Fix history support (#356 )

Support windows arm builds and clean up artifact names (#355 )
Update to claude-agent-sdk 0.2.62 (#354 )
2026-10-27 12:40:32 +00:00 · 2026-02-27 12:06:47 +01:00 · 2026-02-27 10:46:23 +00:00 · 2026-02-27 10:14:30 +00:00 · 2026-02-26 22:45:12 +01:00 · 2026-02-26 22:44:20 +01:00
23 changed files with 6068 additions and 4498 deletions
--- a/.github/workflows/publish.yml
+++ b/.github/workflows/publish.yml
@@ -1,11 +1,85 @@
-name: Publish Package to npmjs
+name: Publish and Release
 on:
  push:
    tags:
      - "v*.*.*"
+  workflow_dispatch:
+
 jobs:
-  build:
+  build-binaries:
+    name: Build (${{ matrix.target }})
    runs-on: ubuntu-latest
+    permissions:
+      contents: read
+    timeout-minutes: 15
+
+    strategy:
+      fail-fast: true
+      matrix:
+        include:
+          - target: bun-linux-x64
+            artifact: claude-agent-acp
+            archive: claude-agent-acp-linux-x64.tar.gz
+          - target: bun-linux-arm64
+            artifact: claude-agent-acp
+            archive: claude-agent-acp-linux-arm64.tar.gz
+          - target: bun-linux-x64-musl
+            artifact: claude-agent-acp
+            archive: claude-agent-acp-linux-x64-musl.tar.gz
+          - target: bun-linux-arm64-musl
+            artifact: claude-agent-acp
+            archive: claude-agent-acp-linux-arm64-musl.tar.gz
+          - target: bun-darwin-x64
+            artifact: claude-agent-acp
+            archive: claude-agent-acp-darwin-x64.zip
+          - target: bun-darwin-arm64
+            artifact: claude-agent-acp
+            archive: claude-agent-acp-darwin-arm64.zip
+          - target: bun-windows-x64
+            artifact: claude-agent-acp.exe
+            archive: claude-agent-acp-windows-x64.zip
+          - target: bun-windows-arm64
+            artifact: claude-agent-acp.exe
+            archive: claude-agent-acp-windows-arm64.zip
+
+    steps:
+      - uses: actions/checkout@08c6903cd8c0fde910a37f88322edcfb5dd907a8
+
+      - uses: oven-sh/setup-bun@3d267786b128fe76c2f16a390aa2448b815359f3
+        with:
+          bun-version: latest
+
+      - name: Install dependencies
+        run: bun install
+
+      - name: Build binary
+        run: |
+          bun build src/static-entry.ts \
+            --compile \
+            --target ${{ matrix.target }} \
+            --define 'process.env.CLAUDE_AGENT_ACP_IS_SINGLE_FILE_BUN="true"' \
+            --outfile ${{ matrix.artifact }}
+
+      - name: Compress binary
+        run: |
+          if [[ "${{ matrix.archive }}" == *.zip ]]; then
+            zip ${{ matrix.archive }} ${{ matrix.artifact }}
+          else
+            tar czf ${{ matrix.archive }} ${{ matrix.artifact }}
+          fi
+
+      - name: Upload artifact
+        uses: actions/upload-artifact@b7c566a772e6b6bfb58ed0dc250532a479d7789f
+        with:
+          name: ${{ matrix.archive }}
+          path: ${{ matrix.archive }}
+
+  publish-npm:
+    name: Publish to npm
+    runs-on: ubuntu-latest
+    needs: [build-binaries]
+    if: startsWith(github.ref, 'refs/tags/')
+    environment: release # Optional: for enhanced security
    permissions:
      contents: read
      id-token: write
@@ -16,8 +90,31 @@ jobs:
        with:
          node-version: "lts/*"
          registry-url: "https://registry.npmjs.org"
+      - name: Update npm
+        run: npm install -g npm@latest
      - run: npm ci
-        # Add back provenance once repo is public
-      - run: npm publish # --provenance --access public
-        env:
-          NODE_AUTH_TOKEN: ${{ secrets.NPM_TOKEN }}
+      - run: npm run build
+      - run: npm publish
+
+  release:
+    name: Create Release
+    runs-on: ubuntu-latest
+    needs: [build-binaries, publish-npm]
+    if: startsWith(github.ref, 'refs/tags/')
+    permissions:
+      contents: write
+
+    steps:
+      - uses: actions/checkout@08c6903cd8c0fde910a37f88322edcfb5dd907a8
+
+      - name: Download all artifacts
+        uses: actions/download-artifact@37930b1c2abaa49bbe596cd826c3c89aef350131
+        with:
+          path: artifacts
+          merge-multiple: true
+
+      - name: Create Release
+        uses: softprops/action-gh-release@6da8fa9354ddfdc4aeace5fc48d7f679b5214090
+        with:
+          generate_release_notes: true
+          files: artifacts/*
--- a/.gitignore
+++ b/.gitignore
@@ -1,2 +1,5 @@
 node_modules
 dist
+.DS_Store
+.claude/*.local.*
+CLAUDE.local.md
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -0,0 +1,312 @@
+# Changelog
+
+## 0.19.2
+
+- Fix for broken notifications when reloading session messages
+
+## 0.19.1
+
+- Support windows arm builds and clean up artifact files
+
+## 0.19.0
+
+- Update to @anthropic-ai/claude-agent-sdk@0.2.62
+- Use SDK functions for listing and loading session history
+- Build single-file executables using bun.
