Replace all non-alphanumeric characters for session loading in encodeProjectPath (#307)
+- don't include /login slash command in login command (#315)
+
+## 0.16.1
+
+- Update to @anthropic-ai/claude-agent-sdk@0.2.38
+- Fix incorrect paths for session/list
+- Fix available commands after loading a session
+- Make loading session more permissive for finding events
+- Fix overriding user-provided disallowedTools
+
+## 0.16.0
+
+- Update to @anthropic-ai/claude-agent-sdk@0.2.34
+- Experimental support for session loading
+
+## 0.15.0
+
+- Update to @anthropic-ai/claude-agent-sdk@0.2.32 (adds support for Opus 4.6 and 1M context Opus)
+
+## 0.14.0
+
+- Update to @anthropic-ai/claude-agent-sdk@0.2.29
+- Update to using the recommended `CLAUDE_CONFIG_DIR` env variable for setting where config files are kept
+- Support /context command
+- Fix incorrect context type mapping for tool calls
+- Fix glob metching for file permissions on Windows
+- Support the `IS_SANDBOX` env var for supporting bypass permissions in root mode
+- Fix missing notification for entering plan mode
+- Experimental unstable support for listing sessions
+
+## 0.13.2
+
+- Update to @anthropic-ai/claude-agent-sdk@0.2.22
+- Fix: return content from ACP write tool to help with issues with alternate providers.
+
+## 0.13.1
+
+- Update to @anthropic-ai/claude-agent-sdk@0.2.7
+- Add TypeScript declaration files for library users
+- Fixed error handling in custom ACP focused MCP tools
+
+## 0.13.0
+
+- Update to @anthropic-ai/claude-agent-sdk@0.2.6
+- Update to @agentclientprotocol/sdk@0.13.0
+
+## 0.12.6
+
+- Fix model selection
+
+## 0.12.5
+
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.70
+- Unstable implementation of resuming sessions
+
+## 0.12.4
+
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.67
+- Better respect permissions specified in settings files
+- Unstable implementation of forking
+
+## 0.12.3
+
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.65
+- Update to @agentclientprotocol/sdk@0.9.0
+- Allow agent to write plans and todos to its config directory
+- Fix experimental resume ids
+
 ## 0.12.2
 
 - Fix duplicate tool use IDs error

README.md

@@ -4,7 +4,7 @@
 
 Use [Claude Code](https://www.anthropic.com/claude-code) from [ACP-compatible](https://agentclientprotocol.com) clients such as [Zed](https://zed.dev)!
 
-This tool implements an ACP agent by using the official [Claude Code SDK](https://docs.anthropic.com/en/docs/claude-code/sdk/sdk-overview), supporting:
+This tool implements an ACP agent by using the official [Claude Agent SDK](https://platform.claude.com/docs/en/agent-sdk/overview), supporting:
 
 - Context @-mentions
 - Images
@@ -32,20 +32,14 @@ Read the docs on [External Agent](https://zed.dev/docs/ai/external-agents) suppo
 
 ### Other clients
 
-- Emacs via [agent-shell.el](https://github.com/xenodium/agent-shell)
-- [marimo notebook](https://github.com/marimo-team/marimo)
-- Neovim
-  - via [CodeCompanion.nvim](https://codecompanion.olimorris.dev/configuration/adapters#setup-claude-code-via-acp)
-  - via [yetone/avante.nvim](https://github.com/yetone/avante.nvim)
-
-[Submit a PR](https://github.com/zed-industries/claude-code-acp/pulls) to add yours!
+Or try it with any of the other [ACP compatible clients](https://agentclientprotocol.com/overview/clients)!
 
 #### Installation
 
 Install the adapter from `npm`:
 
 ```bash
-npm install @zed-industries/claude-code-acp
+npm install -g @zed-industries/claude-code-acp
 ```
 
 You can then use `claude-code-acp` as a regular ACP agent:

package.json

@@ -3,15 +3,24 @@
   "publishConfig": {
     "access": "public"
   },
-  "version": "0.12.2",
+  "version": "0.16.2",
   "description": "An ACP-compatible coding agent powered by the Claude Code SDK (TypeScript)",
   "main": "dist/lib.js",
+  "types": "dist/lib.d.ts",
   "bin": {
     "claude-code-acp": "./dist/index.js"
   },
   "type": "module",
+  "exports": {
+    ".": {
+      "types": "./dist/lib.d.ts",
+      "import": "./dist/lib.js"
+    },
+    "./*": "./*"
+  },
   "files": [
     "dist/",
+    "!dist/tests/",
     "README.md",
     "LICENSE",
     "package.json"
@@ -51,22 +60,24 @@
   "author": "Zed Industries",
   "license": "Apache-2.0",
   "dependencies": {
-    "@agentclientprotocol/sdk": "0.8.0",
-    "@anthropic-ai/claude-agent-sdk": "0.1.61",
-    "@modelcontextprotocol/sdk": "1.24.3",
-    "diff": "8.0.2"
+    "@agentclientprotocol/sdk": "0.14.1",
+    "@anthropic-ai/claude-agent-sdk": "0.2.44",
+    "@modelcontextprotocol/sdk": "1.26.0",
+    "diff": "8.0.3",
+    "minimatch": "10.2.1"
   },
   "devDependencies": {
-    "@anthropic-ai/sdk": "0.71.2",
-    "@types/node": "24.10.1",
-    "@typescript-eslint/eslint-plugin": "8.48.1",
-    "@typescript-eslint/parser": "8.48.1",
-    "eslint": "9.39.1",
+    "@anthropic-ai/sdk": "0.74.0",
+    "@eslint/js": "10.0.1",
+    "@types/node": "25.2.3",
+    "@typescript-eslint/eslint-plugin": "8.56.0",
+    "@typescript-eslint/parser": "8.56.0",
+    "eslint": "10.0.0",
     "eslint-config-prettier": "10.1.8",
-    "globals": "16.5.0",
-    "prettier": "3.7.4",
+    "globals": "17.3.0",
+    "prettier": "3.8.1",
     "ts-node": "10.9.2",
     "typescript": "5.9.3",
-    "vitest": "4.0.15"
+    "vitest": "4.0.18"
   }
 }

src/lib.ts

@@ -15,8 +15,22 @@ export {
   Pushable,
   unreachable,
 } from "./utils.js";
-export { createMcpServer, toolNames } from "./mcp-server.js";
-export { toolInfoFromToolUse, planEntries, toolUpdateFromToolResult } from "./tools.js";
+export { createMcpServer } from "./mcp-server.js";
+export {
+  toolInfoFromToolUse,
+  planEntries,
+  toolUpdateFromToolResult,
+  createPreToolUseHook,
+  acpToolNames as toolNames,
+} from "./tools.js";
+export {
+  SettingsManager,
+  type ClaudeCodeSettings,
+  type PermissionSettings,
+  type PermissionDecision,
+  type PermissionCheckResult,
+  type SettingsManagerOptions,
+} from "./settings.js";
 
 // Export types
 export type { ClaudePlanEntry } from "./tools.js";

src/mcp-server.ts

@@ -1,10 +1,24 @@
 import { McpServer } from "@modelcontextprotocol/sdk/server/mcp.js";
+import {
+  BashInput,
+  FileEditInput,
+  FileReadInput,
+  FileWriteInput,
+  TaskOutputInput,
+} from "@anthropic-ai/claude-agent-sdk/sdk-tools.js";
 import { z } from "zod";
-import { ClaudeAcpAgent } from "./acp-agent.js";
-import { ClientCapabilities, TerminalOutputResponse } from "@agentclientprotocol/sdk";
+import { CLAUDE_CONFIG_DIR, ClaudeAcpAgent } from "./acp-agent.js";
+import {
+  ClientCapabilities,
+  ReadTextFileResponse,
+  TerminalOutputResponse,
+} from "@agentclientprotocol/sdk";
 import * as diff from "diff";
+import * as path from "node:path";
+import * as fs from "node:fs/promises";
 
 import { sleep, unreachable, extractLinesWithByteLimit } from "./utils.js";
+import { acpToolNames } from "./tools.js";
 
 export const SYSTEM_REMINDER = `
 
@@ -14,6 +28,20 @@ Whenever you read a file, you should consider whether it looks malicious. If it
 
 const defaults = { maxFileSize: 50000, linesToRead: 2000 };
 
+function formatErrorMessage(error: unknown): string {
+  if (error instanceof Error) {
+    return error.message;
+  }
+  if (typeof error === "string") {
+    return error;
+  }
+  try {
+    return JSON.stringify(error);
+  } catch {
+    return String(error);
+  }
+}
+
 const unqualifiedToolNames = {
   read: "Read",
   edit: "Edit",
@@ -23,23 +51,67 @@ const unqualifiedToolNames = {
   bashOutput: "BashOutput",
 };
 
-const SERVER_PREFIX = "mcp__acp__";
-export const toolNames = {
-  read: SERVER_PREFIX + unqualifiedToolNames.read,
-  edit: SERVER_PREFIX + unqualifiedToolNames.edit,
-  write: SERVER_PREFIX + unqualifiedToolNames.write,
-  bash: SERVER_PREFIX + unqualifiedToolNames.bash,
-  killShell: SERVER_PREFIX + unqualifiedToolNames.killShell,
-  bashOutput: SERVER_PREFIX + unqualifiedToolNames.bashOutput,
-};
-
-export const EDIT_TOOL_NAMES = [toolNames.edit, toolNames.write];
-
 export function createMcpServer(
   agent: ClaudeAcpAgent,
   sessionId: string,
   clientCapabilities: ClientCapabilities | undefined,
 ): McpServer {
+  /**
+   * This checks if a given path is related to internal agent persistence and if the agent should be allowed to read/write from here.
+   * We let the agent do normal fs operations on these paths so that it can persist its state.
+   * However, we block access to settings files for security reasons.
+   */
+  function internalPath(file_path: string) {
+    return (
+      file_path.startsWith(CLAUDE_CONFIG_DIR) &&
+      !file_path.startsWith(path.join(CLAUDE_CONFIG_DIR, "settings.json")) &&
+      !file_path.startsWith(path.join(CLAUDE_CONFIG_DIR, "session-env"))
+    );
+  }
+
+  async function readTextFile(input: FileReadInput): Promise<ReadTextFileResponse> {
+    if (internalPath(input.file_path)) {
+      const content = await fs.readFile(input.file_path, "utf8");
+
+      // eslint-disable-next-line eqeqeq
+      if (input.offset != null || input.limit != null) {
+        const lines = content.split("\n");
+
+        // Apply offset and limit if provided
+        const offset = input.offset ?? 1;
+        const limit = input.limit ?? lines.length;
+
+        // Extract the requested lines (offset is 1-based)
+        const startIndex = Math.max(0, offset - 1);
+        const endIndex = Math.min(lines.length, startIndex + limit);
+        const selectedLines = lines.slice(startIndex, endIndex);
+
+        return { content: selectedLines.join("\n") };
+      } else {
+        return { content };
+      }
+    }
+
+    return agent.readTextFile({
+      sessionId,
+      path: input.file_path,
+      line: input.offset,
+      limit: input.limit,
+    });
+  }
+
+  async function writeTextFile(input: FileWriteInput): Promise<void> {
+    if (internalPath(input.file_path)) {
+      await fs.writeFile(input.file_path, input.content, "utf8");
+    } else {
+      await agent.writeTextFile({
+        sessionId,
+        path: input.file_path,
+        content: input.content,
+      });
+    }
+  }
+
   // Create MCP server
   const server = new McpServer({ name: "acp", version: "1.0.0" }, { capabilities: { tools: {} } });
 
@@ -50,7 +122,7 @@ export function createMcpServer(
         title: unqualifiedToolNames.read,
         description: `Reads the content of the given file in the project.
 
-In sessions with ${toolNames.read} always use it instead of Read as it contains the most up-to-date contents.
+In sessions with ${acpToolNames.read} always use it instead of Read as it contains the most up-to-date contents.
 
 Reads a file from the local filesystem. If the User provides a path to a file assume that path is valid. It is okay to read a file that does not exist; an error will be returned.
 
@@ -60,7 +132,7 @@ Usage:
 - You can optionally specify a line offset and limit (especially handy for long files), but it's recommended to read the whole file by not providing these parameters
 - Any files larger than ${defaults.maxFileSize} bytes will be truncated
 - This tool allows Claude Code to read images (eg PNG, JPG, etc). When reading an image file the contents are presented visually as Claude Code is a multimodal LLM.
-- This tool can only read files, not directories. To read a directory, use an ls command via the ${toolNames.bash} tool.
+- This tool can only read files, not directories. To read a directory, use an ls command via the ${acpToolNames.bash} tool.
 - You have the capability to call multiple tools in a single response. It is always better to speculatively read multiple files as a batch that are potentially useful.`,
         inputSchema: {
           file_path: z.string().describe("The absolute path to the file to read"),
@@ -87,7 +159,7 @@ Usage:
           idempotentHint: false,
         },
       },
-      async (input) => {
+      async (input: FileReadInput) => {
         try {
           const session = agent.sessions[sessionId];
           if (!session) {
@@ -101,12 +173,7 @@ Usage:
             };
           }
 
-          const readResponse = await agent.readTextFile({
-            sessionId,
-            path: input.file_path,
-            line: input.offset,
-            limit: input.limit,
-          });
+          const readResponse = await readTextFile(input);
 
           if (typeof readResponse?.content !== "string") {
             throw new Error(`No file contents for ${input.file_path}.`);
@@ -117,13 +184,13 @@ Usage:
 
           // Construct informative message about what was read
           let readInfo = "";
-          if (input.offset > 1 || result.wasLimited) {
+          if ((input.offset && input.offset > 1) || result.wasLimited) {
             readInfo = "\n\n<file-read-info>";
 
             if (result.wasLimited) {
               readInfo += `Read ${result.linesRead} lines (hit 50KB limit). `;
-            } else {
-              readInfo += `Read lines ${input.offset}-${result.linesRead}. `;
+            } else if (input.offset && input.offset > 1) {
+              readInfo += `Read lines ${input.offset}-${input.offset + result.linesRead}.`;
             }
 
             if (result.wasLimited) {
@@ -141,12 +208,13 @@ Usage:
               },
             ],
           };
-        } catch (error: any) {
+        } catch (error) {
           return {
+            isError: true,
             content: [
               {
                 type: "text",
-                text: "Reading file failed: " + error.message,
+                text: "Reading file failed: " + formatErrorMessage(error),
               },
             ],
           };
@@ -162,12 +230,12 @@ Usage:
         title: unqualifiedToolNames.write,
         description: `Writes a file to the local filesystem..
 
-In sessions with ${toolNames.write} always use it instead of Write as it will
+In sessions with ${acpToolNames.write} always use it instead of Write as it will
 allow the user to conveniently review changes.
 
 Usage:
 - This tool will overwrite the existing file if there is one at the provided path.
-- If this is an existing file, you MUST use the ${toolNames.read} tool first to read the file's contents. This tool will fail if you did not read the file first.
+- If this is an existing file, you MUST use the ${acpToolNames.read} tool first to read the file's contents. This tool will fail if you did not read the file first.
 - ALWAYS prefer editing existing files in the codebase. NEVER write new files unless explicitly required.
 - NEVER proactively create documentation files (*.md) or README files. Only create documentation files if explicitly requested by the User.
 - Only use emojis if the user explicitly requests it. Avoid writing emojis to files unless asked.`,
@@ -185,7 +253,7 @@ Usage:
           idempotentHint: false,
         },
       },
-      async (input) => {
+      async (input: FileWriteInput) => {
         try {
           const session = agent.sessions[sessionId];
           if (!session) {
@@ -198,21 +266,23 @@ Usage:
               ],
             };
           }
-          await agent.writeTextFile({
-            sessionId,
-            path: input.file_path,
-            content: input.content,
-          });
+          await writeTextFile(input);
 
-          return {
-            content: [],
-          };
-        } catch (error: any) {
           return {
             content: [
               {
                 type: "text",
-                text: "Writing file failed: " + error.message,
+                text: `The file ${input.file_path} has been updated successfully.`,
+              },
+            ],
+          };
+        } catch (error) {
+          return {
+            isError: true,
+            content: [
+              {
+                type: "text",
+                text: "Writing file failed: " + formatErrorMessage(error),
               },
             ],
           };
@@ -226,11 +296,11 @@ Usage:
         title: unqualifiedToolNames.edit,
         description: `Performs exact string replacements in files.
 
-In sessions with ${toolNames.edit} always use it instead of Edit as it will
+In sessions with ${acpToolNames.edit} always use it instead of Edit as it will
 allow the user to conveniently review changes.
 
 Usage:
-- You must use your \`${toolNames.read}\` tool at least once in the conversation before editing. This tool will error if you attempt an edit without reading the file.
+- You must use your \`${acpToolNames.read}\` tool at least once in the conversation before editing. This tool will error if you attempt an edit without reading the file.
 - When editing text from Read tool output, ensure you preserve the exact indentation (tabs/spaces) as it appears.
 - ALWAYS prefer editing existing files in the codebase. NEVER write new files unless explicitly required.
 - Only use emojis if the user explicitly requests it. Avoid adding emojis to files unless asked.
@@ -246,7 +316,7 @@ Usage:
             .boolean()
             .default(false)
             .optional()
-            .describe("Replace all occurences of old_string (default false)"),
+            .describe("Replace all occurrences of old_string (default false)"),
         },
         annotations: {
           title: "Edit file",
@@ -256,7 +326,7 @@ Usage:
           idempotentHint: false,
         },
       },
-      async (input) => {
+      async (input: FileEditInput) => {
         try {
           const session = agent.sessions[sessionId];
           if (!session) {
@@ -270,9 +340,8 @@ Usage:
             };
           }
 
-          const readResponse = await agent.readTextFile({
-            sessionId,
-            path: input.file_path,
+          const readResponse = await readTextFile({
+            file_path: input.file_path,
           });
 
           if (typeof readResponse?.content !== "string") {
@@ -289,11 +358,7 @@ Usage:
 
           const patch = diff.createPatch(input.file_path, readResponse.content, newContent);
 
-          await agent.writeTextFile({
-            sessionId,
-            path: input.file_path,
-            content: newContent,
-          });
+          await writeTextFile({ file_path: input.file_path, content: newContent });
 
           return {
             content: [
@@ -303,12 +368,13 @@ Usage:
               },
             ],
           };
-        } catch (error: any) {
+        } catch (error) {
           return {
+            isError: true,
             content: [
               {
                 type: "text",
-                text: "Editing file failed: " + (error?.message ?? String(error)),
+                text: "Editing file failed: " + formatErrorMessage(error),
               },
             ],
           };
@@ -324,13 +390,10 @@ Usage:
         title: unqualifiedToolNames.bash,
         description: `Executes a bash command
 