+- Fix for overwritten disallowed tools.
+
+## 0.18.0
+
+- Switch over to built-in Claude tools. We no longer replicate specific ACP tools and just rely on sending updates based on Claude's internal tools. This means it won't use client capabilities for files or terminals, but also means there will be less difference and hopefully issues arising from the differences in behavior.
+- Support ACP session config options: https://agentclientprotocol.com/protocol/session-config-options
+- Fix for image output from tool calls.
+
+## 0.17.1
+
+- Update to @anthropic-ai/claude-agent-sdk@0.2.45 to add access to Sonnet 4.6
+
+## 0.17.0
+
+Rename from `@zed-industries/claude-code-acp` to `@zed-industries/claude-agent-acp` to align with the current [branding guidelines](https://platform.claude.com/docs/en/agent-sdk/overview#branding-guidelines)
+
+## 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
+
+## 0.12.1
+
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.61
+- Update to @agentclientprotocol/sdk@0.8.0
+
+## 0.12.0
+
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.59
+  - Brings Opus to Claude Pro plans
+  - Support "Don't Ask" profile
+- Unify ACP + Claude Code session ids
+
+## 0.11.0
+
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.57
+- Removed dependency on @anthropic-ai/claude-code since this is no longer needed
+
+## 0.10.10
+
+- Update to @agentclientprotocol/sdk@0.7.0
+
+## 0.10.9
+
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.55
+- Allow defining a custom logger when used as a library
+- Allow specifying custom options when used as a library
+- Add `CLAUDECODE=1` to terminal invocations to match default Claude Code behavior
+
+## 0.10.8
+
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.51 (adds support for Opus 4.5)
+
+## 0.10.7
+
+- Fix read/edit tool error handling so upstream errors surface
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.50
+
+## 0.10.6
+
+- Disable experimental terminal auth support for now, as it was causing issues on Windows. Will revisit with a fix later.
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.46
+
+## 0.10.5
+
+- Better error messages at end of turn if there were any
+- Add experimental support for disabling built-in tools via \_meta flag
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.44
+
+## 0.10.4
+
+- Fix tool call titles not appearing during approval in some cases
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.42
+
+## 0.10.3
+
+- Fix for experimental terminal auth support
+
+## 0.10.2
+
+- Fix incorrect stop reason for tool call refusals
+
+## 0.10.1
+
+- Add additional structured metadata to tool calls
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.37
+
+## 0.10.0
+
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.30
+- Use `canUseTool` callback instead of launching an HTTP MCP server for permission checks.
+
+## 0.9.0
+
+- Support slash commands coming from MCP servers (Prompts)
+
+## 0.8.0
+
+- Revert changes to filename for cli entrypoint
+- Provide library entrypoint via lib.ts
+
+## 0.7.0
+
+- Allow importing from this package as a library in addition to running it as a CLI. Allows for easier integration into existing node applications.
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.27
+
+## 0.6.10
+
+- Provide `agentInfo` on initialization response.
+- Update to @agentclientprotocol/sdk@0.5.1
+- Fix crash when receiving a hook_response event
+- Fix for invalid locations when read call has no path
+
+## 0.6.9
+
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.26
+- Update to @agentclientprotocol/sdk@0.5.0
+
+## 0.6.8
+
+- Fix for duplicate tokens appearing in thread with streaming enabled
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.23
+- Update to @agentclientprotocol/sdk@0.4.9
+
+## 0.6.7
+
+- Fix for invalid plan input from the model introduced in latest agent-sdk
+
+## 0.6.6
+
+- Do not enable bypassPermissions mode if in root/sudo mode, because Claude Code will not start
+
+## 0.6.5
+
+- Fix for duplicated text content after streaming
+
+## 0.6.4
+
+- Support streaming partial messages!
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.21
+
+## 0.6.3
+
+- Fix issue where slash commands were loaded before initialization was complete.
+
+## 0.6.2
+
+- Fix bug where mode selection would sometimes fire before initialization was complete.
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.19
+
+## 0.6.1
+
+- Fix to allow bypassPermissions mode to be selected (it wasn't permitted previously)
+
+## 0.6.0
+
+- Provide a model selector. We use the "default" model by default, and the user can change it via the client.
+- Make sure writes require permissions when necessary: https://github.com/zed-industries/claude-code-acp/pull/92
+- Add support for appending or overriding the system prompt: https://github.com/zed-industries/claude-code-acp/pull/91
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.15
+- Update to @agentclientprotocol/sdk@0.4.8
+
+## 0.5.5
+
+- Migrate to @agentclientprotocol/sdk@0.4.5
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.13
+
+## 0.5.4
+
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.11
+- Enable setting CLAUDE_CODE_EXECUTABLE to override the executable used by the SDK https://github.com/zed-industries/claude-code-acp/pull/86
+
+## 0.5.3
+
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.8
+- Update to @zed-industries/agent-client-protocol@v0.4.5
+
+## 0.5.2
+
+- Add back @anthropic-ai/claude-code@2.0.1 as runtime dependency
+
+## 0.5.1
+
+- Update to @anthropic-ai/claude-agent-sdk@v0.1.1
+- Make improvements to ACP tools provided to the model
+
+## 0.5.0
+
+- Migrate to @anthropic-ai/claude-agent-sdk@v0.1.0
+
+## v0.4.7
+
+- More efficient file reads from the client.