-In sessions with ${toolNames.bash} always use it instead of Bash`,
+In sessions with ${acpToolNames.bash} always use it instead of Bash`,
         inputSchema: {
           command: z.string().describe("The command to execute"),
-          timeout: z
-            .number()
-            .default(2 * 60 * 1000)
-            .describe(`Optional timeout in milliseconds (max ${2 * 60 * 1000})`),
+          timeout: z.number().describe(`Optional timeout in milliseconds (max ${2 * 60 * 1000})`),
           description: z.string().optional()
             .describe(`Clear, concise description of what this command does in 5-10 words, in active voice. Examples:
 Input: ls
@@ -348,125 +411,137 @@ Output: Create directory 'foo'`),
             .boolean()
             .default(false)
             .describe(
-              `Set to true to run this command in the background. The tool returns an \`id\` that can be used with the \`${toolNames.bashOutput}\` tool to retrieve the current output, or the \`${toolNames.killShell}\` tool to stop it early.`,
+              `Set to true to run this command in the background. The tool returns an \`id\` that can be used with the \`${acpToolNames.bashOutput}\` tool to retrieve the current output, or the \`${acpToolNames.killShell}\` tool to stop it early.`,
             ),
         },
       },
-      async (input, extra) => {
-        const session = agent.sessions[sessionId];
-        if (!session) {
-          return {
-            content: [
-              {
-                type: "text",
-                text: "The user has left the building",
-              },
-            ],
-          };
-        }
-
-        const toolCallId = extra._meta?.["claudecode/toolUseId"];
-
-        if (typeof toolCallId !== "string") {
-          throw new Error("No tool call ID found");
-        }
-
-        if (!agent.clientCapabilities?.terminal || !agent.client.createTerminal) {
-          throw new Error("unreachable");
-        }
-
-        const handle = await agent.client.createTerminal({
-          command: input.command,
-          env: [{ name: "CLAUDECODE", value: "1" }],
-          sessionId,
-          outputByteLimit: 32_000,
-        });
-
-        await agent.client.sessionUpdate({
-          sessionId,
-          update: {
-            sessionUpdate: "tool_call_update",
-            toolCallId,
-            status: "in_progress",
-            title: input.description,
-            content: [{ type: "terminal", terminalId: handle.id }],
-          },
-        });
-
-        const abortPromise = new Promise((resolve) => {
-          if (extra.signal.aborted) {
-            resolve(null);
-          } else {
-            extra.signal.addEventListener("abort", () => {
-              resolve(null);
-            });
-          }
-        });
-
-        const statusPromise = Promise.race([
-          handle.waitForExit().then((exitStatus) => ({ status: "exited" as const, exitStatus })),
-          abortPromise.then(() => ({ status: "aborted" as const, exitStatus: null })),
-          sleep(input.timeout).then(async () => {
-            if (agent.backgroundTerminals[handle.id]?.status === "started") {
-              await handle.kill();
-            }
-            return { status: "timedOut" as const, exitStatus: null };
-          }),
-        ]);
-
-        if (input.run_in_background) {
-          agent.backgroundTerminals[handle.id] = {
-            handle,
-            lastOutput: null,
-            status: "started",
-          };
-
-          statusPromise.then(async ({ status, exitStatus }) => {
-            const bgTerm = agent.backgroundTerminals[handle.id];
-
-            if (bgTerm.status !== "started") {
-              return;
-            }
-
-            const currentOutput = await handle.currentOutput();
-
-            agent.backgroundTerminals[handle.id] = {
-              status,
-              pendingOutput: {
-                ...currentOutput,
-                output: stripCommonPrefix(bgTerm.lastOutput?.output ?? "", currentOutput.output),
-                exitStatus: exitStatus ?? currentOutput.exitStatus,
-              },
+      async (input: BashInput, extra) => {
+        try {
+          const session = agent.sessions[sessionId];
+          if (!session) {
+            return {
+              content: [
+                {
+                  type: "text",
+                  text: "The user has left the building",
+                },
+              ],
             };
+          }
 
-            return handle.release();
+          const toolCallId = extra._meta?.["claudecode/toolUseId"];
+
+          if (typeof toolCallId !== "string") {
+            throw new Error("No tool call ID found");
+          }
+
+          if (!agent.clientCapabilities?.terminal || !agent.client.createTerminal) {
+            throw new Error("unreachable");
+          }
+
+          const handle = await agent.client.createTerminal({
+            command: input.command,
+            env: [{ name: "CLAUDECODE", value: "1" }],
+            sessionId,
+            outputByteLimit: 32_000,
           });
 
+          await agent.client.sessionUpdate({
+            sessionId,
+            update: {
+              sessionUpdate: "tool_call_update",
+              toolCallId,
+              status: "in_progress",
+              title: input.description,
+              content: [{ type: "terminal", terminalId: handle.id }],
+            },
+          });
+
+          const abortPromise = new Promise((resolve) => {
+            if (extra.signal.aborted) {
+              resolve(null);
+            } else {
+              extra.signal.addEventListener("abort", () => {
+                resolve(null);
+              });
+            }
+          });
+
+          const statusPromise = Promise.race([
+            handle.waitForExit().then((exitStatus) => ({ status: "exited" as const, exitStatus })),
+            abortPromise.then(() => ({ status: "aborted" as const, exitStatus: null })),
+            sleep(input.timeout ?? 2 * 60 * 1000).then(async () => {
+              if (agent.backgroundTerminals[handle.id]?.status === "started") {
+                await handle.kill();
+              }
+              return { status: "timedOut" as const, exitStatus: null };
+            }),
+          ]);
+
+          if (input.run_in_background) {
+            agent.backgroundTerminals[handle.id] = {
+              handle,
+              lastOutput: null,
+              status: "started",
+            };
+
+            statusPromise.then(async ({ status, exitStatus }) => {
+              const bgTerm = agent.backgroundTerminals[handle.id];
+
+              if (bgTerm.status !== "started") {
+                return;
+              }
+
+              const currentOutput = await handle.currentOutput();
+
+              agent.backgroundTerminals[handle.id] = {
+                status,
+                pendingOutput: {
+                  ...currentOutput,
+                  output: stripCommonPrefix(bgTerm.lastOutput?.output ?? "", currentOutput.output),
+                  exitStatus: exitStatus ?? currentOutput.exitStatus,
+                },
+              };
+
+              return handle.release();
+            });
+
+            return {
+              content: [
+                {
+                  type: "text",
+                  text: `Command started in background with id: ${handle.id}`,
+                },
+              ],
+            };
+          }
+
+          await using terminal = handle;
+
+          const { status } = await statusPromise;
+
+          if (status === "aborted") {
+            return {
+              content: [{ type: "text", text: "Tool cancelled by user" }],
+            };
+          }
+
+          const output = await terminal.currentOutput();
+
           return {
+            content: [{ type: "text", text: toolCommandOutput(status, output) }],
+          };
+        } catch (error) {
+          return {
+            isError: true,
             content: [
               {
                 type: "text",
-                text: `Command started in background with id: ${handle.id}`,
+                text: "Running bash command failed: " + formatErrorMessage(error),
               },
             ],
           };
         }
-
-        await using terminal = handle;
-
-        const { status } = await statusPromise;
-
-        if (status === "aborted") {
-          return {
-            content: [{ type: "text", text: "Tool cancelled by user" }],
-          };
-        }
-
-        const output = await terminal.currentOutput();
-
-        return {
-          content: [{ type: "text", text: toolCommandOutput(status, output) }],
-        };
       },
     );
 
@@ -475,50 +550,111 @@ Output: Create directory 'foo'`),
       {
         title: unqualifiedToolNames.bashOutput,
         description: `- Retrieves output from a running or completed background bash shell
-- Takes a shell_id parameter identifying the shell
+- Takes a bash_id parameter identifying the shell
 - Always returns only new output since the last check
 - Returns stdout and stderr output along with shell status
 - Use this tool when you need to monitor or check the output of a long-running shell
 
-In sessions with ${toolNames.bashOutput} always use it instead of BashOutput.`,
+In sessions with ${acpToolNames.bashOutput} always use it for output from Bash commands instead of TaskOutput.`,
         inputSchema: {
-          shell_id: z
+          task_id: z
             .string()
-            .describe(`The id of the background bash command as returned by \`${toolNames.bash}\``),
+            .describe(
+              `The id of the background bash command as returned by \`${acpToolNames.bash}\``,
+            ),
+          block: z.boolean().describe("Whether to wait for completion"),
+          timeout: z.number().describe("Max wait time in ms"),
         },
       },
-      async (input) => {
-        const bgTerm = agent.backgroundTerminals[input.shell_id];
+      async (input: TaskOutputInput) => {
+        try {
+          const bgTerm = agent.backgroundTerminals[input.task_id];
 
-        if (!bgTerm) {
-          throw new Error(`Unknown shell ${input.shell_id}`);
-        }
+          if (!bgTerm) {
+            throw new Error(`Unknown shell ${input.task_id}`);
+          }
 
-        if (bgTerm.status === "started") {
-          const newOutput = await bgTerm.handle.currentOutput();
-          const strippedOutput = stripCommonPrefix(
-            bgTerm.lastOutput?.output ?? "",
-            newOutput.output,
-          );
-          bgTerm.lastOutput = newOutput;
+          if (input.block && bgTerm.status === "started") {
+            const statusPromise = Promise.race([
+              bgTerm.handle
+                .waitForExit()
+                .then((exitStatus) => ({ status: "exited" as const, exitStatus })),
+              sleep(input.timeout ?? 2 * 60 * 1000).then(async () => {
+                if (bgTerm.status === "started") {
+                  await bgTerm.handle.kill();
+                }
+                return { status: "timedOut" as const, exitStatus: null };
+              }),
+            ]);
 
-          return {
-            content: [
-              {
-                type: "text",
-                text: toolCommandOutput(bgTerm.status, {
-                  ...newOutput,
-                  output: strippedOutput,
-                }),
+            const { status, exitStatus } = await statusPromise;
+            const currentOutput = await bgTerm.handle.currentOutput();
+            const strippedOutput = stripCommonPrefix(
+              bgTerm.lastOutput?.output ?? "",
+              currentOutput.output,
+            );
+
+            agent.backgroundTerminals[input.task_id] = {
+              status,
+              pendingOutput: {
+                ...currentOutput,
+                output: strippedOutput,
+                exitStatus: exitStatus ?? currentOutput.exitStatus,
               },
-            ],
-          };
-        } else {
+            };
+
+            await bgTerm.handle.release();
+
+            return {
+              content: [
+                {
+                  type: "text",
+                  text: toolCommandOutput(status, {
+                    ...currentOutput,
+                    output: strippedOutput,
+                    exitStatus: exitStatus ?? currentOutput.exitStatus,
+                  }),
+                },
+              ],
+            };
+          }
+
+          if (bgTerm.status === "started") {
+            const newOutput = await bgTerm.handle.currentOutput();
+            const strippedOutput = stripCommonPrefix(
+              bgTerm.lastOutput?.output ?? "",
+              newOutput.output,
+            );
+            bgTerm.lastOutput = newOutput;
+
+            return {
+              content: [
+                {
+                  type: "text",
+                  text: toolCommandOutput(bgTerm.status, {
+                    ...newOutput,
+                    output: strippedOutput,
+                  }),
+                },
+              ],
+            };
+          } else {
+            return {
+              content: [
+                {
+                  type: "text",
+                  text: toolCommandOutput(bgTerm.status, bgTerm.pendingOutput),
+                },
+              ],
+            };
+          }
+        } catch (error) {
           return {
+            isError: true,
             content: [
               {
                 type: "text",
-                text: toolCommandOutput(bgTerm.status, bgTerm.pendingOutput),
+                text: "Retrieving bash output failed: " + formatErrorMessage(error),
               },
             ],
           };
@@ -535,57 +671,71 @@ In sessions with ${toolNames.bashOutput} always use it instead of BashOutput.`,
 - Returns a success or failure status
 - Use this tool when you need to terminate a long-running shell
 
-In sessions with ${toolNames.killShell} always use it instead of KillShell.`,
+In sessions with ${acpToolNames.killShell} always use it instead of KillShell.`,
         inputSchema: {
           shell_id: z
             .string()
-            .describe(`The id of the background bash command as returned by \`${toolNames.bash}\``),
+            .describe(
+              `The id of the background bash command as returned by \`${acpToolNames.bash}\``,
+            ),
         },
       },
       async (input) => {
-        const bgTerm = agent.backgroundTerminals[input.shell_id];
+        try {
+          const bgTerm = agent.backgroundTerminals[input.shell_id];
 
-        if (!bgTerm) {
-          throw new Error(`Unknown shell ${input.shell_id}`);
-        }
+          if (!bgTerm) {
+            throw new Error(`Unknown shell ${input.shell_id}`);
+          }
 
-        switch (bgTerm.status) {
-          case "started": {
-            await bgTerm.handle.kill();
-            const currentOutput = await bgTerm.handle.currentOutput();
-            agent.backgroundTerminals[bgTerm.handle.id] = {
-              status: "killed",
-              pendingOutput: {
-                ...currentOutput,
-                output: stripCommonPrefix(bgTerm.lastOutput?.output ?? "", currentOutput.output),
+          switch (bgTerm.status) {
+            case "started": {
+              await bgTerm.handle.kill();
+              const currentOutput = await bgTerm.handle.currentOutput();
+              agent.backgroundTerminals[bgTerm.handle.id] = {
+                status: "killed",
+                pendingOutput: {
+                  ...currentOutput,
+                  output: stripCommonPrefix(bgTerm.lastOutput?.output ?? "", currentOutput.output),
+                },
+              };
+              await bgTerm.handle.release();
+
+              return {
+                content: [{ type: "text", text: "Command killed successfully." }],
+              };
+            }
+            case "aborted":
+              return {
+                content: [{ type: "text", text: "Command aborted by user." }],
+              };
+            case "exited":
+              return {
+                content: [{ type: "text", text: "Command had already exited." }],
+              };
+            case "killed":
+              return {
+                content: [{ type: "text", text: "Command was already killed." }],
+              };
+            case "timedOut":
+              return {
+                content: [{ type: "text", text: "Command killed by timeout." }],
+              };
+            default: {
+              unreachable(bgTerm);
+              throw new Error("Unexpected background terminal status");
+            }
+          }
+        } catch (error) {
+          return {
+            isError: true,
+            content: [
+              {
+                type: "text",
+                text: "Killing shell failed: " + formatErrorMessage(error),
               },
-            };
-            await bgTerm.handle.release();
-
-            return {
-              content: [{ type: "text", text: "Command killed successfully." }],
-            };
-          }
-          case "aborted":
-            return {
-              content: [{ type: "text", text: "Command aborted by user." }],
-            };
-          case "exited":
-            return {
-              content: [{ type: "text", text: "Command had already exited." }],
-            };
-          case "killed":
-            return {
-              content: [{ type: "text", text: "Command was already killed." }],
-            };
-          case "timedOut":
-            return {
-              content: [{ type: "text", text: "Command killed by timeout." }],
-            };
-          default: {
-            unreachable(bgTerm);
-            throw new Error("Unexpected background terminal status");
-          }
+            ],
+          };
         }
       },
     );

src/settings.ts

@@ -0,0 +1,528 @@
+import * as fs from "node:fs";
+import * as path from "node:path";
+import * as os from "node:os";
+import { minimatch } from "minimatch";
+import { ACP_TOOL_NAME_PREFIX, acpToolNames } from "./tools.js";
+import { CLAUDE_CONFIG_DIR } from "./acp-agent.js";
+
+/**
+ * Permission rule format examples:
+ * - "Read" - matches all Read tool calls
+ * - "Read(./.env)" - matches specific path
+ * - "Read(./.env.*)" - glob pattern
+ * - "Read(./secrets/**)" - recursive glob
+ * - "Bash(npm run lint)" - exact command prefix
+ * - "Bash(npm run:*)" - command prefix with wildcard
+ *
+ * Docs: https://code.claude.com/docs/en/iam#tool-specific-permission-rules
+ */
+
+export interface PermissionSettings {
+  allow?: string[];
+  deny?: string[];
+  ask?: string[];
+  additionalDirectories?: string[];
+  defaultMode?: string;
+}
+
+export interface ClaudeCodeSettings {
+  permissions?: PermissionSettings;
+  env?: Record<string, string>;
+  model?: string;
+}
+
+export type PermissionDecision = "allow" | "deny" | "ask";
+
+export interface PermissionCheckResult {
+  decision: PermissionDecision;
+  rule?: string;
+  source?: "allow" | "deny" | "ask";
+}
+
+interface ParsedRule {
+  toolName: string;
+  argument?: string;
+  isWildcard?: boolean;
+}
+
+/**
+ * Shell operators that can be used for command chaining/injection
+ * These should cause a prefix match to fail to prevent bypasses like:
+ * - "safe-cmd && malicious-cmd"
+ * - "safe-cmd; malicious-cmd"
+ * - "safe-cmd | malicious-cmd"
+ * - "safe-cmd || malicious-cmd"
+ * - "$(malicious-cmd)"
+ * - "`malicious-cmd`"
+ */
+const SHELL_OPERATORS = ["&&", "||", ";", "|", "$(", "`", "\n"];
+
+/**
+ * Checks if a string contains shell operators that could allow command chaining
+ */
+function containsShellOperator(str: string): boolean {
+  return SHELL_OPERATORS.some((op) => str.includes(op));
+}
+
+/*
+ * Tools that modify files. Per Claude Code docs:
+ * "Edit rules apply to all built-in tools that edit files."
+ * This means an Edit(...) rule should match Write, MultiEdit, etc.
+ */
+const FILE_EDITING_TOOLS = [acpToolNames.edit, acpToolNames.write];
+
+/**
+ * Tools that read files. Per Claude Code docs:
+ * "Claude will make a best-effort attempt to apply Read rules to all built-in tools
+ * that read files like Grep and Glob."
+ * This means a Read(...) rule should match Grep, Glob, etc.
+ */
+const FILE_READING_TOOLS = [acpToolNames.read];
+
+/**
+ * Functions to extract the relevant argument from tool input for permission matching
+ */
+const TOOL_ARG_ACCESSORS: Record<string, (input: unknown) => string | undefined> = {
+  mcp__acp__Read: (input) => (input as { file_path?: string })?.file_path,
+  mcp__acp__Edit: (input) => (input as { file_path?: string })?.file_path,
+  mcp__acp__Write: (input) => (input as { file_path?: string })?.file_path,
+  mcp__acp__Bash: (input) => (input as { command?: string })?.command,
+};
+
+/**
+ * Parses a permission rule string into its components
+ * Examples:
+ *   "Read" -> { toolName: "Read" }
+ *   "Read(./.env)" -> { toolName: "Read", argument: "./.env" }
+ *   "Bash(npm run:*)" -> { toolName: "Bash", argument: "npm run", isWildcard: true }
+ */
+function parseRule(rule: string): ParsedRule {
+  const match = rule.match(/^(\w+)(?:\((.+)\))?$/);
+  if (!match) {
+    return { toolName: rule };
+  }
+
+  const [, toolName, argument] = match;
+
+  if (argument && argument.endsWith(":*")) {
+    return {
+      toolName,
+      argument: argument.slice(0, -2),
+      isWildcard: true,
+    };
+  }
+
+  return { toolName, argument };
+}
+
+/**
+ * Normalizes a path for comparison:
+ * - Expands ~ to home directory
+ * - Resolves relative paths against cwd
+ * - Normalizes path separators
+ */
+function normalizePath(filePath: string, cwd: string): string {
+  if (filePath.startsWith("~/")) {
+    filePath = path.join(os.homedir(), filePath.slice(2));
+  } else if (filePath.startsWith("./")) {
+    filePath = path.join(cwd, filePath.slice(2));
+  } else if (!path.isAbsolute(filePath)) {
+    filePath = path.join(cwd, filePath);
+  }
+  // Convert backslashes to forward slashes for minimatch compatibility on Windows
+  return path.normalize(filePath).replace(/\\/g, "/");
+}
+
+/**
+ * Checks if a file path matches a glob pattern
+ */
+function matchesGlob(pattern: string, filePath: string, cwd: string): boolean {
+  const normalizedPattern = normalizePath(pattern, cwd);
+  const normalizedPath = normalizePath(filePath, cwd);
+
+  return minimatch(normalizedPath, normalizedPattern, {
+    dot: true,
+    matchBase: false,
+    nocase: process.platform === "win32",
+  });
+}
+
+/**
+ * Checks if a tool invocation matches a parsed permission rule
+ */
+function matchesRule(rule: ParsedRule, toolName: string, toolInput: unknown, cwd: string): boolean {
+  // Per Claude Code docs:
+  // - "Edit rules apply to all built-in tools that edit files."
+  // - "Claude will make a best-effort attempt to apply Read rules to all built-in tools
+  //    that read files like Grep, Glob, and LS."
+  const ruleAppliesToTool =
+    (rule.toolName === "Bash" && toolName === acpToolNames.bash) ||
+    (rule.toolName === "Edit" && FILE_EDITING_TOOLS.includes(toolName)) ||
+    (rule.toolName === "Read" && FILE_READING_TOOLS.includes(toolName));
+
+  if (!ruleAppliesToTool) {
+    return false;
+  }
+
+  if (!rule.argument) {
+    return true;
+  }
+
+  const argAccessor = TOOL_ARG_ACCESSORS[toolName];
+  if (!argAccessor) {
+    return true;
+  }
+
+  const actualArg = argAccessor(toolInput);
+  if (!actualArg) {
+    return false;
+  }
+
+  if (toolName === acpToolNames.bash) {
+    // Per Claude Code docs: https://code.claude.com/docs/en/iam#tool-specific-permission-rules
+    // - Bash(npm run build) matches the EXACT command "npm run build"
+    // - Bash(npm run test:*) matches commands STARTING WITH "npm run test"
+    // The :* suffix enables prefix matching, without it the match is exact
+    //
+    // Also from docs: "Claude Code is aware of shell operators (like &&) so a prefix match
+    // rule like Bash(safe-cmd:*) won't give it permission to run the command safe-cmd && other-cmd"
+    if (rule.isWildcard) {
+      if (!actualArg.startsWith(rule.argument)) {
+        return false;
+      }
+      // Check that the matched prefix isn't followed by shell operators that could
+      // allow command chaining/injection
+      const remainder = actualArg.slice(rule.argument.length);
+      if (containsShellOperator(remainder)) {
+        return false;
+      }
+      return true;
+    }
+    return actualArg === rule.argument;
+  }
+
+  // For file-based tools (Read, Edit, Write), use glob matching
+  return matchesGlob(rule.argument, actualArg, cwd);
+}
+
+/**
+ * Reads and parses a JSON settings file, returning an empty object if not found or invalid
+ */
+async function loadSettingsFile(filePath: string | null): Promise<ClaudeCodeSettings> {
+  if (!filePath) {
+    return {};
+  }
+
+  try {
+    const content = await fs.promises.readFile(filePath, "utf-8");
+    return JSON.parse(content) as ClaudeCodeSettings;
+  } catch {
+    return {};
+  }
+}
+
+/**
+ * Gets the enterprise settings path based on the current platform
+ */
+export function getManagedSettingsPath(): string {
+  switch (process.platform) {
+    case "darwin":
+      return "/Library/Application Support/ClaudeCode/managed-settings.json";
+    case "linux":
+      return "/etc/claude-code/managed-settings.json";
+    case "win32":
+      return "C:\\Program Files\\ClaudeCode\\managed-settings.json";
+    default:
+      return "/etc/claude-code/managed-settings.json";
+  }
+}
+
+export interface SettingsManagerOptions {
+  onChange?: () => void;
+  logger?: { log: (...args: any[]) => void; error: (...args: any[]) => void };
+}
+
+/**
+ * Manages Claude Code settings from multiple sources with proper precedence.
+ *
+ * Settings are loaded from (in order of increasing precedence):
+ * 1. User settings (~/.claude/settings.json)
+ * 2. Project settings (<cwd>/.claude/settings.json)
+ * 3. Local project settings (<cwd>/.claude/settings.local.json)
+ * 4. Enterprise managed settings (platform-specific path)
+ *
+ * The manager watches all settings files for changes and automatically reloads.
+ */
+export class SettingsManager {
+  private cwd: string;
+  private userSettings: ClaudeCodeSettings = {};
+  private projectSettings: ClaudeCodeSettings = {};
+  private localSettings: ClaudeCodeSettings = {};
+  private enterpriseSettings: ClaudeCodeSettings = {};
+  private mergedSettings: ClaudeCodeSettings = {};
+  private watchers: fs.FSWatcher[] = [];
+  private onChange?: () => void;
+  private logger: { log: (...args: any[]) => void; error: (...args: any[]) => void };
+  private initialized = false;
+  private debounceTimer: ReturnType<typeof setTimeout> | null = null;
+
+  constructor(cwd: string, options?: SettingsManagerOptions) {
+    this.cwd = cwd;
+    this.onChange = options?.onChange;
+    this.logger = options?.logger ?? console;
+  }
+
+  /**
+   * Initialize the settings manager by loading all settings and setting up file watchers
+   */
+  async initialize(): Promise<void> {
+    if (this.initialized) {
+      return;
+    }
+
+    await this.loadAllSettings();
+    this.setupWatchers();
+    this.initialized = true;
+  }
+
+  /**
+   * Returns the path to the user settings file
+   */
+  private getUserSettingsPath(): string {
+    return path.join(CLAUDE_CONFIG_DIR, "settings.json");
+  }
+
+  /**
+   * Returns the path to the project settings file
+   */
+  private getProjectSettingsPath(): string {
+    return path.join(this.cwd, ".claude", "settings.json");
+  }
+
+  /**
+   * Returns the path to the local project settings file
+   */
+  private getLocalSettingsPath(): string {
+    return path.join(this.cwd, ".claude", "settings.local.json");
+  }
+
+  /**
+   * Loads settings from all sources
+   */
+  private async loadAllSettings(): Promise<void> {
+    const [userSettings, projectSettings, localSettings, enterpriseSettings] = await Promise.all([
+      loadSettingsFile(this.getUserSettingsPath()),
+      loadSettingsFile(this.getProjectSettingsPath()),
+      loadSettingsFile(this.getLocalSettingsPath()),
+      loadSettingsFile(getManagedSettingsPath()),
+    ]);
+
+    this.userSettings = userSettings;
+    this.projectSettings = projectSettings;
+    this.localSettings = localSettings;
+    this.enterpriseSettings = enterpriseSettings;
+
+    this.mergeSettings();
+  }
+
+  /**
+   * Merges all settings sources with proper precedence.
+   * For permissions, rules from all sources are combined.
+   * Deny rules always take precedence during permission checks.
+   */
+  private mergeSettings(): void {
+    const allSettings = [
+      this.userSettings,
+      this.projectSettings,
+      this.localSettings,
+      this.enterpriseSettings,
+    ];
+
+    const merged: ClaudeCodeSettings = {
+      permissions: {
+        allow: [],
+        deny: [],
+        ask: [],
+      },
+    };
+
+    for (const settings of allSettings) {
+      if (settings.permissions) {
+        if (settings.permissions.allow) {
+          merged.permissions!.allow!.push(...settings.permissions.allow);
+        }
+        if (settings.permissions.deny) {
+          merged.permissions!.deny!.push(...settings.permissions.deny);
+        }
+        if (settings.permissions.ask) {
+          merged.permissions!.ask!.push(...settings.permissions.ask);
+        }
+        if (settings.permissions.additionalDirectories) {
+          merged.permissions!.additionalDirectories = [
+            ...(merged.permissions!.additionalDirectories || []),
+            ...settings.permissions.additionalDirectories,
+          ];
+        }
+        if (settings.permissions.defaultMode) {
+          merged.permissions!.defaultMode = settings.permissions.defaultMode;
+        }
+      }
+
+      if (settings.env) {
+        merged.env = { ...merged.env, ...settings.env };
+      }
+
+      if (settings.model) {
+        merged.model = settings.model;
+      }
+    }
+
+    this.mergedSettings = merged;
+  }
+
+  /**
+   * Sets up file watchers for all settings files
+   */
+  private setupWatchers(): void {
+    const paths = [
+      this.getUserSettingsPath(),
+      this.getProjectSettingsPath(),
+      this.getLocalSettingsPath(),
+      getManagedSettingsPath(),
+    ];
+
+    for (const filePath of paths) {
+      if (!filePath) continue;
+
+      try {
+        const dir = path.dirname(filePath);
+        const filename = path.basename(filePath);
+
+        if (fs.existsSync(dir)) {
+          const watcher = fs.watch(dir, (eventType, changedFilename) => {
+            if (changedFilename === filename) {
+              this.handleSettingsChange();
+            }
+          });
+
+          watcher.on("error", (error) => {
+            this.logger.error(`Settings watcher error for ${filePath}:`, error);
+          });
+
+          this.watchers.push(watcher);
+        }
+      } catch (error) {
+        this.logger.error(`Failed to set up watcher for ${filePath}:`, error);
+      }
+    }
+  }
+
+  /**
+   * Handles settings file changes with debouncing to avoid rapid reloads
+   */
+  private handleSettingsChange(): void {
+    if (this.debounceTimer) {
+      clearTimeout(this.debounceTimer);
+    }
+
+    this.debounceTimer = setTimeout(async () => {
+      this.debounceTimer = null;
+      try {
+        await this.loadAllSettings();
+        this.onChange?.();
+      } catch (error) {
+        this.logger.error("Failed to reload settings:", error);
+      }
+    }, 100);
+  }
+
+  /**
+   * Checks if a tool invocation is allowed based on the loaded settings.
+   *
+   * @param toolName - The tool name (can be ACP-prefixed like mcp__acp__Read or plain like Read)
+   * @param toolInput - The tool input object
+   * @returns The permission decision and matching rule info
+   */
+  checkPermission(toolName: string, toolInput: unknown): PermissionCheckResult {
+    if (!toolName.startsWith(ACP_TOOL_NAME_PREFIX)) {
+      return { decision: "ask" };
+    }
+
+    const permissions = this.mergedSettings.permissions;
+
+    if (!permissions) {
+      return { decision: "ask" };
+    }
+
+    // Check deny rules first (highest priority)
+    for (const rule of permissions.deny || []) {
+      const parsed = parseRule(rule);
+      if (matchesRule(parsed, toolName, toolInput, this.cwd)) {
+        return { decision: "deny", rule, source: "deny" };
+      }
+    }
+
+    // Check allow rules
+    for (const rule of permissions.allow || []) {
+      const parsed = parseRule(rule);
+      if (matchesRule(parsed, toolName, toolInput, this.cwd)) {
+        return { decision: "allow", rule, source: "allow" };
+      }
+    }
+
+    // Check ask rules
+    for (const rule of permissions.ask || []) {
+      const parsed = parseRule(rule);
+      if (matchesRule(parsed, toolName, toolInput, this.cwd)) {
+        return { decision: "ask", rule, source: "ask" };
+      }
+    }
+
+    // No matching rule - default to ask
+    return { decision: "ask" };
+  }
+
+  /**
+   * Returns the current merged settings
+   */
+  getSettings(): ClaudeCodeSettings {
+    return this.mergedSettings;
+  }
+
+  /**
+   * Returns the current working directory
+   */
+  getCwd(): string {
+    return this.cwd;
+  }
+
+  /**
+   * Updates the working directory and reloads project-specific settings
+   */
+  async setCwd(cwd: string): Promise<void> {
+    if (this.cwd === cwd) {
+      return;
+    }
+
+    this.dispose();
+    this.cwd = cwd;
+    this.initialized = false;
+    await this.initialize();
+  }
+
+  /**
+   * Disposes of file watchers and cleans up resources
+   */
+  dispose(): void {
+    if (this.debounceTimer) {
+      clearTimeout(this.debounceTimer);
+      this.debounceTimer = null;
+    }
+
+    for (const watcher of this.watchers) {
+      watcher.close();
+    }
+    this.watchers = [];
+    this.initialized = false;
+  }
+}

src/tests/.claude/commands/say-hello.md

@@ -1,6 +1,6 @@
 ---
 description: Say hello
-argument-hint: [name]
+argument-hint: name
 ---
 
 Respond with "Hello $1" and nothing else.

src/tests/acp-agent.test.ts

@@ -21,6 +21,13 @@ import { markdownEscape, toolInfoFromToolUse, toolUpdateFromToolResult } from ".
 import { toAcpNotifications, promptToClaude } from "../acp-agent.js";
 import { query, SDKAssistantMessage } from "@anthropic-ai/claude-agent-sdk";
 import { randomUUID } from "crypto";
+import type {
+  BetaToolResultBlockParam,
+  BetaToolSearchToolResultBlockParam,
+  BetaWebSearchToolResultBlockParam,
+  BetaWebFetchToolResultBlockParam,
+  BetaCodeExecutionToolResultBlockParam,
+} from "@anthropic-ai/sdk/resources/beta.mjs";
 
 describe.skipIf(!process.env.RUN_INTEGRATION_TESTS)("ACP subprocess integration", () => {
   let child: ReturnType<typeof spawn>;
@@ -166,7 +173,7 @@ describe.skipIf(!process.env.RUN_INTEGRATION_TESTS)("ACP subprocess integration"
     expect(commands).toContainEqual({
       name: "say-hello",
       description: "Say hello (project)",
-      input: { hint: "[name]" },
+      input: { hint: "name" },
     });
 
     await connection.prompt({
@@ -251,7 +258,7 @@ describe("tool conversions", () => {
       },
     };
 
-    expect(toolInfoFromToolUse(tool_use, {})).toStrictEqual({
+    expect(toolInfoFromToolUse(tool_use)).toStrictEqual({
       kind: "execute",
       title: "`rm README.md.rm`",
       content: [
@@ -276,7 +283,7 @@ describe("tool conversions", () => {
       },
     };
 
-    expect(toolInfoFromToolUse(tool_use, {})).toStrictEqual({
+    expect(toolInfoFromToolUse(tool_use)).toStrictEqual({
       kind: "search",
       title: "Find `*/**.ts`",
       content: [],
@@ -297,7 +304,7 @@ describe("tool conversions", () => {
       },
     };
 
-    expect(toolInfoFromToolUse(tool_use, {})).toStrictEqual({
+    expect(toolInfoFromToolUse(tool_use)).toStrictEqual({
       kind: "think",
       title: "Handle user's work request",
       content: [
@@ -322,7 +329,7 @@ describe("tool conversions", () => {
       },
     };
 
-    expect(toolInfoFromToolUse(tool_use, {})).toStrictEqual({
+    expect(toolInfoFromToolUse(tool_use)).toStrictEqual({
       kind: "search",
       title: "List the `/Users/test/github/claude-code-acp` directory's contents",
       content: [],
@@ -340,7 +347,7 @@ describe("tool conversions", () => {
       },
     };
 
-    expect(toolInfoFromToolUse(tool_use, {})).toStrictEqual({
+    expect(toolInfoFromToolUse(tool_use)).toStrictEqual({
       kind: "search",
       title: 'grep ".*"',
       content: [],
@@ -358,7 +365,7 @@ describe("tool conversions", () => {
       },
     };
 
-    expect(toolInfoFromToolUse(tool_use, {})).toStrictEqual({
+    expect(toolInfoFromToolUse(tool_use)).toStrictEqual({
       kind: "edit",
       title: "Write /Users/test/project/example.txt",
       content: [
@@ -384,7 +391,7 @@ describe("tool conversions", () => {
       },
     };
 
-    expect(toolInfoFromToolUse(tool_use, {})).toStrictEqual({
+    expect(toolInfoFromToolUse(tool_use)).toStrictEqual({
       kind: "edit",
       title: "Write /Users/test/project/config.json",
       content: [
@@ -409,7 +416,7 @@ describe("tool conversions", () => {
       },
     };
 
-    expect(toolInfoFromToolUse(tool_use, {})).toStrictEqual({
+    expect(toolInfoFromToolUse(tool_use)).toStrictEqual({
       kind: "read",
       title: "Read File",
       content: [],
@@ -427,7 +434,7 @@ describe("tool conversions", () => {
       },
     };
 
-    expect(toolInfoFromToolUse(tool_use, {})).toStrictEqual({
+    expect(toolInfoFromToolUse(tool_use)).toStrictEqual({
       kind: "read",
       title: "Read /Users/test/project/data.json",
       content: [],
@@ -446,7 +453,7 @@ describe("tool conversions", () => {
       },
     };
 
-    expect(toolInfoFromToolUse(tool_use, {})).toStrictEqual({
+    expect(toolInfoFromToolUse(tool_use)).toStrictEqual({
       kind: "read",
       title: "Read /Users/test/project/large.txt (1 - 100)",
       content: [],
@@ -466,7 +473,7 @@ describe("tool conversions", () => {
       },
     };
 
-    expect(toolInfoFromToolUse(tool_use, {})).toStrictEqual({
+    expect(toolInfoFromToolUse(tool_use)).toStrictEqual({
       kind: "read",
       title: "Read /Users/test/project/large.txt (51 - 150)",
       content: [],
@@ -485,7 +492,7 @@ describe("tool conversions", () => {
       },
     };
 
-    expect(toolInfoFromToolUse(tool_use, {})).toStrictEqual({
+    expect(toolInfoFromToolUse(tool_use)).toStrictEqual({
       kind: "read",
       title: "Read /Users/test/project/large.txt (from line 201)",
       content: [],
@@ -493,50 +500,6 @@ describe("tool conversions", () => {
     });
   });
 
-  it("should handle WebFetch tool calls", () => {
-    const tool_use = {
-      type: "tool_use",
-      id: "toolu_01LxEjDn8ci9SAc3qG7LbbXV",
-      name: "WebFetch",
-      input: {
-        url: "https://agentclientprotocol.com",
-        prompt:
-          "Please provide a comprehensive summary of the content on this page, including what the Agent Client Protocol is, its main features, documentation links, and any other relevant information.",
-      },
-    };
-
-    expect(toolInfoFromToolUse(tool_use, {})).toStrictEqual({
-      kind: "fetch",
-      title: "Fetch https://agentclientprotocol.com",
-      content: [
-        {
-          content: {
-            text: "Please provide a comprehensive summary of the content on this page, including what the Agent Client Protocol is, its main features, documentation links, and any other relevant information.",
-            type: "text",
-          },
-          type: "content",
-        },
-      ],
-    });
-  });
-
-  it("should handle WebSearch tool calls", () => {
-    const tool_use = {
-      type: "tool_use",
-      id: "toolu_01NYMwiZFbdoQFxYxuQDFZXQ",
-      name: "WebSearch",
-      input: {
-        query: "agentclientprotocol.com",
-      },
-    };
-
-    expect(toolInfoFromToolUse(tool_use, {})).toStrictEqual({
-      kind: "fetch",
-      title: '"agentclientprotocol.com"',
-      content: [],
-    });
-  });
-
   it("should handle KillBash entries", () => {
     const tool_use = {
       type: "tool_use",
@@ -547,7 +510,7 @@ describe("tool conversions", () => {
       },
     };
 
-    expect(toolInfoFromToolUse(tool_use, {})).toStrictEqual({
+    expect(toolInfoFromToolUse(tool_use)).toStrictEqual({
       kind: "execute",
       title: `Kill Process`,
       content: [],
@@ -564,7 +527,7 @@ describe("tool conversions", () => {
       },
     };
 