+
+## v0.4.6
+
+- Update to @anthropic-ai/claude-code@v1.0.128
+
+## v0.4.5
+
+- Update to @anthropic-ai/claude-code@v1.0.124
+- Update to @zed-industries/agent-client-protocol@v0.4.3
+
+## v0.4.4
+
+- Update to @anthropic-ai/claude-code@v1.0.123
+- Update to @zed-industries/agent-client-protocol@v0.4.2
+
+## v0.4.3
+
+- Move ACP tools over MCP from an "http" MCP server to an "sdk" one so more tool calls can stay in-memory.
+- Update to @anthropic-ai/claude-code@v1.0.119
+- Update to @zed-industries/agent-client-protocol@v0.4.0
+
+## v0.4.2
+
+- Fix missing package.json metadata
+
+## v0.4.1
+
+- Add support for /compact command [ecfd36a](https://github.com/zed-industries/claude-code-acp/commit/ecfd36afa6c4e31f12e1daf9b8a2bdc12dda1794)
+- Add default limits to read tool [7bd1638](https://github.com/zed-industries/claude-code-acp/commit/7bd163818bb959b11fd2c933eff73ad83c57abb8)
+- Better rendering of Tool errors [491efe3](https://github.com/zed-industries/claude-code-acp/commit/491efe32e8547075842e448d873fc01b2ffabf3a)
+- Load managed-settings.json [f691024](https://github.com/zed-industries/claude-code-acp/commit/f691024350362858e00b97248ac68e356d2331c2)
+- Update to @anthropic-ai/claude-code@v1.0.113
+- Update to @zed-industries/agent-client-protocol@v0.3.1
--- a/README.md
+++ b/README.md
@@ -1,10 +1,10 @@
-# ACP adapter for Claude Code
+# ACP adapter for the Claude Agent SDK

-[![npm](https://img.shields.io/npm/v/%40zed-industries%2Fclaude-code-acp)](https://www.npmjs.com/package/@zed-industries/claude-code-acp)
+[![npm](https://img.shields.io/npm/v/%40zed-industries%2Fclaude-agent-acp)](https://www.npmjs.com/package/@zed-industries/claude-agent-acp)

-Use [Claude Code](https://www.anthropic.com/claude-code) from [ACP-compatible](https://agentclientprotocol.com) clients such as [Zed](https://zed.dev)!
+Use [Claude Agent SDK](https://platform.claude.com/docs/en/agent-sdk/overview#branding-guidelines) 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
@@ -24,7 +24,7 @@ Learn more about the [Agent Client Protocol](https://agentclientprotocol.com/).

 The latest version of Zed can already use this adapter out of the box.

-To use Claude Code, open the Agent Panel and click "New Claude Code Thread" from the `+` button menu in the top-right:
+To use Claude Agent, open the Agent Panel and click "New Claude Agent Thread" from the `+` button menu in the top-right:

 https://github.com/user-attachments/assets/ddce66c7-79ac-47a3-ad59-4a6a3ca74903

@@ -32,24 +32,27 @@ Read the docs on [External Agent](https://zed.dev/docs/ai/external-agents) suppo

 ### Other clients

- Neovim via [CodeCompanion.nvim](https://codecompanion.olimorris.dev/configuration/adapters#setup-claude-code-via-acp)
-
-[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-agent-acp
 ```

-You can then use `claude-code-acp` as a regular ACP agent:
+You can then use `claude-agent-acp` as a regular ACP agent:

 ```
-ANTHROPIC_API_KEY=sk-... claude-code-acp
+ANTHROPIC_API_KEY=sk-... claude-agent-acp
 ```

+#### Single-file executable
+
+Pre-built single-file binaries are available on the [Releases](https://github.com/zed-industries/claude-agent-acp/releases) page for Linux, macOS, and Windows.
+These binaries bundle everything needed and don't require Node.js.