-    expect(toolInfoFromToolUse(tool_use, {})).toStrictEqual({
+    expect(toolInfoFromToolUse(tool_use)).toStrictEqual({
       kind: "execute",
       title: `Tail Logs`,
       content: [],
@@ -644,6 +607,9 @@ describe("tool conversions", () => {
           output_tokens: 1,
           service_tier: "standard",
           server_tool_use: null,
+          inference_geo: null,
+          iterations: null,
+          speed: null,
         },
         context_management: null,
       },
@@ -657,7 +623,6 @@ describe("tool conversions", () => {
         received.message.role,
         "test",
         {},
-        {},
         {} as AgentSideConnection,
         console,
       ),
@@ -779,6 +744,200 @@ describe("tool conversions", () => {
       ],
     });
   });
+
+  it("should transform tool_reference content to valid ACP content", () => {
+    const toolUse = {
+      type: "tool_use",
+      id: "toolu_01MNO345",
+      name: "ToolSearch",
+      input: { query: "test" },
+    };
+
+    const toolResult: BetaToolResultBlockParam = {
+      content: [
+        {
+          type: "tool_reference",
+          tool_name: "some_discovered_tool",
+        },
+      ],
+      tool_use_id: "toolu_01MNO345",
+      is_error: false,
+      type: "tool_result",
+    };
+
+    const update = toolUpdateFromToolResult(toolResult, toolUse);
+
+    expect(update).toEqual({
+      content: [
+        {
+          type: "content",
+          content: { type: "text", text: "Tool: some_discovered_tool" },
+        },
+      ],
+    });
+  });
+
+  it("should transform web_search_result content to valid ACP content", () => {
+    const toolUse = {
+      type: "tool_use",
+      id: "toolu_01MNO345",
+      name: "WebSearch",
+      input: { query: "test" },
+    };
+
+    const toolResult: BetaWebSearchToolResultBlockParam = {
+      content: [
+        {
+          type: "web_search_result",
+          title: "Test Result",
+          url: "https://example.com",
+          encrypted_content: "...",
+          page_age: null,
+        },
+      ],
+      tool_use_id: "toolu_01MNO345",
+      type: "web_search_tool_result",
+    };
+
+    const update = toolUpdateFromToolResult(toolResult, toolUse);
+
+    expect(update).toEqual({
+      content: [
+        {
+          type: "content",
+          content: { type: "text", text: "Test Result (https://example.com)" },
+        },
+      ],
+    });
+  });
+
+  it("should transform web_search_tool_result_error to valid ACP content", () => {
+    const toolUse = {
+      type: "tool_use",
+      id: "toolu_01MNO345",
+      name: "WebSearch",
+      input: { query: "test" },
+    };
+
+    const toolResult: BetaWebSearchToolResultBlockParam = {
+      content: {
+        type: "web_search_tool_result_error",
+        error_code: "unavailable",
+      },
+      tool_use_id: "toolu_01MNO345",
+      type: "web_search_tool_result",
+    };
+
+    const update = toolUpdateFromToolResult(toolResult, toolUse);
+
+    expect(update).toEqual({
+      content: [
+        {
+          type: "content",
+          content: { type: "text", text: "Error: unavailable" },
+        },
+      ],
+    });
+  });
+
+  it("should transform code_execution_result content to valid ACP content", () => {
+    const toolUse = {
+      type: "tool_use",
+      id: "toolu_01MNO345",
+      name: "CodeExecution",
+      input: {},
+    };
+
+    const toolResult: BetaCodeExecutionToolResultBlockParam = {
+      content: {
+        type: "code_execution_result",
+        stdout: "Hello World",
+        stderr: "",
+        return_code: 0,
+        content: [],
+      },
+      tool_use_id: "toolu_01MNO345",
+      type: "code_execution_tool_result",
+    };
+
+    const update = toolUpdateFromToolResult(toolResult, toolUse);
+
+    expect(update).toEqual({
+      content: [
+        {
+          type: "content",
+          content: { type: "text", text: "Output: Hello World" },
+        },
+      ],
+    });
+  });
+
+  it("should transform web_fetch_result content to valid ACP content", () => {
+    const toolUse = {
+      type: "tool_use",
+      id: "toolu_01MNO345",
+      name: "WebFetch",
+      input: { url: "https://example.com" },
+    };
+
+    const toolResult: BetaWebFetchToolResultBlockParam = {
+      content: {
+        type: "web_fetch_result",
+        url: "https://example.com",
+        content: {
+          type: "document",
+          citations: null,
+          title: null,
+          source: { type: "text", media_type: "text/plain", data: "Page content here" },
+        },
+      },
+      tool_use_id: "toolu_01MNO345",
+      type: "web_fetch_tool_result",
+    };
+
+    const update = toolUpdateFromToolResult(toolResult, toolUse);
+
+    expect(update).toEqual({
+      content: [
+        {
+          type: "content",
+          content: { type: "text", text: "Fetched: https://example.com" },
+        },
+      ],
+    });
+  });
+
+  it("should transform tool_search_tool_search_result to valid ACP content", () => {
+    const toolUse = {
+      type: "tool_use",
+      id: "toolu_01MNO345",
+      name: "ToolSearch",
+      input: { query: "test" },
+    };
+
+    const toolResult: BetaToolSearchToolResultBlockParam = {
+      content: {
+        type: "tool_search_tool_search_result",
+        tool_references: [
+          { type: "tool_reference", tool_name: "tool_a" },
+          { type: "tool_reference", tool_name: "tool_b" },
+        ],
+      },
+      tool_use_id: "toolu_01MNO345",
+      type: "tool_search_tool_result",
+    };
+
+    const update = toolUpdateFromToolResult(toolResult, toolUse);
+
+    expect(update).toEqual({
+      content: [
+        {
+          type: "content",
+          content: { type: "text", text: "Tools found: tool_a, tool_b" },
+        },
+      ],
+    });
+  });
 });
 
 describe("escape markdown", () => {
@@ -845,7 +1004,7 @@ describe.skipIf(!process.env.RUN_INTEGRATION_TESTS)("SDK behavior", () => {
       prompt: "hi",
       options: {
         systemPrompt: { type: "preset", preset: "claude_code" },
-        extraArgs: { "session-id": sessionId },
+        sessionId,
         settingSources: ["user", "project", "local"],
         includePartialMessages: true,
       },
@@ -891,7 +1050,7 @@ describe("permission requests", () => {
 
     for (const testCase of testCases) {
       // Get the tool info that would be used in requestPermission
-      const toolInfo = toolInfoFromToolUse(testCase.toolUse, {});
+      const toolInfo = toolInfoFromToolUse(testCase.toolUse);
 
       // Verify toolInfo has a title
       expect(toolInfo.title).toBeDefined();

src/tests/list-sessions.test.ts

@@ -0,0 +1,596 @@
+import { describe, it, expect, beforeEach, afterEach, vi } from "vitest";
+import * as fs from "node:fs";
+import * as path from "node:path";
+import * as os from "node:os";
+import { AgentSideConnection } from "@agentclientprotocol/sdk";
+import type { ClaudeAcpAgent as ClaudeAcpAgentType } from "../acp-agent.js";
+import { encodeProjectPath } from "../utils.js";
+
+describe("unstable_listSessions", () => {
+  let tempDir: string;
+  let originalClaudeConfigDir: string | undefined;
+  let agent: ClaudeAcpAgentType;
+  let ClaudeAcpAgent: typeof ClaudeAcpAgentType;
+
+  // Helper to create a mock AgentSideConnection
+  function createMockClient(): AgentSideConnection {
+    return {
+      sessionUpdate: async () => {},
+      requestPermission: async () => ({ outcome: { outcome: "cancelled" } }),
+      readTextFile: async () => ({ content: "" }),
+      writeTextFile: async () => ({}),
+    } as unknown as AgentSideConnection;
+  }
+
+  // Helper to write a session file
+  function writeSessionFile(
+    cwd: string,
+    sessionId: string,
+    options: {
+      userMessage?: string;
+      userMessageArray?: boolean;
+      mtime?: Date;
+      malformed?: boolean;
+      isAgentFile?: boolean;
+      omitCwdFromEntries?: boolean;
+    } = {},
+  ): void {
+    const encodedPath = encodeProjectPath(cwd);
+    const projectDir = path.join(tempDir, "projects", encodedPath);
+    fs.mkdirSync(projectDir, { recursive: true });
+
+    const filename = options.isAgentFile ? `agent-${sessionId}.jsonl` : `${sessionId}.jsonl`;
+    const filePath = path.join(projectDir, filename);
+
+    if (options.malformed) {
+      fs.writeFileSync(filePath, "not valid json\n{also bad");
+      return;
+    }
+
+    const lines: string[] = [];
+
+    // First line with sessionId
+    lines.push(JSON.stringify({ sessionId, type: "init" }));
+
+    // User message if provided
+    if (options.userMessage) {
+      const content = options.userMessageArray
+        ? [{ type: "text", text: options.userMessage }]
+        : options.userMessage;
+      lines.push(
+        JSON.stringify({
+          type: "user",
+          sessionId,
+          ...(options.omitCwdFromEntries ? {} : { cwd }),
+          message: { content },
+        }),
+      );
+    }
+
+    // Assistant response
+    lines.push(
+      JSON.stringify({
+        type: "assistant",
+        sessionId,
+        ...(options.omitCwdFromEntries ? {} : { cwd }),
+        message: { content: "Hello!" },
+      }),
+    );
+
+    fs.writeFileSync(filePath, lines.join("\n"));
+
+    // Set modification time if specified
+    if (options.mtime) {
+      fs.utimesSync(filePath, options.mtime, options.mtime);
+    }
+  }
+
+  beforeEach(async () => {
+    // Create temp directory to isolate tests from real filesystem.
+    // We set process.env.CLAUDE_CONFIG_DIR before importing the module so that
+    // CLAUDE_CONFIG_DIR is evaluated with our temp directory.
+    tempDir = fs.mkdtempSync(path.join(os.tmpdir(), "claude-test-"));
+    originalClaudeConfigDir = process.env.CLAUDE_CONFIG_DIR;
+    process.env.CLAUDE_CONFIG_DIR = tempDir;
+
+    // Reset modules to pick up the new CLAUDE_CONFIG_DIR env var
+    vi.resetModules();
+
+    // Dynamic import after setting env var
+    const acpAgent = await import("../acp-agent.js");
+    ClaudeAcpAgent = acpAgent.ClaudeAcpAgent;
+
+    // Create agent instance
+    agent = new ClaudeAcpAgent(createMockClient());
+  });
+
+  afterEach(() => {
+    // Restore env and cleanup
+    if (originalClaudeConfigDir !== undefined) {
+      process.env.CLAUDE_CONFIG_DIR = originalClaudeConfigDir;
+    } else {
+      delete process.env.CLAUDE_CONFIG_DIR;
+    }
+    fs.rmSync(tempDir, { recursive: true, force: true });
+  });
+
+  it("returns empty array when projects directory does not exist", async () => {
+    const result = await agent.unstable_listSessions({});
+    expect(result.sessions).toEqual([]);
+    expect(result.nextCursor).toBeUndefined();
+  });
+
+  it("returns empty array when projects directory is empty", async () => {
+    fs.mkdirSync(path.join(tempDir, "projects"), { recursive: true });
+
+    const result = await agent.unstable_listSessions({});
+    expect(result.sessions).toEqual([]);
+  });
+
+  it("parses session files and returns correct metadata", async () => {
+    const cwd = "/Users/test/myproject";
+    const sessionId = "sess-123";
+    const mtime = new Date("2025-01-15T10:30:00Z");
+
+    writeSessionFile(cwd, sessionId, {
+      userMessage: "Hello, can you help me?",
+      mtime,
+    });
+
+    const result = await agent.unstable_listSessions({});
+
+    expect(result.sessions).toHaveLength(1);
+    expect(result.sessions[0]).toMatchObject({
+      sessionId: "sess-123",
+      cwd: "/Users/test/myproject",
+      title: "Hello, can you help me?",
+    });
+    expect(result.sessions[0]!.updatedAt).toBeDefined();
+  });
+
+  it("extracts title from array-style user message content", async () => {
+    writeSessionFile("/Users/test/project", "sess-456", {
+      userMessage: "Fix the bug in auth",
+      userMessageArray: true,
+    });
+
+    const result = await agent.unstable_listSessions({});
+
+    expect(result.sessions[0]!.title).toBe("Fix the bug in auth");
+  });
+
+  it("truncates long titles to 128 characters with ellipsis", async () => {
+    const longMessage = "A".repeat(150);
+    writeSessionFile("/Users/test/project", "sess-789", {
+      userMessage: longMessage,
+    });
+
+    const result = await agent.unstable_listSessions({});
+
+    expect(result.sessions[0]!.title).toBe("A".repeat(127) + "…");
+  });
+
+  it("replaces newlines with spaces in titles", async () => {
+    const messageWithNewlines = "First line\nSecond line\r\nThird line";
+    writeSessionFile("/Users/test/project", "sess-newlines", {
+      userMessage: messageWithNewlines,
+    });
+
+    const result = await agent.unstable_listSessions({});
+
+    expect(result.sessions[0]!.title).toBe("First line Second line Third line");
+  });
+
+  it("collapses multiple whitespace characters in titles", async () => {
+    const messageWithWhitespace = "Hello    world  \n\n  test";
+    writeSessionFile("/Users/test/project", "sess-whitespace", {
+      userMessage: messageWithWhitespace,
+    });
+
+    const result = await agent.unstable_listSessions({});
+
+    expect(result.sessions[0]!.title).toBe("Hello world test");
+  });
+
+  it("filters sessions by cwd parameter", async () => {
+    writeSessionFile("/Users/test/projectone", "sess-a", { userMessage: "Project A" });
+    writeSessionFile("/Users/test/projecttwo", "sess-b", { userMessage: "Project B" });
+
+    const result = await agent.unstable_listSessions({ cwd: "/Users/test/projectone" });
+
+    expect(result.sessions).toHaveLength(1);
+    expect(result.sessions[0]!.sessionId).toBe("sess-a");
+  });
+
+  it("uses per-entry cwd when filtering even if encoded folder collides", async () => {
+    const encodedPath = encodeProjectPath("/Users/test/a-b");
+    const projectDir = path.join(tempDir, "projects", encodedPath);
+    fs.mkdirSync(projectDir, { recursive: true });
+
+    fs.writeFileSync(
+      path.join(projectDir, "sess-a-b.jsonl"),
+      [
+        JSON.stringify({ sessionId: "sess-a-b", type: "init" }),
+        JSON.stringify({
+          type: "user",
+          sessionId: "sess-a-b",
+          cwd: "/Users/test/a-b",
+          message: { content: "A-B" },
+        }),
+      ].join("\n"),
+    );
+
+    fs.writeFileSync(
+      path.join(projectDir, "sess-a-slash-b.jsonl"),
+      [
+        JSON.stringify({ sessionId: "sess-a-slash-b", type: "init" }),
+        JSON.stringify({
+          type: "user",
+          sessionId: "sess-a-slash-b",
+          cwd: "/Users/test/a/b",
+          message: { content: "A/B" },
+        }),
+      ].join("\n"),
+    );
+
+    const result = await agent.unstable_listSessions({ cwd: "/Users/test/a-b" });
+
+    expect(result.sessions).toHaveLength(1);
+    expect(result.sessions[0]!.sessionId).toBe("sess-a-b");
+    expect(result.sessions[0]!.cwd).toBe("/Users/test/a-b");
+  });
+
+  it("returns the true cwd for paths containing hyphens", async () => {
+    const cwd = "/Users/test/claude-code-acp";
+    writeSessionFile(cwd, "hyphen-session", { userMessage: "Hyphen test" });
+
+    const result = await agent.unstable_listSessions({});
+
+    expect(result.sessions).toHaveLength(1);
+    expect(result.sessions[0]!.cwd).toBe(cwd);
+    expect(result.sessions[0]!.sessionId).toBe("hyphen-session");
+  });
+
+  it("filters hyphenated paths by cwd correctly", async () => {
+    writeSessionFile("/Users/test/claude-code-acp", "hyphen-a", { userMessage: "A" });
+    writeSessionFile("/Users/test/other-project", "hyphen-b", { userMessage: "B" });
+
+    const result = await agent.unstable_listSessions({ cwd: "/Users/test/claude-code-acp" });
+
+    expect(result.sessions).toHaveLength(1);
+    expect(result.sessions[0]!.sessionId).toBe("hyphen-a");
+    expect(result.sessions[0]!.cwd).toBe("/Users/test/claude-code-acp");
+  });
+
+  it("returns all sessions when cwd is not specified", async () => {
+    writeSessionFile("/Users/test/projectone", "sess-a", { userMessage: "A" });
+    writeSessionFile("/Users/test/projecttwo", "sess-b", { userMessage: "B" });
+
+    const result = await agent.unstable_listSessions({});
+
+    expect(result.sessions).toHaveLength(2);
+  });
+
+  it("sorts sessions by updatedAt descending (most recent first)", async () => {
+    writeSessionFile("/Users/test/project", "old-session", {
+      userMessage: "Old",
+      mtime: new Date("2025-01-01T00:00:00Z"),
+    });
+    writeSessionFile("/Users/test/project", "new-session", {
+      userMessage: "New",
+      mtime: new Date("2025-01-15T00:00:00Z"),
+    });
+
+    const result = await agent.unstable_listSessions({});
+
+    expect(result.sessions[0]!.sessionId).toBe("new-session");
+    expect(result.sessions[1]!.sessionId).toBe("old-session");
+  });
+
+  it("skips files starting with agent-", async () => {
+    writeSessionFile("/Users/test/project", "regular-session", { userMessage: "Regular" });
+    writeSessionFile("/Users/test/project", "hidden-session", {
+      userMessage: "Hidden",
+      isAgentFile: true,
+    });
+
+    const result = await agent.unstable_listSessions({});
+
+    expect(result.sessions).toHaveLength(1);
+    expect(result.sessions[0]!.sessionId).toBe("regular-session");
+  });
+
+  it("skips malformed session files gracefully", async () => {
+    writeSessionFile("/Users/test/project", "good-session", { userMessage: "Good" });
+    writeSessionFile("/Users/test/project", "bad-session", { malformed: true });
+
+    const result = await agent.unstable_listSessions({});
+
+    expect(result.sessions).toHaveLength(1);
+    expect(result.sessions[0]!.sessionId).toBe("good-session");
+  });
+
+  it("uses filename as sessionId when not in file content", async () => {
+    const cwd = "/Users/test/project";
+    const encodedPath = encodeProjectPath(cwd);
+    const projectDir = path.join(tempDir, "projects", encodedPath);
+    fs.mkdirSync(projectDir, { recursive: true });
+
+    // Write file without sessionId in content (uses filename fallback), but with cwd.
+    const filePath = path.join(projectDir, "fallback-id.jsonl");
+    fs.writeFileSync(
+      filePath,
+      [
+        JSON.stringify({ type: "init" }),
+        JSON.stringify({ type: "assistant", cwd, message: { content: "Hi" } }),
+      ].join("\n"),
+    );
+
+    const result = await agent.unstable_listSessions({});
+
+    expect(result.sessions[0]!.sessionId).toBe("fallback-id");
+  });
+
+  it("keeps sessionId stable from filename when later entries have different sessionId", async () => {
+    const cwd = "/Users/test/project";
+    const encodedPath = encodeProjectPath(cwd);
+    const projectDir = path.join(tempDir, "projects", encodedPath);
+    fs.mkdirSync(projectDir, { recursive: true });
+
+    const filePath = path.join(projectDir, "stable-id.jsonl");
+    fs.writeFileSync(
+      filePath,
+      [
+        JSON.stringify({ type: "init", sessionId: "stable-id" }),
+        JSON.stringify({
+          type: "user",
+          sessionId: "stable-id",
+          cwd,
+          message: { content: "Hello" },
+        }),
+        JSON.stringify({
+          type: "assistant",
+          sessionId: "other-id",
+          cwd,
+          message: { content: "Wrong session id from sidechain" },
+        }),
+      ].join("\n"),
+    );
+
+    const result = await agent.unstable_listSessions({});
+
+    expect(result.sessions).toHaveLength(1);
+    expect(result.sessions[0]!.sessionId).toBe("stable-id");
+  });
+
+  it("derives cwd from entries for the filename sessionId only", async () => {
+    const cwd = "/Users/test/project";
+    const encodedPath = encodeProjectPath(cwd);
+    const projectDir = path.join(tempDir, "projects", encodedPath);
+    fs.mkdirSync(projectDir, { recursive: true });
+
+    const filePath = path.join(projectDir, "target-session.jsonl");
+    fs.writeFileSync(
+      filePath,
+      [
+        JSON.stringify({
+          type: "user",
+          sessionId: "target-session",
+          cwd,
+          message: { content: "Correct cwd entry" },
+        }),
+      ].join("\n"),
+    );
+
+    const result = await agent.unstable_listSessions({});
+
+    expect(result.sessions).toHaveLength(1);
+    expect(result.sessions[0]!.sessionId).toBe("target-session");
+    expect(result.sessions[0]!.cwd).toBe(cwd);
+  });
+
+  it("keeps scanning after title to find later cwd in same session", async () => {
+    const cwd = "/Users/test/project";
+    const encodedPath = encodeProjectPath(cwd);
+    const projectDir = path.join(tempDir, "projects", encodedPath);
+    fs.mkdirSync(projectDir, { recursive: true });
+
+    const filePath = path.join(projectDir, "late-cwd.jsonl");
+    fs.writeFileSync(
+      filePath,
+      [
+        JSON.stringify({ type: "init", sessionId: "late-cwd" }),
+        JSON.stringify({
+          type: "user",
+          sessionId: "late-cwd",
+          message: { content: "Title from first user message" },
+        }),
+        JSON.stringify({
+          type: "assistant",
+          sessionId: "late-cwd",
+          cwd,
+          message: { content: "Assistant entry carries cwd" },
+        }),
+      ].join("\n"),
+    );
+
+    const result = await agent.unstable_listSessions({});
+
+    expect(result.sessions).toHaveLength(1);
+    expect(result.sessions[0]!.sessionId).toBe("late-cwd");
+    expect(result.sessions[0]!.cwd).toBe(cwd);
+    expect(result.sessions[0]!.title).toBe("Title from first user message");
+  });
+
+  it("ignores sidechain entries when deriving cwd and title", async () => {
+    const cwd = "/Users/test/project";
+    const encodedPath = encodeProjectPath(cwd);
+    const projectDir = path.join(tempDir, "projects", encodedPath);
+    fs.mkdirSync(projectDir, { recursive: true });
+
+    const filePath = path.join(projectDir, "sidechain-metadata.jsonl");
+    fs.writeFileSync(
+      filePath,
+      [
+        JSON.stringify({ type: "init", sessionId: "sidechain-metadata" }),
+        JSON.stringify({
+          type: "user",
+          sessionId: "sidechain-metadata",
+          isSidechain: true,
+          cwd: "/Users/test/wrong-project",
+          message: { content: "Wrong sidechain title" },
+        }),
+        JSON.stringify({
+          type: "user",
+          sessionId: "sidechain-metadata",
+          cwd,
+          message: { content: "Correct primary title" },
+        }),
+      ].join("\n"),
+    );
+
+    const result = await agent.unstable_listSessions({ cwd });
+
+    expect(result.sessions).toHaveLength(1);
+    expect(result.sessions[0]!.sessionId).toBe("sidechain-metadata");
+    expect(result.sessions[0]!.cwd).toBe(cwd);
+    expect(result.sessions[0]!.title).toBe("Correct primary title");
+  });
+
+  it("skips entries without cwd when cwd filter is not provided", async () => {
+    const cwd = "/Users/test/project";
+    const encodedPath = encodeProjectPath(cwd);
+    const projectDir = path.join(tempDir, "projects", encodedPath);
+    fs.mkdirSync(projectDir, { recursive: true });
+
+    const filePath = path.join(projectDir, "no-cwd.jsonl");
+    fs.writeFileSync(filePath, JSON.stringify({ sessionId: "no-cwd", type: "summary" }) + "\n");
+
+    const result = await agent.unstable_listSessions({});
+
+    expect(result.sessions).toHaveLength(0);
+  });
+
+  it("returns null title when no user message exists", async () => {
+    const cwd = "/Users/test/project";
+    const encodedPath = encodeProjectPath(cwd);
+    const projectDir = path.join(tempDir, "projects", encodedPath);
+    fs.mkdirSync(projectDir, { recursive: true });
+
+    // Write file with only init and assistant message
+    const filePath = path.join(projectDir, "no-user.jsonl");
+    fs.writeFileSync(
+      filePath,
+      [
+        JSON.stringify({ sessionId: "no-user", type: "init" }),
+        JSON.stringify({ type: "assistant", cwd, message: { content: "Hi" } }),
+      ].join("\n"),
+    );
+
+    const result = await agent.unstable_listSessions({});
+
+    expect(result.sessions[0]!.title).toBeNull();
+  });
+
+  describe("pagination", () => {
+    it("returns nextCursor when there are more results", async () => {
+      // Create 60 sessions (more than PAGE_SIZE of 50)
+      for (let i = 0; i < 60; i++) {
+        writeSessionFile("/Users/test/project", `sess-${i.toString().padStart(3, "0")}`, {
+          userMessage: `Session ${i}`,
+          mtime: new Date(Date.now() - i * 1000), // Each older by 1 second
+        });
+      }
+
+      const result = await agent.unstable_listSessions({});
+
+      expect(result.sessions).toHaveLength(50);
+      expect(result.nextCursor).toBeDefined();
+    });
+
+    it("does not return nextCursor when all results fit in one page", async () => {
+      for (let i = 0; i < 10; i++) {
+        writeSessionFile("/Users/test/project", `sess-${i}`, { userMessage: `Session ${i}` });
+      }
+
+      const result = await agent.unstable_listSessions({});
+
+      expect(result.sessions).toHaveLength(10);
+      expect(result.nextCursor).toBeUndefined();
+    });
+
+    it("returns next page when cursor is provided", async () => {
+      // Create 60 sessions
+      for (let i = 0; i < 60; i++) {
+        writeSessionFile("/Users/test/project", `sess-${i.toString().padStart(3, "0")}`, {
+          userMessage: `Session ${i}`,
+          mtime: new Date(Date.now() - i * 1000),
+        });
+      }
+
+      // Get first page
+      const firstPage = await agent.unstable_listSessions({});
+      expect(firstPage.sessions).toHaveLength(50);
+      expect(firstPage.nextCursor).toBeDefined();
+
+      // Get second page
+      const secondPage = await agent.unstable_listSessions({ cursor: firstPage.nextCursor });
+      expect(secondPage.sessions).toHaveLength(10);
+      expect(secondPage.nextCursor).toBeUndefined();
+    });
+
+    it("handles invalid cursor gracefully (starts from beginning)", async () => {
+      writeSessionFile("/Users/test/project", "sess-1", { userMessage: "Test" });
+
+      const result = await agent.unstable_listSessions({ cursor: "invalid-base64!" });
+
+      expect(result.sessions).toHaveLength(1);
+    });
+
+    it("handles malformed cursor JSON gracefully", async () => {
+      writeSessionFile("/Users/test/project", "sess-1", { userMessage: "Test" });
+
+      // Valid base64 but not valid JSON
+      const badCursor = Buffer.from("not json").toString("base64");
+      const result = await agent.unstable_listSessions({ cursor: badCursor });
+
+      expect(result.sessions).toHaveLength(1);
+    });
+  });
+
+  describe("Windows path support", () => {
+    it("decodes Windows-style paths correctly", async () => {
+      // Simulate a Windows path encoded as "C-Users-test-project"
+      const windowsCwd = "C:\\Users\\test\\project";
+      writeSessionFile(windowsCwd, "win-session", { userMessage: "Windows test" });
+
+      const result = await agent.unstable_listSessions({});
+
+      expect(result.sessions).toHaveLength(1);
+      expect(result.sessions[0]!.cwd).toBe("C:\\Users\\test\\project");
+      expect(result.sessions[0]!.sessionId).toBe("win-session");
+    });
+
+    it("filters Windows paths by cwd correctly", async () => {
+      writeSessionFile("C:\\Users\\test\\projectone", "win-a", { userMessage: "A" });
+      writeSessionFile("C:\\Users\\test\\projecttwo", "win-b", { userMessage: "B" });
+
+      const result = await agent.unstable_listSessions({ cwd: "C:\\Users\\test\\projectone" });
+
+      expect(result.sessions).toHaveLength(1);
+      expect(result.sessions[0]!.sessionId).toBe("win-a");
+    });
+
+    it("handles mixed Unix and Windows paths", async () => {
+      writeSessionFile("/Users/test/unixproject", "unix-session", { userMessage: "Unix" });
+      writeSessionFile("C:\\Users\\test\\winproject", "win-session", { userMessage: "Windows" });
+
+      const result = await agent.unstable_listSessions({});
+
+      expect(result.sessions).toHaveLength(2);
+      const cwds = result.sessions.map((s) => s.cwd);
+      expect(cwds).toContain("/Users/test/unixproject");
+      expect(cwds).toContain("C:\\Users\\test\\winproject");
+    });
+  });
+});