+
 ## License

 Apache-2.0
--- a/docs/RELEASES.md
+++ b/docs/RELEASES.md
@@ -0,0 +1,24 @@
+## How to publish a new release
+
+1. Create a new branch prep-vX.X.X
+
+```sh
+git checkout -b prep-vX.X.X
+```
+
+2. Bump the version in package.json
+
+```sh
+npm version vX.X.X
+```
+
+3. Add a new entry in CHANGELOG.md
+4. Create a PR for `prev-vX.X.X` & merge it
+5. Create tag and push it
+
+```sh
+git tag vX.X.X
+git push origin vX.X.X
+```
+
+6. Paste CHANGELOG into release notes and publish the version on GitHub
--- a/package-lock.json
+++ b/package-lock.json
--- a/package.json
+++ b/package.json
@@ -1,17 +1,26 @@
 {
-  "name": "@zed-industries/claude-code-acp",
+  "name": "@zed-industries/claude-agent-acp",
  "publishConfig": {
    "access": "public"
  },
+  "version": "0.19.2",
+  "description": "An ACP-compatible coding agent powered by the Claude Agent SDK (TypeScript)",
+  "main": "dist/lib.js",
+  "types": "dist/lib.d.ts",
  "bin": {
-    "claude-code-acp": "./dist/index.js"
+    "claude-agent-acp": "dist/index.js"
  },
-  "version": "0.4.0",
-  "description": "An ACP-compatible coding agent powered by the Claude Code SDK (TypeScript)",
-  "main": "dist/index.js",
  "type": "module",
+  "exports": {
+    ".": {
+      "types": "./dist/lib.d.ts",
+      "import": "./dist/lib.js"
+    },
+    "./*": "./*"
+  },
  "files": [
    "dist/",
+    "!dist/tests/",
    "README.md",
    "LICENSE",
    "package.json"
@@ -40,31 +49,32 @@
    "sdk",
    "code"
  ],
+  "homepage": "https://github.com/zed-industries/claude-agent-acp#readme",
+  "bugs": {
+    "url": "https://github.com/zed-industries/claude-agent-acp/issues"
+  },
+  "repository": {
+    "type": "git",
+    "url": "git+https://github.com/zed-industries/claude-agent-acp.git"
+  },
  "author": "Zed Industries",
  "license": "Apache-2.0",
  "dependencies": {
-    "@anthropic-ai/claude-code": "1.0.111",
-    "@modelcontextprotocol/sdk": "1.17.4",
-    "@zed-industries/agent-client-protocol": "0.2.0-alpha.8",
-    "diff": "8.0.2",
-    "express": "5.1.0",
-    "minimist": "1.2.8",
-    "uuid": "11.1.0"
+    "@agentclientprotocol/sdk": "0.14.1",
+    "@anthropic-ai/claude-agent-sdk": "0.2.62"
  },
  "devDependencies": {
-    "@types/express": "5.0.3",
-    "@types/minimist": "1.2.5",
-    "@types/node": "24.3.1",
-    "@types/uuid": "10.0.0",
-    "@typescript-eslint/eslint-plugin": "8.43.0",
-    "@typescript-eslint/parser": "8.43.0",
-    "@vitest/ui": "3.2.4",
-    "eslint": "9.35.0",
+    "@anthropic-ai/sdk": "0.78.0",
+    "@eslint/js": "10.0.1",
+    "@types/node": "25.3.2",
+    "@typescript-eslint/eslint-plugin": "8.56.1",
+    "@typescript-eslint/parser": "8.56.1",
+    "eslint": "10.0.2",
    "eslint-config-prettier": "10.1.8",
-    "globals": "16.4.0",
-    "prettier": "3.6.2",
+    "globals": "17.3.0",
+    "prettier": "3.8.1",
    "ts-node": "10.9.2",
-    "typescript": "5.9.2",
-    "vitest": "3.2.4"
+    "typescript": "5.9.3",
+    "vitest": "4.0.18"
  }
 }
--- a/src/acp-agent.ts
+++ b/src/acp-agent.ts
--- a/src/index.ts
+++ b/src/index.ts
@@ -19,7 +19,7 @@ process.on("unhandledRejection", (reason, promise) => {
  console.error("Unhandled Rejection at:", promise, "reason:", reason);
 });

-import { runAcp as runAcp } from "./acp-agent.js";
+import { runAcp } from "./acp-agent.js";
 runAcp();

 // Keep process alive
--- a/src/lib.ts
+++ b/src/lib.ts
@@ -0,0 +1,26 @@
+// Export the main agent class and utilities for library usage
+export {
+  ClaudeAcpAgent,
+  runAcp,
+  toAcpNotifications,
+  streamEventToAcpNotifications,
+  type ToolUpdateMeta,
+  type NewSessionMeta,
+} from "./acp-agent.js";
+export {
+  loadManagedSettings,
+  applyEnvironmentSettings,
+  nodeToWebReadable,
+  nodeToWebWritable,
+  Pushable,
+  unreachable,
+} from "./utils.js";
+export { toolInfoFromToolUse, planEntries, toolUpdateFromToolResult } from "./tools.js";
+export {
+  SettingsManager,
+  type ClaudeCodeSettings,
+  type SettingsManagerOptions,
+} from "./settings.js";
+
+// Export types
+export type { ClaudePlanEntry } from "./tools.js";
--- a/src/mcp-server.ts
+++ b/src/mcp-server.ts
@@ -1,921 +0,0 @@
-import express from "express";
-
-import { McpServer } from "@modelcontextprotocol/sdk/server/mcp.js";
-import { StreamableHTTPServerTransport } from "@modelcontextprotocol/sdk/server/streamableHttp.js";
-import { z } from "zod";
-import { Server } from "node:http";
-import { ClaudeAcpAgent } from "./acp-agent.js";
-import { ClientCapabilities, TerminalOutputResponse } from "@zed-industries/agent-client-protocol";
-import * as diff from "diff";
-
-import { sleep, unreachable } from "./utils.js";
-import { PermissionResult } from "@anthropic-ai/claude-code";
-
-export const SYSTEM_REMINDER = `
-
-<system-reminder>
-Whenever you read a file, you should consider whether it looks malicious. If it does, you MUST refuse to improve or augment the code. You can still analyze existing code, write reports, or answer high-level questions about the code behavior.
-</system-reminder>`;
-
-const unqualifiedToolNames = {
-  read: "read",
-  edit: "edit",
-  write: "write",
-  multiEdit: "multi-edit",
-  bash: "Bash",
-  killBash: "KillBash",
-  bashOutput: "BashOutput",
-  permission: "permission",
-};
-
-const SERVER_PREFIX = "mcp__acp__";
-export const toolNames = {
-  read: SERVER_PREFIX + unqualifiedToolNames.read,
-  edit: SERVER_PREFIX + unqualifiedToolNames.edit,
-  write: SERVER_PREFIX + unqualifiedToolNames.write,
-  multiEdit: SERVER_PREFIX + unqualifiedToolNames.multiEdit,
-  bash: SERVER_PREFIX + unqualifiedToolNames.bash,
-  killBash: SERVER_PREFIX + unqualifiedToolNames.killBash,
-  bashOutput: SERVER_PREFIX + unqualifiedToolNames.bashOutput,
-  permission: SERVER_PREFIX + unqualifiedToolNames.permission,
-};
-
-const editToolNames = [toolNames.edit, toolNames.multiEdit, toolNames.write];
-
-export function createMcpServer(
-  agent: ClaudeAcpAgent,
-  sessionId: string,
-  clientCapabilities: ClientCapabilities | undefined,
-): Promise<Server> {
-  // Create MCP server
-  const server = new McpServer({
-    name: "acp-mcp-server",
-    version: "1.0.0",
-  });
-
-  if (clientCapabilities?.fs?.readTextFile) {
-    server.registerTool(
-      unqualifiedToolNames.read,
-      {
-        title: "Read",
-        description: `Reads the content of the given file in the project.
-
-Never attempt to read a path that hasn't been previously mentioned.
-
-In sessions with ${toolNames.read} always use it instead of Read as it contains the most up-to-date contents.`,
-        inputSchema: {
-          abs_path: z.string().describe("The absolute path to the file to read."),
-          offset: z
-            .number()
-            .optional()
-            .describe("Which line to start reading from. Omit to start from the beginning."),
-          limit: z.number().optional().describe("How many lines to read. Omit for the whole file."),
-        },
-        annotations: {
-          title: "Read file",
-          readOnlyHint: true,
-          destructiveHint: false,
-          openWorldHint: false,
-          idempotentHint: false,
-        },
-      },
-      async (input) => {
-        try {
-          const session = agent.sessions[sessionId];
-          if (!session) {
-            return {
-              content: [
-                {
-                  type: "text",
-                  text: "The user has left the building",
-                },
-              ],
-            };
-          }
-          const content = await agent.readTextFile({
-            sessionId,
-            path: input.abs_path,
-            limit: input.limit,
-            line: input.offset,
-          });
-
-          return {
-            content: [
-              {
-                type: "text",
-                text: content.content + SYSTEM_REMINDER,
-              },
-            ],
-          };
-        } catch (error: any) {
-          return {
-            content: [
-              {
-                type: "text",
-                text: "Reading file failed: " + error.message,
-              },
-            ],
-          };
-        }
-      },
-    );
-  }
-
-  if (clientCapabilities?.fs?.writeTextFile) {
-    server.registerTool(
-      unqualifiedToolNames.write,
-      {
-        title: "Write",
-        description: `Writes content to the specified file in the project.
-
-In sessions with ${toolNames.write} always use it instead of Write as it will
-allow the user to conveniently review changes.`,
-        inputSchema: {
-          abs_path: z.string().describe("The absolute path to the file to write"),
-          content: z.string().describe("The full content to write"),
-        },
-        annotations: {
-          title: "Write file",
-          readOnlyHint: false,
-          destructiveHint: false,
-          openWorldHint: false,
-          idempotentHint: false,
-        },
-      },
-      async (input) => {
-        try {
-          const session = agent.sessions[sessionId];
-          if (!session) {
-            return {
-              content: [
-                {
-                  type: "text",
-                  text: "The user has left the building",
-                },
-              ],
-            };
-          }
-          await agent.writeTextFile({
-            sessionId,
-            path: input.abs_path,
-            content: input.content,
-          });
-
-          return {
-            content: [],
-          };
-        } catch (error: any) {
-          return {
-            content: [
-              {
-                type: "text",
-                text: "Writing file failed: " + error.message,
-              },
-            ],
-          };
-        }
-      },
-    );
-
-    server.registerTool(
-      unqualifiedToolNames.edit,
-      {
-        title: "Edit",
-        description: `Edit a file.
-
-In sessions with ${toolNames.edit} always use it instead of Edit as it will
-allow the user to conveniently review changes.
-
-File editing instructions:
- The \`old_string\` param must match existing file content, including indentation.
- The \`old_string\` param must come from the actual file, not an outline.
- The \`old_string\` section must not be empty.
- Be minimal with replacements:
-  - For unique lines, include only those lines.
-  - For non-unique lines, include enough context to identify them.
- Do not escape quotes, newlines, or other characters.
- Only edit the specified file.