src/tests/load-session.test.ts

@@ -0,0 +1,320 @@
+import { describe, it, expect, beforeEach, afterEach, vi } from "vitest";
+import * as fs from "node:fs";
+import * as path from "node:path";
+import * as os from "node:os";
+import { AgentSideConnection, SessionNotification } from "@agentclientprotocol/sdk";
+import type { ClaudeAcpAgent as ClaudeAcpAgentType } from "../acp-agent.js";
+import { encodeProjectPath } from "../utils.js";
+
+const { registerHookCallbackSpy } = vi.hoisted(() => ({
+  registerHookCallbackSpy: vi.fn(),
+}));
+
+vi.mock("../tools.js", async () => {
+  const actual = await vi.importActual<typeof import("../tools.js")>("../tools.js");
+  return {
+    ...actual,
+    registerHookCallback: registerHookCallbackSpy,
+  };
+});
+
+describe("loadSession", () => {
+  let tempDir: string;
+  let originalClaudeConfigDir: string | undefined;
+  let agent: ClaudeAcpAgentType;
+  let ClaudeAcpAgent: typeof ClaudeAcpAgentType;
+  let sessionUpdates: SessionNotification[];
+  let createSessionSpy: ReturnType<typeof vi.fn>;
+
+  // Helper to create a mock AgentSideConnection
+  function createMockClient(): AgentSideConnection {
+    return {
+      sessionUpdate: async (notification: SessionNotification) => {
+        sessionUpdates.push(notification);
+      },
+      requestPermission: async () => ({ outcome: { outcome: "cancelled" } }),
+      readTextFile: async () => ({ content: "" }),
+      writeTextFile: async () => ({}),
+    } as unknown as AgentSideConnection;
+  }
+
+  function writeSessionFile(
+    cwd: string,
+    sessionId: string,
+    entries: Array<Record<string, unknown> | string>,
+  ): void {
+    const encodedPath = encodeProjectPath(cwd);
+    const projectDir = path.join(tempDir, "projects", encodedPath);
+    fs.mkdirSync(projectDir, { recursive: true });
+
+    const filePath = path.join(projectDir, `${sessionId}.jsonl`);
+    const lines = entries.map((entry) =>
+      typeof entry === "string" ? entry : JSON.stringify(entry),
+    );
+    fs.writeFileSync(filePath, lines.join("\n"));
+  }
+
+  beforeEach(async () => {
+    tempDir = fs.mkdtempSync(path.join(os.tmpdir(), "claude-load-session-"));
+    originalClaudeConfigDir = process.env.CLAUDE_CONFIG_DIR;
+    process.env.CLAUDE_CONFIG_DIR = tempDir;
+    sessionUpdates = [];
+    registerHookCallbackSpy.mockClear();
+
+    vi.resetModules();
+
+    const acpAgent = await import("../acp-agent.js");
+    ClaudeAcpAgent = acpAgent.ClaudeAcpAgent;
+
+    agent = new ClaudeAcpAgent(createMockClient());
+    createSessionSpy = vi.fn(async () => ({ modes: null, models: null }));
+    (agent as unknown as { createSession: typeof createSessionSpy }).createSession =
+      createSessionSpy;
+  });
+
+  afterEach(() => {
+    if (originalClaudeConfigDir !== undefined) {
+      process.env.CLAUDE_CONFIG_DIR = originalClaudeConfigDir;
+    } else {
+      delete process.env.CLAUDE_CONFIG_DIR;
+    }
+    fs.rmSync(tempDir, { recursive: true, force: true });
+  });
+
+  it("throws when the session file does not exist", async () => {
+    await expect(
+      agent.loadSession({
+        cwd: "/Users/test/project",
+        sessionId: "missing-session",
+        mcpServers: [],
+      }),
+    ).rejects.toThrow("Session not found");
+
+    expect(createSessionSpy).not.toHaveBeenCalled();
+  });
+
+  it("replays history and returns modes/models from createSession", async () => {
+    const cwd = "/Users/test/project";
+    const sessionId = "session-123";
+
+    writeSessionFile(cwd, sessionId, [
+      { type: "summary", summary: "ignored" },
+      {
+        type: "user",
+        sessionId,
+        message: { role: "user", content: "Hello" },
+      },
+      {
+        type: "assistant",
+        sessionId,
+        message: {
+          role: "assistant",
+          content: [{ type: "thinking", thinking: "Thinking" }],
+        },
+      },
+      {
+        type: "assistant",
+        sessionId,
+        message: {
+          role: "assistant",
+          content: [{ type: "text", text: "Hi" }],
+        },
+      },
+      {
+        type: "assistant",
+        sessionId,
+        message: {
+          role: "assistant",
+          content: [
+            {
+              type: "tool_use",
+              id: "tool-1",
+              name: "Read",
+              input: { file_path: "/tmp/example.txt" },
+            },
+          ],
+        },
+      },
+      {
+        type: "user",
+        sessionId,
+        message: {
+          role: "user",
+          content: [{ type: "tool_result", tool_use_id: "tool-1", content: "ok" }],
+        },
+      },
+    ]);
+
+    const result = await agent.loadSession({ cwd, sessionId, mcpServers: [] });
+
+    expect(result).toEqual({ modes: null, models: null });
+    expect(createSessionSpy).toHaveBeenCalledWith(
+      expect.objectContaining({ cwd, mcpServers: [] }),
+      { resume: sessionId },
+    );
+    expect(registerHookCallbackSpy).not.toHaveBeenCalled();
+
+    expect(sessionUpdates.map((notification) => notification.update.sessionUpdate)).toEqual([
+      "user_message_chunk",
+      "agent_thought_chunk",
+      "agent_message_chunk",
+      "tool_call",
+      "tool_call_update",
+    ]);
+
+    expect(sessionUpdates[0]?.update).toMatchObject({
+      sessionUpdate: "user_message_chunk",
+      content: { type: "text", text: "Hello" },
+    });
+    expect(sessionUpdates[1]?.update).toMatchObject({
+      sessionUpdate: "agent_thought_chunk",
+      content: { type: "text", text: "Thinking" },
+    });
+    expect(sessionUpdates[2]?.update).toMatchObject({
+      sessionUpdate: "agent_message_chunk",
+      content: { type: "text", text: "Hi" },
+    });
+    expect(sessionUpdates[3]?.update).toMatchObject({
+      sessionUpdate: "tool_call",
+      toolCallId: "tool-1",
+      status: "pending",
+    });
+    expect(sessionUpdates[4]?.update).toMatchObject({
+      sessionUpdate: "tool_call_update",
+      toolCallId: "tool-1",
+      status: "completed",
+    });
+  });
+
+  it("skips sidechain, mismatched sessionId, invalid, and unsupported entries", async () => {
+    const cwd = "/Users/test/project";
+    const sessionId = "session-456";
+
+    writeSessionFile(cwd, sessionId, [
+      "{not valid json}",
+      { type: "summary", summary: "ignore" },
+      {
+        type: "user",
+        sessionId,
+        isSidechain: true,
+        message: { role: "user", content: "Sidechain" },
+      },
+      {
+        type: "assistant",
+        sessionId: "other-session",
+        message: { role: "assistant", content: "Wrong session" },
+      },
+      {
+        type: "assistant",
+        sessionId,
+        message: { role: "system", content: "Unsupported role" },
+      },
+      {
+        type: "user",
+        sessionId,
+        message: { role: "user", content: 123 },
+      },
+      {
+        type: "user",
+        sessionId,
+        message: { role: "user", content: "Keep me" },
+      },
+    ]);
+
+    await agent.loadSession({ cwd, sessionId, mcpServers: [] });
+
+    expect(sessionUpdates).toHaveLength(1);
+    expect(sessionUpdates[0]?.update).toMatchObject({
+      sessionUpdate: "user_message_chunk",
+      content: { type: "text", text: "Keep me" },
+    });
+  });
+
+  it("finds session file when cwd differs from the original session cwd", async () => {
+    const originalCwd = "/Users/test/original-project";
+    const differentCwd = "/Users/test/different-project";
+    const sessionId = "cross-cwd-session";
+
+    // Session was created in originalCwd
+    writeSessionFile(originalCwd, sessionId, [
+      {
+        type: "user",
+        sessionId,
+        cwd: originalCwd,
+        message: { role: "user", content: "Hello from original" },
+      },
+    ]);
+
+    // Load with a different cwd
+    await agent.loadSession({ cwd: differentCwd, sessionId, mcpServers: [] });
+
+    expect(sessionUpdates).toHaveLength(1);
+    expect(sessionUpdates[0]?.update).toMatchObject({
+      sessionUpdate: "user_message_chunk",
+      content: { type: "text", text: "Hello from original" },
+    });
+    expect(createSessionSpy).toHaveBeenCalledWith(expect.objectContaining({ cwd: differentCwd }), {
+      resume: sessionId,
+    });
+  });
+
+  it("sends available_commands_update after history replay, not during", async () => {
+    const cwd = "/Users/test/project";
+    const sessionId = "session-commands";
+
+    // Mock createSession to populate the sessions map with a mock query
+    createSessionSpy.mockImplementationOnce(async () => {
+      (agent as unknown as { sessions: Record<string, unknown> }).sessions[sessionId] = {
+        query: {
+          supportedCommands: async () => [{ name: "help", description: "Get help" }],
+        },
+      };
+      return { modes: null, models: null };
+    });
+
+    writeSessionFile(cwd, sessionId, [
+      {
+        type: "user",
+        sessionId,
+        message: { role: "user", content: "Hello" },
+      },
+      {
+        type: "assistant",
+        sessionId,
+        message: { role: "assistant", content: [{ type: "text", text: "Hi" }] },
+      },
+    ]);
+
+    await agent.loadSession({ cwd, sessionId, mcpServers: [] });
+
+    // Flush the setTimeout + async work inside sendAvailableCommandsUpdate
+    await new Promise((resolve) => setTimeout(resolve, 10));
+
+    const updateTypes = sessionUpdates.map((n) => n.update.sessionUpdate);
+
+    // available_commands_update should come AFTER all replay notifications
+    expect(updateTypes).toEqual([
+      "user_message_chunk",
+      "agent_message_chunk",
+      "available_commands_update",
+    ]);
+  });
+
+  it("handles Windows-style paths", async () => {
+    const cwd = "C:\\Users\\test\\project";
+    const sessionId = "win-session";
+
+    writeSessionFile(cwd, sessionId, [
+      {
+        type: "user",
+        sessionId,
+        message: { role: "user", content: "Hello" },
+      },
+    ]);
+
+    await agent.loadSession({ cwd, sessionId, mcpServers: [] });
+
+    expect(sessionUpdates).toHaveLength(1);
+    expect(sessionUpdates[0]?.sessionId).toBe(sessionId);
+  });
+});

src/tests/settings.test.ts

@@ -0,0 +1,767 @@
+import { describe, it, expect, beforeEach, afterEach } from "vitest";
+import { SettingsManager } from "../settings.js";
+import * as fs from "node:fs";
+import * as path from "node:path";
+import * as os from "node:os";
+
+describe("SettingsManager", () => {
+  let tempDir: string;
+  let settingsManager: SettingsManager;
+
+  beforeEach(async () => {
+    tempDir = await fs.promises.mkdtemp(path.join(os.tmpdir(), "settings-test-"));
+  });
+
+  afterEach(async () => {
+    settingsManager?.dispose();
+    await fs.promises.rm(tempDir, { recursive: true, force: true });
+  });
+
+  describe("permission checking", () => {
+    it("should return 'ask' when no settings exist", async () => {
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      const result = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: "/some/file.txt",
+      });
+      expect(result.decision).toBe("ask");
+    });
+
+    it("should return 'ask' for non-ACP tools (permission checks only apply to mcp__acp__* tools)", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            deny: ["Read"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      // Non-ACP tools should always return 'ask' regardless of rules
+      const result = settingsManager.checkPermission("Read", { file_path: "/some/file.txt" });
+      expect(result.decision).toBe("ask");
+    });
+
+    it("should allow tool use when matching allow rule exists", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            allow: ["Read"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      const result = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: "/some/file.txt",
+      });
+      expect(result.decision).toBe("allow");
+      expect(result.rule).toBe("Read");
+    });
+
+    it("should deny tool use when matching deny rule exists", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            deny: ["Read(./.env)"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      const result = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: path.join(tempDir, ".env"),
+      });
+      expect(result.decision).toBe("deny");
+      expect(result.rule).toBe("Read(./.env)");
+    });
+
+    it("should prioritize deny rules over allow rules", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            allow: ["Read"],
+            deny: ["Read(./.env)"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      // .env should be denied
+      const envResult = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: path.join(tempDir, ".env"),
+      });
+      expect(envResult.decision).toBe("deny");
+
+      // other files should be allowed
+      const otherResult = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: path.join(tempDir, "other.txt"),
+      });
+      expect(otherResult.decision).toBe("allow");
+    });
+
+    it("should handle ACP-prefixed tool names", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            allow: ["Read"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      const result = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: "/some/file.txt",
+      });
+      expect(result.decision).toBe("allow");
+    });
+  });
+
+  describe("Bash permission rules", () => {
+    it("should match exact Bash commands without :* wildcard", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            // Per docs: Bash(npm run build) matches the EXACT command "npm run build"
+            allow: ["Bash(npm run lint)"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      // Exact match should be allowed
+      const exactResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "npm run lint",
+      });
+      expect(exactResult.decision).toBe("allow");
+
+      // Command with extra arguments should NOT match (exact match only)
+      const withArgsResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "npm run lint --fix",
+      });
+      expect(withArgsResult.decision).toBe("ask");
+
+      // Similar command should NOT match (exact match only)
+      const similarResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "npm run linting",
+      });
+      expect(similarResult.decision).toBe("ask");
+
+      // Different command should not match
+      const differentResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "npm run test",
+      });
+      expect(differentResult.decision).toBe("ask");
+    });
+
+    it("should match Bash commands with :* wildcard suffix (prefix matching)", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            // The :* suffix is a convention to make prefix matching explicit
+            allow: ["Bash(npm run:*)"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      // Any command starting with "npm run" should match (prefix matching with :*)
+      const lintResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "npm run lint",
+      });
+      expect(lintResult.decision).toBe("allow");
+
+      const testResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "npm run test",
+      });
+      expect(testResult.decision).toBe("allow");
+
+      // Commands with additional args also match
+      const withArgsResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "npm run test --watch",
+      });
+      expect(withArgsResult.decision).toBe("allow");
+
+      // Non-matching command
+      const installResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "npm install",
+      });
+      expect(installResult.decision).toBe("ask");
+    });
+
+    it("should not allow shell operators to bypass prefix matching", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            allow: ["Bash(safe-cmd:*)"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      // Normal prefix match should work
+      const normalResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "safe-cmd --flag",
+      });
+      expect(normalResult.decision).toBe("allow");
+
+      // Shell operators should NOT be allowed (per docs: Claude Code is aware of shell operators)
+      const andResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "safe-cmd && malicious-cmd",
+      });
+      expect(andResult.decision).toBe("ask");
+
+      const orResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "safe-cmd || malicious-cmd",
+      });
+      expect(orResult.decision).toBe("ask");
+
+      const semicolonResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "safe-cmd; malicious-cmd",
+      });
+      expect(semicolonResult.decision).toBe("ask");
+
+      const pipeResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "safe-cmd | malicious-cmd",
+      });
+      expect(pipeResult.decision).toBe("ask");
+
+      const subshellResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "safe-cmd $(malicious-cmd)",
+      });
+      expect(subshellResult.decision).toBe("ask");
+
+      const backtickResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "safe-cmd `malicious-cmd`",
+      });
+      expect(backtickResult.decision).toBe("ask");
+
+      const newlineResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "safe-cmd\nmalicious-cmd",
+      });
+      expect(newlineResult.decision).toBe("ask");
+    });
+
+    it("should deny dangerous Bash commands", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            deny: ["Bash(curl:*)", "Bash(wget:*)"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      const curlResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "curl https://example.com",
+      });
+      expect(curlResult.decision).toBe("deny");
+
+      const wgetResult = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "wget https://example.com",
+      });
+      expect(wgetResult.decision).toBe("deny");
+
+      const lsResult = settingsManager.checkPermission("mcp__acp__Bash", { command: "ls -la" });
+      expect(lsResult.decision).toBe("ask");
+    });
+  });
+
+  describe("file path glob matching", () => {
+    it("should match exact file paths", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            deny: ["Read(./.env)"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      const envResult = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: path.join(tempDir, ".env"),
+      });
+      expect(envResult.decision).toBe("deny");
+
+      const otherResult = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: path.join(tempDir, ".envrc"),
+      });
+      expect(otherResult.decision).toBe("ask");
+    });
+
+    it("should match glob patterns with single wildcard", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            deny: ["Read(./.env.*)"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      const envLocalResult = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: path.join(tempDir, ".env.local"),
+      });
+      expect(envLocalResult.decision).toBe("deny");
+
+      const envProdResult = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: path.join(tempDir, ".env.production"),
+      });
+      expect(envProdResult.decision).toBe("deny");
+
+      // Plain .env should not match .env.*
+      const plainEnvResult = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: path.join(tempDir, ".env"),
+      });
+      expect(plainEnvResult.decision).toBe("ask");
+    });
+
+    it("should match glob patterns with double wildcard (recursive)", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            deny: ["Read(./secrets/**)"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      const secretResult = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: path.join(tempDir, "secrets", "api-key.txt"),
+      });
+      expect(secretResult.decision).toBe("deny");
+
+      const nestedSecretResult = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: path.join(tempDir, "secrets", "deep", "nested", "key.txt"),
+      });
+      expect(nestedSecretResult.decision).toBe("deny");
+
+      const otherResult = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: path.join(tempDir, "public", "file.txt"),
+      });
+      expect(otherResult.decision).toBe("ask");
+    });
+
+    it("should handle home directory expansion", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            allow: ["Read(~/.zshrc)"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      const zshrcResult = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: path.join(os.homedir(), ".zshrc"),
+      });
+      expect(zshrcResult.decision).toBe("allow");
+    });
+  });
+
+  describe("settings merging", () => {
+    it("should merge project and local settings", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+
+      // Project settings
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            allow: ["Read"],
+          },
+        }),
+      );
+
+      // Local settings
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.local.json"),
+        JSON.stringify({
+          permissions: {
+            deny: ["Read(./.env)"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      // Read should be allowed in general
+      const readResult = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: path.join(tempDir, "file.txt"),
+      });
+      expect(readResult.decision).toBe("allow");
+
+      // But .env should be denied (local settings take precedence)
+      const envResult = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: path.join(tempDir, ".env"),
+      });
+      expect(envResult.decision).toBe("deny");
+    });
+
+    it("should merge model setting with later sources taking precedence", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+
+      // Project settings with one model
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          model: "claude-3-5-sonnet",
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      let settings = settingsManager.getSettings();
+      expect(settings.model).toBe("claude-3-5-sonnet");
+
+      // Add local settings that override the model
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.local.json"),
+        JSON.stringify({
+          model: "claude-3-5-haiku",
+        }),
+      );
+
+      // Re-initialize to pick up local settings
+      settingsManager.dispose();
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      settings = settingsManager.getSettings();
+      expect(settings.model).toBe("claude-3-5-haiku");
+    });
+  });
+
+  describe("ask rules", () => {
+    it("should return 'ask' for matching ask rules", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            ask: ["Bash(git push:*)"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      const result = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "git push origin main",
+      });
+      expect(result.decision).toBe("ask");
+      expect(result.rule).toBe("Bash(git push:*)");
+    });
+  });
+
+  describe("Edit and Write tools", () => {
+    it("should handle Edit tool permissions", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            deny: ["Edit(./package-lock.json)"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      const lockFileResult = settingsManager.checkPermission("mcp__acp__Edit", {
+        file_path: path.join(tempDir, "package-lock.json"),
+      });
+      expect(lockFileResult.decision).toBe("deny");
+
+      const otherResult = settingsManager.checkPermission("mcp__acp__Edit", {
+        file_path: path.join(tempDir, "package.json"),
+      });
+      expect(otherResult.decision).toBe("ask");
+    });
+
+    it("should handle mcp__acp__Edit and mcp__acp__Write tool names", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            allow: ["Edit", "Write"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      const editResult = settingsManager.checkPermission("mcp__acp__Edit", {
+        file_path: "/some/file.ts",
+      });
+      expect(editResult.decision).toBe("allow");
+
+      const writeResult = settingsManager.checkPermission("mcp__acp__Write", {
+        file_path: "/some/file.ts",
+      });
+      expect(writeResult.decision).toBe("allow");
+    });
+  });
+
+  describe("getSettings", () => {
+    it("should return merged settings", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            allow: ["Read", "Bash(npm:*)"],
+            deny: ["Read(./.env)"],
+          },
+          env: {
+            FOO: "bar",
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      const settings = settingsManager.getSettings();
+      expect(settings.permissions?.allow).toContain("Read");
+      expect(settings.permissions?.allow).toContain("Bash(npm:*)");
+      expect(settings.permissions?.deny).toContain("Read(./.env)");
+      expect(settings.env?.FOO).toBe("bar");
+    });
+  });
+
+  describe("setCwd", () => {
+    it("should reload settings when cwd changes", async () => {
+      const claudeDir1 = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir1, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir1, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            allow: ["Read"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      let result = settingsManager.checkPermission("mcp__acp__Read", { file_path: "/file.txt" });
+      expect(result.decision).toBe("allow");
+
+      // Create a new temp directory with different settings
+      const tempDir2 = await fs.promises.mkdtemp(path.join(os.tmpdir(), "settings-test-2-"));
+      const claudeDir2 = path.join(tempDir2, ".claude");
+      await fs.promises.mkdir(claudeDir2, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir2, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            deny: ["Read"],
+          },
+        }),
+      );
+
+      await settingsManager.setCwd(tempDir2);
+
+      result = settingsManager.checkPermission("mcp__acp__Read", { file_path: "/file.txt" });
+      expect(result.decision).toBe("deny");
+
+      // Cleanup second temp dir
+      await fs.promises.rm(tempDir2, { recursive: true, force: true });
+    });
+  });
+
+  describe("cross-tool rule isolation", () => {
+    // These tests verify the fix in commit d471ccf:
+    // Permission rules should only match their intended tool type.
+    // A Bash rule should not match Edit/Write/Read operations, and vice versa.
+
+    it("should not apply Bash rules to Edit tool calls", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            // This Bash rule has an argument that looks like a glob pattern.
+            // Before the fix, it would incorrectly match Edit operations
+            // because the argument would be interpreted as a file glob.
+            allow: ["Bash(./**:*)"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      // Bash rule should NOT allow Edit operations
+      const result = settingsManager.checkPermission("mcp__acp__Edit", {
+        file_path: path.join(tempDir, "any-file.txt"),
+      });
+      expect(result.decision).toBe("ask");
+    });
+
+    it("should not apply Bash rules to Write tool calls", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            allow: ["Bash(./**:*)"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      const result = settingsManager.checkPermission("mcp__acp__Write", {
+        file_path: path.join(tempDir, "any-file.txt"),
+      });
+      expect(result.decision).toBe("ask");
+    });
+
+    it("should not apply Bash rules to Read tool calls", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            allow: ["Bash(./**:*)"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      const result = settingsManager.checkPermission("mcp__acp__Read", {
+        file_path: path.join(tempDir, "any-file.txt"),
+      });
+      expect(result.decision).toBe("ask");
+    });
+
+    it("should not apply Edit rules to Bash tool calls", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            allow: ["Edit"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      const result = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "echo hello",
+      });
+      expect(result.decision).toBe("ask");
+    });
+
+    it("should not apply Read rules to Bash tool calls", async () => {
+      const claudeDir = path.join(tempDir, ".claude");
+      await fs.promises.mkdir(claudeDir, { recursive: true });
+      await fs.promises.writeFile(
+        path.join(claudeDir, "settings.json"),
+        JSON.stringify({
+          permissions: {
+            allow: ["Read"],
+          },
+        }),
+      );
+
+      settingsManager = new SettingsManager(tempDir);
+      await settingsManager.initialize();
+
+      const result = settingsManager.checkPermission("mcp__acp__Bash", {
+        command: "ls -la",
+      });
+      expect(result.decision).toBe("ask");
+    });
+  });
+});

src/tests/tools.test.ts

@@ -0,0 +1,318 @@
+import { describe, it, expect } from "vitest";
+import { AgentSideConnection } from "@agentclientprotocol/sdk";
+import { ToolResultBlockParam } from "@anthropic-ai/sdk/resources";
+import {
+  BetaMCPToolResultBlock,
+  BetaTextBlock,
+  BetaWebSearchResultBlock,
+  BetaWebSearchToolResultBlock,
+  BetaBashCodeExecutionToolResultBlock,
+  BetaBashCodeExecutionResultBlock,
+} from "@anthropic-ai/sdk/resources/beta.mjs";
+import { toAcpNotifications, ToolUseCache, Logger } from "../acp-agent.js";
+
+describe("rawOutput in tool call updates", () => {
+  const mockClient = {} as AgentSideConnection;
+  const mockLogger: Logger = { log: () => {}, error: () => {} };
+
+  it("should include rawOutput with string content for tool_result", () => {
+    const toolUseCache: ToolUseCache = {
+      toolu_123: {
+        type: "tool_use",
+        id: "toolu_123",
+        name: "Bash",
+        input: { command: "echo hello" },
+      },
+    };
+
+    const toolResult: ToolResultBlockParam = {
+      type: "tool_result",
+      tool_use_id: "toolu_123",
+      content: "hello\n",
+      is_error: false,
+    };
+
+    const notifications = toAcpNotifications(
+      [toolResult],
+      "assistant",
+      "test-session",
+      toolUseCache,
+      mockClient,
+      mockLogger,
+    );
+
+    expect(notifications).toHaveLength(1);
+    expect(notifications[0].update).toMatchObject({
+      sessionUpdate: "tool_call_update",
+      toolCallId: "toolu_123",
+      status: "completed",
+      rawOutput: "hello\n",
+    });
+  });
+
+  it("should include rawOutput with array content for tool_result", () => {
+    const toolUseCache: ToolUseCache = {
+      toolu_456: {
+        type: "tool_use",
+        id: "toolu_456",
+        name: "Read",
+        input: { file_path: "/test/file.txt" },
+      },
+    };
+
+    // ToolResultBlockParam content can be string or array of TextBlockParam
+    const toolResult: ToolResultBlockParam = {
+      type: "tool_result",
+      tool_use_id: "toolu_456",
+      content: [{ type: "text", text: "Line 1\nLine 2\nLine 3" }],
+      is_error: false,
+    };
+
+    const notifications = toAcpNotifications(
+      [toolResult],
+      "assistant",
+      "test-session",
+      toolUseCache,
+      mockClient,
+      mockLogger,
+    );
+
+    expect(notifications).toHaveLength(1);
+    expect(notifications[0].update).toMatchObject({
+      sessionUpdate: "tool_call_update",
+      toolCallId: "toolu_456",
+      status: "completed",
+      rawOutput: [{ type: "text", text: "Line 1\nLine 2\nLine 3" }],
+    });
+  });
+
+  it("should include rawOutput for mcp_tool_result with string content", () => {
+    const toolUseCache: ToolUseCache = {
+      toolu_789: {
+        type: "tool_use",
+        id: "toolu_789",
+        name: "mcp__server__tool",
+        input: { query: "test" },
+      },
+    };
+
+    // BetaMCPToolResultBlock content can be string or Array<BetaTextBlock>
+    const toolResult: BetaMCPToolResultBlock = {
+      type: "mcp_tool_result",
+      tool_use_id: "toolu_789",
+      content: '{"result": "success", "data": [1, 2, 3]}',
+      is_error: false,
+    };
+
+    const notifications = toAcpNotifications(
+      [toolResult],
+      "assistant",
+      "test-session",
+      toolUseCache,
+      mockClient,
+      mockLogger,
+    );
+
+    expect(notifications).toHaveLength(1);
+    expect(notifications[0].update).toMatchObject({
+      sessionUpdate: "tool_call_update",
+      toolCallId: "toolu_789",
+      status: "completed",
+      rawOutput: '{"result": "success", "data": [1, 2, 3]}',
+    });
+  });
+
+  it("should include rawOutput for mcp_tool_result with array content", () => {
+    const toolUseCache: ToolUseCache = {
+      toolu_abc: {
+        type: "tool_use",
+        id: "toolu_abc",
+        name: "mcp__server__search",
+        input: { term: "test" },
+      },
+    };
+
+    // BetaTextBlock requires citations field
+    const arrayContent: BetaTextBlock[] = [
+      { type: "text", text: "Result 1", citations: null },
+      { type: "text", text: "Result 2", citations: null },
+    ];
+
+    const toolResult: BetaMCPToolResultBlock = {
+      type: "mcp_tool_result",
+      tool_use_id: "toolu_abc",
+      content: arrayContent,
+      is_error: false,
+    };
+
+    const notifications = toAcpNotifications(
+      [toolResult],
+      "assistant",
+      "test-session",
+      toolUseCache,
+      mockClient,
+      mockLogger,
+    );
+
+    expect(notifications).toHaveLength(1);
+    expect(notifications[0].update).toMatchObject({
+      sessionUpdate: "tool_call_update",
+      toolCallId: "toolu_abc",
+      status: "completed",
+      rawOutput: arrayContent,
+    });
+  });
+
+  it("should include rawOutput for web_search_tool_result", () => {
+    const toolUseCache: ToolUseCache = {
+      toolu_web: {
+        type: "tool_use",
+        id: "toolu_web",
+        name: "WebSearch",
+        input: { query: "test search" },
+      },
+    };
+
+    // BetaWebSearchResultBlock from SDK
+    const searchResults: BetaWebSearchResultBlock[] = [
+      {
+        type: "web_search_result",
+        url: "https://example.com",
+        title: "Example",
+        encrypted_content: "encrypted content here",
+        page_age: "2 days ago",
+      },
+    ];
+
+    const toolResult: BetaWebSearchToolResultBlock = {
+      type: "web_search_tool_result",
+      tool_use_id: "toolu_web",
+      content: searchResults,
+    };
+
+    const notifications = toAcpNotifications(
+      [toolResult],
+      "assistant",
+      "test-session",
+      toolUseCache,
+      mockClient,
+      mockLogger,
+    );
+
+    expect(notifications).toHaveLength(1);
+    expect(notifications[0].update).toMatchObject({
+      sessionUpdate: "tool_call_update",
+      toolCallId: "toolu_web",
+      status: "completed",
+      rawOutput: searchResults,
+    });
+  });
+
+  it("should include rawOutput for bash_code_execution_tool_result", () => {
+    const toolUseCache: ToolUseCache = {
+      toolu_bash: {
+        type: "tool_use",
+        id: "toolu_bash",
+        name: "Bash",
+        input: { command: "ls -la" },
+      },
+    };
+
+    // BetaBashCodeExecutionResultBlock from SDK
+    const bashResult: BetaBashCodeExecutionResultBlock = {
+      type: "bash_code_execution_result",
+      stdout: "file1.txt\nfile2.txt",
+      stderr: "",
+      return_code: 0,
+      content: [],
+    };
+
+    const toolResult: BetaBashCodeExecutionToolResultBlock = {
+      type: "bash_code_execution_tool_result",
+      tool_use_id: "toolu_bash",
+      content: bashResult,
+    };
+
+    const notifications = toAcpNotifications(
+      [toolResult],
+      "assistant",
+      "test-session",
+      toolUseCache,
+      mockClient,
+      mockLogger,
+    );
+
+    expect(notifications).toHaveLength(1);
+    expect(notifications[0].update).toMatchObject({
+      sessionUpdate: "tool_call_update",
+      toolCallId: "toolu_bash",
+      status: "completed",
+      rawOutput: bashResult,
+    });
+  });
+
+  it("should set status to failed when is_error is true", () => {
+    const toolUseCache: ToolUseCache = {
+      toolu_err: {
+        type: "tool_use",
+        id: "toolu_err",
+        name: "Bash",
+        input: { command: "invalid_command" },
+      },
+    };
+
+    const toolResult: ToolResultBlockParam = {
+      type: "tool_result",
+      tool_use_id: "toolu_err",
+      content: "command not found: invalid_command",
+      is_error: true,
+    };
+
+    const notifications = toAcpNotifications(
+      [toolResult],
+      "assistant",
+      "test-session",
+      toolUseCache,
+      mockClient,
+      mockLogger,
+    );
+
+    expect(notifications).toHaveLength(1);
+    expect(notifications[0].update).toMatchObject({
+      sessionUpdate: "tool_call_update",
+      toolCallId: "toolu_err",
+      status: "failed",
+      rawOutput: "command not found: invalid_command",
+    });
+  });
+
+  it("should not emit tool_call_update for TodoWrite (emits plan instead)", () => {
+    const toolUseCache: ToolUseCache = {
+      toolu_todo: {
+        type: "tool_use",
+        id: "toolu_todo",
+        name: "TodoWrite",
+        input: { todos: [{ content: "Test task", status: "pending" }] },
+      },
+    };
+
+    const toolResult: ToolResultBlockParam = {
+      type: "tool_result",
+      tool_use_id: "toolu_todo",
+      content: "Todos updated successfully",
+      is_error: false,
+    };
+
+    const notifications = toAcpNotifications(
+      [toolResult],
+      "assistant",
+      "test-session",
+      toolUseCache,
+      mockClient,
+      mockLogger,
+    );
+
+    // TodoWrite should not emit tool_call_update - it emits plan updates instead
+    expect(notifications).toHaveLength(0);
+  });
+});