- If the \`old_string\` value isn't found in the file, the edit won't be applied. The tool will fail and must be retried.`,
-        inputSchema: {
-          abs_path: z.string().describe("The absolute path to the file to read."),
-          old_string: z.string().describe("The old text to replace (must be unique in the file)"),
-          new_string: z.string().describe("The new text."),
-        },
-        annotations: {
-          title: "Edit file",
-          readOnlyHint: false,
-          destructiveHint: false,
-          openWorldHint: false,
-          idempotentHint: false,
-        },
-      },
-      async (input) => {
-        const session = agent.sessions[sessionId];
-        if (!session) {
-          return {
-            content: [
-              {
-                type: "text",
-                text: "The user has left the building",
-              },
-            ],
-          };
-        }
-
-        const { content } = await agent.readTextFile({
-          sessionId,
-          path: input.abs_path,
-        });
-
-        const { newContent } = replaceAndCalculateLocation(content, [
-          {
-            oldText: input.old_string,
-            newText: input.new_string,
-            replaceAll: false,
-          },
-        ]);
-
-        const patch = diff.createPatch(input.abs_path, content, newContent);
-
-        await agent.writeTextFile({
-          sessionId,
-          path: input.abs_path,
-          content: newContent,
-        });
-
-        return {
-          content: [
-            {
-              type: "text",
-              text: patch,
-            },
-          ],
-        };
-      },
-    );
-
-    server.registerTool(
-      unqualifiedToolNames.multiEdit,
-      {
-        title: "Multi Edit",
-        description: `Edit a file with multiple sequential edits.
-
-In sessions with ${toolNames.multiEdit} always use it instead of MultiEdit as it will
-allow the user to conveniently review changes.
-
-File editing instructions:
- The \`old_string\` param must match existing file content, including indentation.
- The \`old_string\` param must come from the actual file, not an outline.
- The \`old_string\` section must not be empty.
- Be minimal with replacements:
-  - For unique lines, include only those lines.
-  - For non-unique lines, include enough context to identify them, unless you're using \`replace_all\`
- Do not escape quotes, newlines, or other characters.
- If any of the provided \`old_string\` values aren't found in the file, no edits will be applied. The tool will fail and must be retried.`,
-        inputSchema: {
-          file_path: z.string().describe("The absolute path to the file to modify"),
-          edits: z
-            .array(
-              z.object({
-                old_string: z.string().describe("The text to replace"),
-                new_string: z.string().describe("The text to replace it with"),
-                replace_all: z
-                  .boolean()
-                  .optional()
-                  .describe("Replace all occurrences of old_string (default false)"),
-              }),
-            )
-            .min(1)
-            .describe("Array of edit operations to perform sequentially on the file"),
-        },
-        annotations: {
-          title: "Multi Edit file",
-          readOnlyHint: false,
-          destructiveHint: false,
-          openWorldHint: false,
-          idempotentHint: false,
-        },
-      },
-      async (input) => {
-        const session = agent.sessions[sessionId];
-        if (!session) {
-          return {
-            content: [
-              {
-                type: "text",
-                text: "The user has left the building",
-              },
-            ],
-          };
-        }
-
-        const { content } = await agent.readTextFile({
-          sessionId,
-          path: input.file_path,
-        });
-
-        const { newContent } = replaceAndCalculateLocation(
-          content,
-          input.edits.map((edit) => ({
-            oldText: edit.old_string,
-            newText: edit.new_string,
-            replaceAll: edit.replace_all ?? false,
-          })),
-        );
-
-        const patch = diff.createPatch(input.file_path, content, newContent);
-
-        await agent.writeTextFile({
-          sessionId,
-          path: input.file_path,
-          content: newContent,
-        });
-
-        return {
-          content: [
-            {
-              type: "text",
-              text: patch,
-            },
-          ],
-        };
-      },
-    );
-  }
-
-  if (agent.clientCapabilities?.terminal) {
-    server.registerTool(
-      unqualifiedToolNames.bash,
-      {
-        title: "Bash",
-        description: "Executes a bash command",
-        inputSchema: {
-          command: z.string().describe("The bash command to execute as a one-liner"),
-          timeout_ms: z
-            .number()
-            .default(2 * 60 * 1000)
-            .describe("Optional timeout in milliseconds"),
-          run_in_background: z
-            .boolean()
-            .default(false)
-            .describe(
-              `When set to true, the command is started 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.killBash}\` 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,
-          sessionId,
-          outputByteLimit: 32_000,
-        });
-
-        await agent.client.sessionUpdate({
-          sessionId,
-          update: {
-            sessionUpdate: "tool_call_update",
-            toolCallId,
-            status: "in_progress",
-            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_ms).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: ${handle.id}`,
-              },
-            ],
-          };
-        }
-
-        await using terminal = handle;
-
-        const { status } = await statusPromise;
-
-        if (status === "aborted") {
-          return {