src/tests/typescript-declarations.test.ts

@@ -0,0 +1,558 @@
+import { describe, it, expect, beforeAll, afterAll, beforeEach, afterEach } from "vitest";
+import * as fs from "node:fs";
+import * as path from "node:path";
+import * as os from "node:os";
+import { spawnSync } from "child_process";
+
+describe.skipIf(!process.env.RUN_INTEGRATION_TESTS)(
+  "TypeScript declaration files integration",
+  () => {
+    let tempDir: string;
+    let tarballPath: string;
+    const projectRoot = path.resolve(__dirname, "../..");
+
+    // Base configuration templates
+    const basePackageJson = {
+      name: "ts-declaration-test",
+      version: "1.0.0",
+      type: "module",
+      dependencies: {},
+      devDependencies: {
+        typescript: "5.9.3",
+        "@types/node": "25.0.3",
+      },
+    };
+
+    const baseTsConfig = {
+      compilerOptions: {
+        target: "ES2020",
+        module: "NodeNext",
+        moduleResolution: "NodeNext",
+        lib: ["ES2020"],
+        strict: true,
+        esModuleInterop: true,
+        skipLibCheck: true, // Skip checking dependency internals, focus on our types
+        noEmit: true,
+        declaration: false,
+      },
+      include: ["*.ts"],
+    };
+
+    // Build and pack the package once for all tests
+    beforeAll(async () => {
+      // Step 1: Clean dist folder to ensure fresh build
+      const distPath = path.join(projectRoot, "dist");
+      await fs.promises.rm(distPath, { recursive: true, force: true });
+      console.log("Cleaned dist folder");
+
+      console.log("Building package...");
+
+      // Step 2: Build the package
+      const buildResult = spawnSync("npm", ["run", "build"], {
+        cwd: projectRoot,
+        stdio: "pipe",
+        encoding: "utf-8",
+      });
+
+      if (buildResult.status !== 0) {
+        throw new Error(`Build failed: ${buildResult.stderr || buildResult.stdout}`);
+      }
+
+      console.log("Packing package...");
+
+      // Step 3: Pack to create tarball
+      const packResult = spawnSync("npm", ["pack", "--pack-destination", os.tmpdir()], {
+        cwd: projectRoot,
+        stdio: "pipe",
+        encoding: "utf-8",
+      });
+
+      if (packResult.status !== 0) {
+        throw new Error(`Pack failed: ${packResult.stderr || packResult.stdout}`);
+      }
+
+      // Get the tarball filename from stdout (npm pack outputs the filename)
+      const tarballName = packResult.stdout.trim().split("\n").pop();
+      if (!tarballName) {
+        throw new Error("Failed to get tarball name from npm pack output");
+      }
+      tarballPath = path.join(os.tmpdir(), tarballName);
+
+      console.log(`Tarball created at: ${tarballPath}`);
+    }, 60000); // 60 second timeout for build
+
+    // Clean up the tarball after all tests
+    afterAll(async () => {
+      if (tarballPath && fs.existsSync(tarballPath)) {
+        await fs.promises.unlink(tarballPath);
+        console.log("Cleaned up tarball");
+      }
+    });
+
+    // Create fresh temp directory for each test
+    beforeEach(async () => {
+      tempDir = await fs.promises.mkdtemp(path.join(os.tmpdir(), "ts-declaration-test-"));
+    });
+
+    // Clean up temp directory after each test
+    afterEach(async () => {
+      if (tempDir) {
+        await fs.promises.rm(tempDir, { recursive: true, force: true });
+      }
+    });
+
+    // Helper function to set up a test TypeScript project
+    async function setupTestProject(
+      packageJson: object = basePackageJson,
+      tsconfig: object = baseTsConfig,
+    ): Promise<void> {
+      // Write package.json
+      await fs.promises.writeFile(
+        path.join(tempDir, "package.json"),
+        JSON.stringify(packageJson, null, 2),
+      );
+
+      // Write tsconfig.json
+      await fs.promises.writeFile(
+        path.join(tempDir, "tsconfig.json"),
+        JSON.stringify(tsconfig, null, 2),
+      );
+
+      // Install all dependencies (TypeScript, @types/node, and the tarball)
+      console.log(`Installing dependencies in ${tempDir}...`);
+      const installResult = spawnSync("npm", ["install", tarballPath], {
+        cwd: tempDir,
+        stdio: "pipe",
+        encoding: "utf-8",
+        timeout: 60000, // 60 second timeout
+      });
+
+      if (installResult.status !== 0) {
+        throw new Error(`npm install failed: ${installResult.stderr || installResult.stdout}`);
+      }
+    }
+
+    // Helper function to run TypeScript type checking
+    function runTypeCheck(srcDir: string = tempDir): {
+      success: boolean;
+      output: string;
+    } {
+      const result = spawnSync("npx", ["tsc", "--noEmit"], {
+        cwd: srcDir,
+        stdio: "pipe",
+        encoding: "utf-8",
+        timeout: 30000, // 30 second timeout
+      });
+
+      return {
+        success: result.status === 0,
+        output: result.stdout + result.stderr,
+      };
+    }
+
+    // Helper function to write a test TypeScript file
+    async function writeTestFile(filename: string, content: string): Promise<void> {
+      await fs.promises.writeFile(path.join(tempDir, filename), content);
+    }
+
+    // Test 1: Main exports import verification
+    it("should successfully type-check main exports", async () => {
+      await setupTestProject();
+
+      await writeTestFile(
+        "test-main-exports.ts",
+        `
+import {
+  ClaudeAcpAgent,
+  runAcp,
+  toAcpNotifications,
+  streamEventToAcpNotifications,
+  SettingsManager,
+  createMcpServer,
+  loadManagedSettings,
+  applyEnvironmentSettings,
+  nodeToWebReadable,
+  nodeToWebWritable,
+  Pushable,
+  unreachable,
+  toolInfoFromToolUse,
+  planEntries,
+  toolUpdateFromToolResult,
+  createPreToolUseHook,
+  toolNames,
+} from "@zed-industries/claude-code-acp";
+
+// Type-only imports
+import type {
+  ToolUpdateMeta,
+  NewSessionMeta,
+  ClaudeCodeSettings,
+  PermissionSettings,
+  PermissionDecision,
+  PermissionCheckResult,
+  SettingsManagerOptions,
+  ClaudePlanEntry,
+} from "@zed-industries/claude-code-acp";
+
+// Verify exports exist and have expected types
+const _runAcp: typeof runAcp = runAcp;
+const _createMcpServer: typeof createMcpServer = createMcpServer;
+const _toolNames: typeof toolNames = toolNames;
+`,
+      );
+
+      const result = runTypeCheck();
+      if (!result.success) {
+        console.error("TypeScript errors:", result.output);
+      }
+      expect(result.success).toBe(true);
+    }, 120000);
+
+    // Test 2: Deep imports verification (backwards compatibility)
+    it("should successfully type-check deep imports", async () => {
+      await setupTestProject();
+
+      await writeTestFile(
+        "test-deep-imports.ts",
+        `
+// Deep import from dist/tools.js
+import {
+  acpToolNames,
+  EDIT_TOOL_NAMES,
+  ACP_TOOL_NAME_PREFIX,
+  toolInfoFromToolUse,
+  planEntries,
+} from "@zed-industries/claude-code-acp/dist/tools.js";
+
+// Deep import from dist/settings.js
+import {
+  SettingsManager,
+  getManagedSettingsPath,
+} from "@zed-industries/claude-code-acp/dist/settings.js";
+
+// Deep import from dist/utils.js
+import {
+  Pushable,
+  nodeToWebReadable,
+  nodeToWebWritable,
+  loadManagedSettings,
+} from "@zed-industries/claude-code-acp/dist/utils.js";
+
+// Verify types work
+const prefix: string = ACP_TOOL_NAME_PREFIX;
+const editTools: readonly string[] = EDIT_TOOL_NAMES;
+`,
+      );
+
+      const result = runTypeCheck();
+      if (!result.success) {
+        console.error("TypeScript errors:", result.output);
+      }
+      expect(result.success).toBe(true);
+    }, 120000);
+
+    // Test 3: SettingsManager type shape verification
+    it("should verify SettingsManager has correct type shape", async () => {
+      await setupTestProject();
+
+      await writeTestFile(
+        "test-settings-manager.ts",
+        `
+import {
+  SettingsManager,
+  ClaudeCodeSettings,
+  PermissionCheckResult,
+  SettingsManagerOptions
+} from "@zed-industries/claude-code-acp";
+
+// Test constructor signature
+const options: SettingsManagerOptions = {
+  onChange: () => {},
+  logger: { log: console.log, error: console.error },
+};
+declare const cwd: string;
+const manager = new SettingsManager(cwd, options);
+
+// Test method signatures
+async function testMethods() {
+  // initialize returns Promise<void>
+  await manager.initialize();
+
+  // checkPermission returns PermissionCheckResult
+  const result: PermissionCheckResult = manager.checkPermission(
+    "mcp__acp__Read",
+    { file_path: "/some/path" }
+  );
+
+  // Verify decision type
+  const decision: "allow" | "deny" | "ask" = result.decision;
+  const rule: string | undefined = result.rule;
+  const source: "allow" | "deny" | "ask" | undefined = result.source;
+
+  // getSettings returns ClaudeCodeSettings
+  const settings: ClaudeCodeSettings = manager.getSettings();
+
+  // getCwd returns string
+  const currentCwd: string = manager.getCwd();
+
+  // setCwd returns Promise<void>
+  await manager.setCwd("/new/path");
+
+  // dispose returns void
+  manager.dispose();
+}
+`,
+      );
+
+      const result = runTypeCheck();
+      if (!result.success) {
+        console.error("TypeScript errors:", result.output);
+      }
+      expect(result.success).toBe(true);
+    }, 120000);
+
+    // Test 4: ClaudeAcpAgent instantiation and type verification
+    it("should verify ClaudeAcpAgent has correct type shape", async () => {
+      await setupTestProject();
+
+      await writeTestFile(
+        "test-claude-acp-agent.ts",
+        `
+import { ClaudeAcpAgent } from "@zed-industries/claude-code-acp";
+import type { AgentSideConnection } from "@agentclientprotocol/sdk";
+
+// ClaudeAcpAgent should be a class that can be instantiated
+declare const mockConnection: AgentSideConnection;
+declare const mockLogger: { log: (...args: any[]) => void; error: (...args: any[]) => void };
+
+// Test constructor - accepts AgentSideConnection and optional logger
+const agent = new ClaudeAcpAgent(mockConnection, mockLogger);
+
+// Verify it has sessions property
+const sessions: Record<string, any> = agent.sessions;
+
+// Verify it has client property
+const client: AgentSideConnection = agent.client;
+
+// Verify it has logger property
+const logger = agent.logger;
+`,
+      );
+
+      const result = runTypeCheck();
+      if (!result.success) {
+        console.error("TypeScript errors:", result.output);
+      }
+      expect(result.success).toBe(true);
+    }, 120000);
+
+    // Test 5: Type-only exports work correctly
+    it("should verify type-only exports are usable", async () => {
+      await setupTestProject();
+
+      await writeTestFile(
+        "test-type-exports.ts",
+        `
+import type {
+  ClaudeCodeSettings,
+  PermissionSettings,
+  PermissionDecision,
+  PermissionCheckResult,
+  SettingsManagerOptions,
+  ClaudePlanEntry,
+  ToolUpdateMeta,
+  NewSessionMeta,
+} from "@zed-industries/claude-code-acp";
+
+// Test ClaudeCodeSettings shape
+const settings: ClaudeCodeSettings = {
+  permissions: {
+    allow: ["Read"],
+    deny: ["Read(./.env)"],
+    ask: ["Bash"],
+    additionalDirectories: ["/extra"],
+    defaultMode: "default",
+  },
+  env: {
+    API_KEY: "secret",
+  },
+};
+
+// Test PermissionSettings shape
+const perms: PermissionSettings = {
+  allow: ["Read"],
+  deny: ["Write"],
+};
+
+// Test PermissionDecision
+const decisions: PermissionDecision[] = ["allow", "deny", "ask"];
+
+// Test ClaudePlanEntry shape
+const planEntry: ClaudePlanEntry = {
+  content: "Do something",
+  status: "pending",
+  activeForm: "Doing something",
+};
+
+// Test valid status values
+const validStatuses: ClaudePlanEntry["status"][] = [
+  "pending",
+  "in_progress",
+  "completed",
+];
+
+// Test ToolUpdateMeta shape
+const toolMeta: ToolUpdateMeta = {
+  claudeCode: {
+    toolName: "Read",
+    toolResponse: { success: true },
+  },
+};
+
+// Test NewSessionMeta shape
+const sessionMeta: NewSessionMeta = {
+  claudeCode: {
+    options: {},
+  },
+};
+`,
+      );
+
+      const result = runTypeCheck();
+      if (!result.success) {
+        console.error("TypeScript errors:", result.output);
+      }
+      expect(result.success).toBe(true);
+    }, 120000);
+
+    // Test 6: Function signatures verification
+    it("should verify function signatures are correct", async () => {
+      await setupTestProject();
+
+      await writeTestFile(
+        "test-function-signatures.ts",
+        `
+import {
+  runAcp,
+  createMcpServer,
+  toolInfoFromToolUse,
+  planEntries,
+  createPreToolUseHook,
+  loadManagedSettings,
+  applyEnvironmentSettings,
+  SettingsManager,
+} from "@zed-industries/claude-code-acp";
+
+import type { ClaudeCodeSettings } from "@zed-industries/claude-code-acp";
+
+// runAcp should be a function with no parameters that returns void
+const runAcpType: () => void = runAcp;
+
+// toolInfoFromToolUse should accept any and return object with title and kind
+const info = toolInfoFromToolUse({ name: "Read", input: {} });
+const title: string = info.title;
+const kind: string = info.kind;
+
+// planEntries should accept todos array and return array
+const entries = planEntries({
+  todos: [
+    { content: "test", status: "pending", activeForm: "testing" }
+  ]
+});
+// entries should be an array
+const entriesArray: any[] = entries;
+
+// createPreToolUseHook should accept SettingsManager and optional logger
+declare const settingsManager: SettingsManager;
+const hook = createPreToolUseHook(settingsManager, console);
+
+// loadManagedSettings should return ClaudeCodeSettings | null
+const managedSettings: ClaudeCodeSettings | null = loadManagedSettings();
+
+// applyEnvironmentSettings should accept ClaudeCodeSettings and return void
+const applyResult: void = applyEnvironmentSettings({ permissions: {} });
+`,
+      );
+
+      const result = runTypeCheck();
+      if (!result.success) {
+        console.error("TypeScript errors:", result.output);
+      }
+      expect(result.success).toBe(true);
+    }, 120000);
+
+    // Test 7: Pushable generic class verification
+    it("should verify Pushable class works correctly", async () => {
+      await setupTestProject();
+
+      await writeTestFile(
+        "test-pushable.ts",
+        `
+import { Pushable } from "@zed-industries/claude-code-acp";
+
+// Pushable should be a generic class
+const pushable = new Pushable<string>();
+
+// Should have push method
+pushable.push("test");
+
+// Should have end method
+pushable.end();
+
+// Should implement AsyncIterable
+async function consume() {
+  for await (const item of pushable) {
+    const str: string = item;
+  }
+}
+
+// Generic type parameter should work
+const numPushable = new Pushable<number>();
+numPushable.push(42);
+
+interface MyType { id: number; name: string; }
+const customPushable = new Pushable<MyType>();
+customPushable.push({ id: 1, name: "test" });
+`,
+      );
+
+      const result = runTypeCheck();
+      if (!result.success) {
+        console.error("TypeScript errors:", result.output);
+      }
+      expect(result.success).toBe(true);
+    }, 120000);
+
+    // Test 8: Verify incorrect types fail
+    it("should fail type-check with incorrect types", async () => {
+      await setupTestProject();
+
+      await writeTestFile(
+        "test-invalid-types.ts",
+        `
+import { SettingsManager, ClaudeCodeSettings } from "@zed-industries/claude-code-acp";
+
+// This should fail - SettingsManager constructor requires string cwd
+// @ts-expect-error - Testing that wrong argument type fails
+const badManager = new SettingsManager(123);
+
+// This should fail - ClaudeCodeSettings permissions must be an object
+const badSettings: ClaudeCodeSettings = {
+  // @ts-expect-error - Testing that wrong type fails
+  permissions: "not-an-object",
+};
+`,
+      );
+
+      // This test should PASS because we expect tsc to catch these errors
+      // with @ts-expect-error directives
+      const result = runTypeCheck();
+      if (!result.success) {
+        // If it fails, it means @ts-expect-error didn't catch the error
+        // which could mean the types are too permissive
+        console.error("TypeScript errors (expected @ts-expect-error to catch):", result.output);
+      }
+      expect(result.success).toBe(true);
+    }, 120000);
+  },
+);