-            content: [{ type: "text", text: "Tool cancelled by user" }],
-          };
-        }
-
-        const output = await terminal.currentOutput();
-
-        return {
-          content: [{ type: "text", text: toolCommandOutput(status, output) }],
-        };
-      },
-    );
-
-    server.registerTool(
-      unqualifiedToolNames.bashOutput,
-      {
-        title: "BashOutput",
-        description:
-          "Returns the current output and exit status of a background bash command by its id. Includes only new output since last invocation.",
-        inputSchema: {
-          id: z
-            .string()
-            .describe(`The id of the background bash command as returned by \`${toolNames.bash}\``),
-        },
-      },
-      async (input) => {
-        const bgTerm = agent.backgroundTerminals[input.id];
-
-        if (!bgTerm) {
-          throw new Error(`Unknown shell ${input.id}`);
-        }
-
-        if (bgTerm.status === "started") {
-          const newOutput = await bgTerm.handle.currentOutput();
-          const strippedOutput = stripCommonPrefix(
-            bgTerm.lastOutput?.output ?? "",
-            newOutput.output,
-          );
-          bgTerm.lastOutput = newOutput;
-
-          return {
-            content: [
-              {
-                type: "text",
-                text: toolCommandOutput(bgTerm.status, {
-                  ...newOutput,
-                  output: strippedOutput,
-                }),
-              },
-            ],
-          };
-        } else {
-          return {
-            content: [
-              {
-                type: "text",
-                text: toolCommandOutput(bgTerm.status, bgTerm.pendingOutput),
-              },
-            ],
-          };
-        }
-      },
-    );
-
-    server.registerTool(
-      unqualifiedToolNames.killBash,
-      {
-        title: "KillBash",
-        description: "Stops a background command by its id",
-        inputSchema: {
-          id: z
-            .string()
-            .describe(`The id of the background bash command as returned by \`${toolNames.bash}\``),
-        },
-      },
-      async (input) => {
-        const bgTerm = agent.backgroundTerminals[input.id];
-
-        if (!bgTerm) {
-          throw new Error(`Unknown shell ${input.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),
-              },
-            };
-            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: {
-            return unreachable(bgTerm);
-          }
-        }
-      },
-    );
-  }
-
-  const alwaysAllowedTools: { [key: string]: boolean } = {};
-  server.registerTool(
-    unqualifiedToolNames.permission,
-    {
-      title: "Permission Tool",
-      description: "Used to request tool permissions",
-      inputSchema: {
-        tool_name: z.string(),
-        input: z.any(),
-        tool_use_id: z.string().optional(),
-      },
-    },
-    async (input) => {
-      const result = await canUseTool(input);
-
-      return {
-        content: [{ type: "text", text: JSON.stringify(result) }],
-      };
-    },
-  );
-
-  async function canUseTool(input: {
-    tool_use_id?: string;
-    tool_name: string;
-    input?: any;
-  }): Promise<PermissionResult> {
-    const session = agent.sessions[sessionId];
-    if (!session) {
-      return {
-        behavior: "deny",
-        message: "Session not found",
-      };
-    }
-
-    if (input.tool_name === "ExitPlanMode") {
-      const response = await agent.client.requestPermission({
-        options: [
-          {
-            kind: "allow_always",
-            name: "Yes, and auto-accept edits",
-            optionId: "acceptEdits",
-          },
-          { kind: "allow_once", name: "Yes, and manually approve edits", optionId: "default" },
-          { kind: "reject_once", name: "No, keep planning", optionId: "plan" },
-        ],
-        sessionId,
-        toolCall: {
-          toolCallId: input.tool_use_id!,
-          rawInput: input.input,
-        },
-      });
-
-      if (
-        response.outcome?.outcome === "selected" &&
-        (response.outcome.optionId === "default" || response.outcome.optionId === "acceptEdits")
-      ) {
-        session.permissionMode = response.outcome.optionId;
-        await agent.client.sessionUpdate({
-          sessionId,
-          update: {
-            sessionUpdate: "current_mode_update",
-            currentModeId: response.outcome.optionId,
-          },
-        });
-
-        return {
-          behavior: "allow",
-          updatedInput: input.input,
-          updatedPermissions: [
-            { type: "setMode", mode: response.outcome.optionId, destination: "session" },
-          ],
-        };
-      } else {
-        return {
-          behavior: "deny",
-          message: "User rejected request to exit plan mode.",
-        };
-      }
-    }
-
-    if (
-      session.permissionMode === "bypassPermissions" ||
-      (session.permissionMode === "acceptEdits" && editToolNames.includes(input.tool_name)) ||
-      alwaysAllowedTools[input.tool_name]
-    ) {
-      return {
-        behavior: "allow",
-        updatedInput: input.input,
-      };
-    }
-
-    const response = await agent.client.requestPermission({
-      options: [
-        {
-          kind: "allow_always",
-          name: "Always Allow",
-          optionId: "allow_always",
-        },
-        { kind: "allow_once", name: "Allow", optionId: "allow" },
-        { kind: "reject_once", name: "Reject", optionId: "reject" },
-      ],
-      sessionId,
-      toolCall: {
-        toolCallId: input.tool_use_id!,
-        rawInput: input.input,
-      },
-    });
-    if (
-      response.outcome?.outcome === "selected" &&
-      (response.outcome.optionId === "allow" || response.outcome.optionId === "allow_always")
-    ) {
-      if (response.outcome.optionId === "allow_always") {
-        alwaysAllowedTools[input.tool_name] = true;