src/tools.ts

@@ -1,17 +1,92 @@
-import { PlanEntry, ToolCallContent, ToolCallLocation, ToolKind } from "@agentclientprotocol/sdk";
-import { replaceAndCalculateLocation, SYSTEM_REMINDER, toolNames } from "./mcp-server.js";
-import { ToolResultBlockParam, WebSearchToolResultBlockParam } from "@anthropic-ai/sdk/resources";
+import {
+  ContentBlock,
+  PlanEntry,
+  ToolCallContent,
+  ToolCallLocation,
+  ToolKind,
+} from "@agentclientprotocol/sdk";
+import { SYSTEM_REMINDER } from "./mcp-server.js";
+import * as diff from "diff";
+import {
+  ImageBlockParam,
+  TextBlockParam,
+  ToolResultBlockParam,
+  WebSearchResultBlock,
+  WebSearchToolResultBlockParam,
+  WebSearchToolResultError,
+} from "@anthropic-ai/sdk/resources";
 import {
   BetaBashCodeExecutionToolResultBlockParam,
+  BetaBashCodeExecutionResultBlock,
+  BetaBashCodeExecutionToolResultError,
   BetaCodeExecutionToolResultBlockParam,
+  BetaCodeExecutionResultBlock,
+  BetaCodeExecutionToolResultError,
   BetaRequestMCPToolResultBlockParam,
   BetaTextEditorCodeExecutionToolResultBlockParam,
+  BetaTextEditorCodeExecutionViewResultBlock,
+  BetaTextEditorCodeExecutionCreateResultBlock,
+  BetaTextEditorCodeExecutionStrReplaceResultBlock,
+  BetaTextEditorCodeExecutionToolResultError,
+  BetaToolResultBlockParam,
   BetaToolSearchToolResultBlockParam,
+  BetaToolReferenceBlock,
+  BetaToolSearchToolSearchResultBlock,
+  BetaToolSearchToolResultError,
   BetaWebFetchToolResultBlockParam,
+  BetaWebFetchBlock,
+  BetaWebFetchToolResultErrorBlock,
   BetaWebSearchToolResultBlockParam,
+  BetaImageBlockParam,
 } from "@anthropic-ai/sdk/resources/beta.mjs";
+
+const acpUnqualifiedToolNames = {
+  read: "Read",
+  edit: "Edit",
+  write: "Write",
+  bash: "Bash",
+  killShell: "KillShell",
+  bashOutput: "BashOutput",
+};
+
+export const ACP_TOOL_NAME_PREFIX = "mcp__acp__";
+export const acpToolNames = {
+  read: ACP_TOOL_NAME_PREFIX + acpUnqualifiedToolNames.read,
+  edit: ACP_TOOL_NAME_PREFIX + acpUnqualifiedToolNames.edit,
+  write: ACP_TOOL_NAME_PREFIX + acpUnqualifiedToolNames.write,
+  bash: ACP_TOOL_NAME_PREFIX + acpUnqualifiedToolNames.bash,
+  killShell: ACP_TOOL_NAME_PREFIX + acpUnqualifiedToolNames.killShell,
+  bashOutput: ACP_TOOL_NAME_PREFIX + acpUnqualifiedToolNames.bashOutput,
+};
+
+export const EDIT_TOOL_NAMES = [acpToolNames.edit, acpToolNames.write];
+
+/**
+ * Union of all possible content types that can appear in tool results from the Anthropic SDK.
+ * These are transformed to valid ACP ContentBlock types by toValidAcpContent().
+ */
+type ToolResultContent =
+  | TextBlockParam
+  | ImageBlockParam
+  | BetaImageBlockParam
+  | BetaToolReferenceBlock
+  | BetaToolSearchToolSearchResultBlock
+  | BetaToolSearchToolResultError
+  | WebSearchResultBlock
+  | WebSearchToolResultError
+  | BetaWebFetchBlock
+  | BetaWebFetchToolResultErrorBlock
+  | BetaCodeExecutionResultBlock
+  | BetaCodeExecutionToolResultError
+  | BetaBashCodeExecutionResultBlock
+  | BetaBashCodeExecutionToolResultError
+  | BetaTextEditorCodeExecutionViewResultBlock
+  | BetaTextEditorCodeExecutionCreateResultBlock
+  | BetaTextEditorCodeExecutionStrReplaceResultBlock
+  | BetaTextEditorCodeExecutionToolResultError;
 import { HookCallback } from "@anthropic-ai/claude-agent-sdk";
 import { Logger } from "./acp-agent.js";
+import { SettingsManager } from "./settings.js";
 
 interface ToolInfo {
   title: string;
@@ -26,11 +101,7 @@ interface ToolUpdate {
   locations?: ToolCallLocation[];
 }
 
-export function toolInfoFromToolUse(
-  toolUse: any,
-  cachedFileContent: { [key: string]: string },
-  logger: Logger = console,
-): ToolInfo {
+export function toolInfoFromToolUse(toolUse: any): ToolInfo {
   const name = toolUse.name;
   const input = toolUse.input;
 
@@ -75,7 +146,7 @@ export function toolInfoFromToolUse(
       };
 
     case "Bash":
-    case toolNames.bash:
+    case acpToolNames.bash:
       return {
         title: input?.command ? "`" + input.command.replaceAll("`", "\\`") + "`" : "Terminal",
         kind: "execute",
@@ -91,7 +162,7 @@ export function toolInfoFromToolUse(
       };
 
     case "BashOutput":
-    case toolNames.bashOutput:
+    case acpToolNames.bashOutput:
       return {
         title: "Tail Logs",
         kind: "execute",
@@ -99,14 +170,14 @@ export function toolInfoFromToolUse(
       };
 
     case "KillShell":
-    case toolNames.killShell:
+    case acpToolNames.killShell:
       return {
         title: "Kill Process",
         kind: "execute",
         content: [],
       };
 
-    case toolNames.read: {
+    case acpToolNames.read: {
       let limit = "";
       if (input.limit) {
         limit =
@@ -152,30 +223,10 @@ export function toolInfoFromToolUse(
         locations: [],
       };
 
-    case toolNames.edit:
+    case acpToolNames.edit:
     case "Edit": {
       const path = input?.file_path ?? input?.file_path;
-      let oldText = input.old_string ?? null;
-      let newText = input.new_string ?? "";
-      let affectedLines: number[] = [];
 
-      if (path && oldText) {
-        try {
-          const oldContent = cachedFileContent[path] || "";
-          const newContent = replaceAndCalculateLocation(oldContent, [
-            {
-              oldText,
-              newText,
-              replaceAll: false,
-            },
-          ]);
-          oldText = oldContent;
-          newText = newContent.newContent;
-          affectedLines = newContent.lineNumbers;
-        } catch (e) {
-          logger.error(e);
-        }
-      }
       return {
         title: path ? `Edit \`${path}\`` : "Edit",
         kind: "edit",
@@ -185,20 +236,16 @@ export function toolInfoFromToolUse(
                 {
                   type: "diff",
                   path,
-                  oldText,
-                  newText,
+                  oldText: input.old_string ?? null,
+                  newText: input.new_string ?? "",
                 },
               ]
             : [],
-        locations: path
-          ? affectedLines.length > 0
-            ? affectedLines.map((line) => ({ line, path }))
-            : [{ path }]
-          : [],
+        locations: path ? [{ path }] : undefined,
       };
     }
 
-    case toolNames.write: {
+    case acpToolNames.write: {
       let content: ToolCallContent[] = [];
       if (input && input.file_path) {
         content = [
@@ -309,7 +356,9 @@ export function toolInfoFromToolUse(
         label += " -P";
       }
 
-      label += ` "${input.pattern}"`;
+      if (input.pattern) {
+        label += ` "${input.pattern}"`;
+      }
 
       if (input.path) {
         label += ` ${input.path}`;
@@ -408,6 +457,7 @@ export function toolInfoFromToolUse(
 export function toolUpdateFromToolResult(
   toolResult:
     | ToolResultBlockParam
+    | BetaToolResultBlockParam
     | BetaWebSearchToolResultBlockParam
     | BetaWebFetchToolResultBlockParam
     | WebSearchToolResultBlockParam
@@ -418,9 +468,19 @@ export function toolUpdateFromToolResult(
     | BetaToolSearchToolResultBlockParam,
   toolUse: any | undefined,
 ): ToolUpdate {
+  if (
+    "is_error" in toolResult &&
+    toolResult.is_error &&
+    toolResult.content &&
+    toolResult.content.length > 0
+  ) {
+    // Only return errors
+    return toAcpContentUpdate(toolResult.content, true);
+  }
+
   switch (toolUse?.name) {
     case "Read":
-    case toolNames.read:
+    case acpToolNames.read:
       if (Array.isArray(toolResult.content) && toolResult.content.length > 0) {
         return {
           content: toolResult.content.map((content: any) => ({
@@ -449,21 +509,60 @@ export function toolUpdateFromToolResult(
       }
       return {};
 
-    case toolNames.bash:
+    case acpToolNames.edit: {
+      const content: ToolCallContent[] = [];
+      const locations: ToolCallLocation[] = [];
+
+      if (
+        Array.isArray(toolResult.content) &&
+        toolResult.content.length > 0 &&
+        "text" in toolResult.content[0] &&
+        typeof toolResult.content[0].text === "string"
+      ) {
+        const patches = diff.parsePatch(toolResult.content[0].text);
+        console.error(JSON.stringify(patches));
+        for (const { oldFileName, newFileName, hunks } of patches) {
+          for (const { lines, newStart } of hunks) {
+            const oldText = [];
+            const newText = [];
+            for (const line of lines) {
+              if (line.startsWith("-")) {
+                oldText.push(line.slice(1));
+              } else if (line.startsWith("+")) {
+                newText.push(line.slice(1));
+              } else {
+                oldText.push(line.slice(1));
+                newText.push(line.slice(1));
+              }
+            }
+            if (oldText.length > 0 || newText.length > 0) {
+              locations.push({ path: newFileName || oldFileName, line: newStart });
+              content.push({
+                type: "diff",
+                path: newFileName || oldFileName,
+                oldText: oldText.join("\n") || null,
+                newText: newText.join("\n"),
+              });
+            }
+          }
+        }
+      }
+
+      const result: ToolUpdate = {};
+      if (content.length > 0) {
+        result.content = content;
+      }
+      if (locations.length > 0) {
+        result.locations = locations;
+      }
+      return result;
+    }
+
+    case acpToolNames.bash:
     case "edit":
     case "Edit":
-    case toolNames.edit:
-    case toolNames.write:
+    case acpToolNames.write:
     case "Write": {
-      if (
-        "is_error" in toolResult &&
-        toolResult.is_error &&
-        toolResult.content &&
-        toolResult.content.length > 0
-      ) {
-        // Only return errors
-        return toAcpContentUpdate(toolResult.content, true);
-      }
       return {};
     }
 
@@ -500,17 +599,20 @@ function toAcpContentUpdate(
 ): { content?: ToolCallContent[] } {
   if (Array.isArray(content) && content.length > 0) {
     return {
-      content: content.map((content: any) => ({
-        type: "content",
-        content:
-          isError && content.type === "text"
-            ? {
-                ...content,
-                text: `\`\`\`\n${content.text}\n\`\`\``,
-              }
-            : content,
+      content: content.map((c: any) => ({
+        type: "content" as const,
+        content: toAcpContentBlock(c, isError),
       })),
     };
+  } else if (typeof content === "object" && content !== null && "type" in content) {
+    return {
+      content: [
+        {
+          type: "content" as const,
+          content: toAcpContentBlock(content, isError),
+        },
+      ],
+    };
   } else if (typeof content === "string" && content.length > 0) {
     return {
       content: [
@@ -527,6 +629,74 @@ function toAcpContentUpdate(
   return {};
 }
 
+function toAcpContentBlock(content: ToolResultContent, isError: boolean): ContentBlock {
+  const wrapText = (text: string): ContentBlock => ({
+    type: "text" as const,
+    text: isError ? `\`\`\`\n${text}\n\`\`\`` : text,
+  });
+
+  switch (content.type) {
+    case "text":
+      return {
+        type: "text" as const,
+        text: isError ? `\`\`\`\n${content.text}\n\`\`\`` : content.text,
+      };
+    case "image":
+      if (content.source.type === "base64") {
+        return {
+          type: "image" as const,
+          data: content.source.data,
+          mimeType: content.source.media_type,
+        };
+      }
+      // URL and file-based images can't be converted to ACP format (requires data)
+      return wrapText(
+        content.source.type === "url"
+          ? `[image: ${content.source.url}]`
+          : "[image: file reference]",
+      );
+
+    case "tool_reference":
+      return wrapText(`Tool: ${content.tool_name}`);
+    case "tool_search_tool_search_result":
+      return wrapText(
+        `Tools found: ${content.tool_references.map((r) => r.tool_name).join(", ") || "none"}`,
+      );
+    case "tool_search_tool_result_error":
+      return wrapText(
+        `Error: ${content.error_code}${content.error_message ? ` - ${content.error_message}` : ""}`,
+      );
+    case "web_search_result":
+      return wrapText(`${content.title} (${content.url})`);
+    case "web_search_tool_result_error":
+      return wrapText(`Error: ${content.error_code}`);
+    case "web_fetch_result":
+      return wrapText(`Fetched: ${content.url}`);
+    case "web_fetch_tool_result_error":
+      return wrapText(`Error: ${content.error_code}`);
+    case "code_execution_result":
+      return wrapText(`Output: ${content.stdout || content.stderr || ""}`);
+    case "bash_code_execution_result":
+      return wrapText(`Output: ${content.stdout || content.stderr || ""}`);
+    case "code_execution_tool_result_error":
+    case "bash_code_execution_tool_result_error":
+      return wrapText(`Error: ${content.error_code}`);
+    case "text_editor_code_execution_view_result":
+      return wrapText(content.content);
+    case "text_editor_code_execution_create_result":
+      return wrapText(content.is_file_update ? "File updated" : "File created");
+    case "text_editor_code_execution_str_replace_result":
+      return wrapText(content.lines?.join("\n") || "");
+    case "text_editor_code_execution_tool_result_error":
+      return wrapText(
+        `Error: ${content.error_code}${content.error_message ? ` - ${content.error_message}` : ""}`,
+      );
+
+    default:
+      return wrapText(JSON.stringify(content));
+  }
+}
+
 export type ClaudePlanEntry = {
   content: string;
   status: "pending" | "in_progress" | "completed";
@@ -582,17 +752,80 @@ export const registerHookCallback = (
 
 /* A callback for Claude Code that is called when receiving a PostToolUse hook */
 export const createPostToolUseHook =
-  (logger: Logger = console): HookCallback =>
+  (
+    logger: Logger = console,
+    options?: {
+      onEnterPlanMode?: () => Promise<void>;
+    },
+  ): HookCallback =>
   async (input: any, toolUseID: string | undefined): Promise<{ continue: boolean }> => {
-    if (input.hook_event_name === "PostToolUse" && toolUseID) {
-      const onPostToolUseHook = toolUseCallbacks[toolUseID]?.onPostToolUseHook;
-      if (onPostToolUseHook) {
-        await onPostToolUseHook(toolUseID, input.tool_input, input.tool_response);
-        delete toolUseCallbacks[toolUseID]; // Cleanup after execution
-      } else {
-        logger.error(`No onPostToolUseHook found for tool use ID: ${toolUseID}`);
-        delete toolUseCallbacks[toolUseID];
+    if (input.hook_event_name === "PostToolUse") {
+      // Handle EnterPlanMode tool - notify client of mode change after successful execution
+      if (input.tool_name === "EnterPlanMode" && options?.onEnterPlanMode) {
+        await options.onEnterPlanMode();
+      }
+
+      if (toolUseID) {
+        const onPostToolUseHook = toolUseCallbacks[toolUseID]?.onPostToolUseHook;
+        if (onPostToolUseHook) {
+          await onPostToolUseHook(toolUseID, input.tool_input, input.tool_response);
+          delete toolUseCallbacks[toolUseID]; // Cleanup after execution
+        } else {
+          logger.error(`No onPostToolUseHook found for tool use ID: ${toolUseID}`);
+          delete toolUseCallbacks[toolUseID];
+        }
       }
     }
     return { continue: true };
   };
+
+/**
+ * Creates a PreToolUse hook that checks permissions using the SettingsManager.
+ * This runs before the SDK's built-in permission rules, allowing us to enforce
+ * our own permission settings for ACP-prefixed tools.
+ */
+export const createPreToolUseHook =
+  (settingsManager: SettingsManager, logger: Logger = console): HookCallback =>
+  async (input: any, _toolUseID: string | undefined) => {
+    if (input.hook_event_name !== "PreToolUse") {
+      return { continue: true };
+    }
+
+    const toolName = input.tool_name;
+    const toolInput = input.tool_input;
+
+    const permissionCheck = settingsManager.checkPermission(toolName, toolInput);
+
+    if (permissionCheck.decision !== "ask") {
+      logger.log(
+        `[PreToolUseHook] Tool: ${toolName}, Decision: ${permissionCheck.decision}, Rule: ${permissionCheck.rule}`,
+      );
+    }
+
+    switch (permissionCheck.decision) {
+      case "allow":
+        return {
+          continue: true,
+          hookSpecificOutput: {
+            hookEventName: "PreToolUse" as const,
+            permissionDecision: "allow" as const,
+            permissionDecisionReason: `Allowed by settings rule: ${permissionCheck.rule}`,
+          },
+        };
+
+      case "deny":
+        return {
+          continue: true,
+          hookSpecificOutput: {
+            hookEventName: "PreToolUse" as const,
+            permissionDecision: "deny" as const,
+            permissionDecisionReason: `Denied by settings rule: ${permissionCheck.rule}`,
+          },
+        };
+
+      case "ask":
+      default:
+        // Let the normal permission flow continue
+        return { continue: true };
+    }
+  };

src/utils.ts

@@ -3,8 +3,8 @@
 import { Readable, Writable } from "node:stream";
 import { WritableStream, ReadableStream } from "node:stream/web";
 import { readFileSync } from "node:fs";
-import { platform } from "node:os";
 import { Logger } from "./acp-agent.js";
+import { ClaudeCodeSettings, getManagedSettingsPath } from "./settings.js";
 
 // Useful for bridging push-based and async-iterator-based code.
 export class Pushable<T> implements AsyncIterable<T> {
@@ -90,39 +90,15 @@ export function sleep(time: number): Promise<void> {
   return new Promise((resolve) => setTimeout(resolve, time));
 }
 
-interface ManagedSettings {
-  permissions?: {
-    allow?: string[];
-    deny?: string[];
-  };
-  env?: Record<string, string>;
-}
-
-// Following the rules in https://docs.anthropic.com/en/docs/claude-code/settings#settings-files
-// This can be removed once the SDK supports it natively.
-function getManagedSettingsPath(): string {
-  const os = platform();
-  switch (os) {
-    case "darwin":
-      return "/Library/Application Support/ClaudeCode/managed-settings.json";
-    case "linux": // including WSL
-      return "/etc/claude-code/managed-settings.json";
-    case "win32":
-      return "C:\\ProgramData\\ClaudeCode\\managed-settings.json";
-    default:
-      return "/etc/claude-code/managed-settings.json";
-  }
-}
-
-export function loadManagedSettings(): ManagedSettings | null {
+export function loadManagedSettings(): ClaudeCodeSettings | null {
   try {
-    return JSON.parse(readFileSync(getManagedSettingsPath(), "utf8")) as ManagedSettings;
+    return JSON.parse(readFileSync(getManagedSettingsPath(), "utf8")) as ClaudeCodeSettings;
   } catch {
     return null;
   }
 }
 
-export function applyEnvironmentSettings(settings: ManagedSettings): void {
+export function applyEnvironmentSettings(settings: ClaudeCodeSettings): void {
   if (settings.env) {
     for (const [key, value] of Object.entries(settings.env)) {
       process.env[key] = value;
@@ -157,7 +133,6 @@ export function extractLinesWithByteLimit(
 
   let linesSeen = 0;
   let index = 0;
-  linesSeen = 0;
 
   let contentLength = 0;
   let wasLimited = false;
@@ -193,3 +168,10 @@ export function extractLinesWithByteLimit(
     linesRead: linesSeen,
   };
 }
+
+// Helper to encode a path like Claude does:
+// - Unix: "/Users/test" -> "-Users-test"
+// - Windows: "C:\Users\test" -> "C--Users-test"
+export function encodeProjectPath(cwd: string): string {
+  return cwd.replace(/[^a-zA-Z0-9]/g, "-");
+}

tsconfig.json

@@ -9,7 +9,9 @@
     "forceConsistentCasingInFileNames": true,
     "skipLibCheck": true,
     "outDir": "dist",
-    "rootDir": "src"
+    "rootDir": "src",
+    "declaration": true,
+    "declarationMap": true
   },
   "include": ["src/**/*.ts"],
   "exclude": ["node_modules", "dist"]