-      }
-      return {
-        behavior: "allow",
-        updatedInput: input.input,
-      };
-    } else {
-      return {
-        behavior: "deny",
-        message: "User refused permission to run tool",
-      };
-    }
-  }
-
-  const app = express();
-  app.use(express.json());
-
-  app.post("/mcp", async (req, res) => {
-    try {
-      const transport: StreamableHTTPServerTransport = new StreamableHTTPServerTransport({
-        sessionIdGenerator: undefined,
-      });
-      res.on("close", () => {
-        transport.close();
-        server.close();
-      });
-      await server.connect(transport);
-      await transport.handleRequest(req, res, req.body);
-    } catch (error) {
-      if (!res.headersSent) {
-        res.status(500).json({
-          jsonrpc: "2.0",
-          error: {
-            code: -32603,
-            message: `Internal server error: ${error}`,
-          },
-          id: null,
-        });
-      }
-    }
-  });
-
-  return new Promise((resolve, reject) => {
-    const listener = app.listen(0, "127.0.0.1", (error) => {
-      if (error) {
-        reject(error);
-        return;
-      }
-      resolve(listener);
-    });
-  });
-}
-
-function stripCommonPrefix(a: string, b: string): string {
-  let i = 0;
-  while (i < a.length && i < b.length && a[i] === b[i]) {
-    i++;
-  }
-  return b.slice(i);
-}
-
-function toolCommandOutput(
-  status: "started" | "aborted" | "exited" | "killed" | "timedOut",
-  output: TerminalOutputResponse,
-): string {
-  const { exitStatus, output: commandOutput, truncated } = output;
-
-  let toolOutput = "";
-
-  switch (status) {
-    case "started":
-    case "exited": {
-      if (exitStatus && (exitStatus.exitCode ?? null) === null) {
-        toolOutput += `Interrupted by the user. `;
-      }
-      break;
-    }
-    case "killed":
-      toolOutput += `Killed. `;
-      break;
-    case "timedOut":
-      toolOutput += `Timed out. `;
-      break;
-    case "aborted":
-      break;
-    default: {
-      const unreachable: never = status;
-      return unreachable;
-    }
-  }
-
-  if (exitStatus) {
-    if (typeof exitStatus.exitCode === "number") {
-      toolOutput += `Exited with code ${exitStatus.exitCode}.`;
-    }
-
-    if (typeof exitStatus.signal === "string") {
-      toolOutput += `Signal \`${exitStatus.signal}\`. `;
-    }
-
-    toolOutput += "Final output:\n\n";
-  } else {
-    toolOutput += "New output:\n\n";
-  }
-
-  toolOutput += commandOutput;
-
-  if (truncated) {
-    toolOutput += `\n\nCommand output was too long, so it was truncated to ${commandOutput.length} bytes.`;
-  }
-
-  return toolOutput;
-}
-
-/**
- * Replace text in a file and calculate the line numbers where the edits occurred.
- *
- * @param fileContent - The full file content
- * @param edits - Array of edit operations to apply sequentially
- * @returns the new content and the line numbers where replacements occurred in the final content
- */
-export function replaceAndCalculateLocation(
-  fileContent: string,
-  edits: Array<{
-    oldText: string;
-    newText: string;
-    replaceAll?: boolean;
-  }>,
-): { newContent: string; lineNumbers: number[] } {
-  let currentContent = fileContent;
-
-  // Use unique markers to track where replacements happen
-  const markerPrefix = `__REPLACE_MARKER_${Math.random().toString(36).substr(2, 9)}_`;
-  let markerCounter = 0;
-  const markers: string[] = [];
-
-  // Apply edits sequentially, inserting markers at replacement positions
-  for (const edit of edits) {
-    // Skip empty oldText
-    if (edit.oldText === "") {
-      throw new Error(`The provided \`old_string\` is empty.\n\nNo edits were applied.`);
-    }
-
-    if (edit.replaceAll) {
-      // Replace all occurrences with marker + newText
-      const parts: string[] = [];
-      let lastIndex = 0;
-      let searchIndex = 0;
-
-      while (true) {
-        const index = currentContent.indexOf(edit.oldText, searchIndex);
-        if (index === -1) {
-          if (searchIndex === 0) {
-            throw new Error(
-              `The provided \`old_string\` does not appear in the file: "${edit.oldText}".\n\nNo edits were applied.`,
-            );
-          }
-          break;
-        }
-
-        // Add content before the match
-        parts.push(currentContent.substring(lastIndex, index));
-
-        // Add marker and replacement
-        const marker = `${markerPrefix}${markerCounter++}__`;
-        markers.push(marker);
-        parts.push(marker + edit.newText);
-
-        lastIndex = index + edit.oldText.length;
-        searchIndex = lastIndex;
-      }
-
-      // Add remaining content
-      parts.push(currentContent.substring(lastIndex));
-      currentContent = parts.join("");
-    } else {
-      // Replace first occurrence only
-      const index = currentContent.indexOf(edit.oldText);
-      if (index === -1) {
-        throw new Error(
-          `The provided \`old_string\` does not appear in the file: "${edit.oldText}".\n\nNo edits were applied.`,
-        );
-      } else {
-        const marker = `${markerPrefix}${markerCounter++}__`;
-        markers.push(marker);
-        currentContent =
-          currentContent.substring(0, index) +
-          marker +
-          edit.newText +
-          currentContent.substring(index + edit.oldText.length);
-      }
-    }
-  }
-
-  // Find line numbers where markers appear in the content
-  const lineNumbers: number[] = [];
-  for (const marker of markers) {
-    const index = currentContent.indexOf(marker);
-    if (index !== -1) {
-      const lineNumber = Math.max(
-        0,
-        currentContent.substring(0, index).split(/\r\n|\r|\n/).length - 1,
-      );
-      lineNumbers.push(lineNumber);
-    }
-  }
-
-  // Remove all markers from the final content
-  let finalContent = currentContent;
-  for (const marker of markers) {
-    finalContent = finalContent.replace(marker, "");
-  }
-
-  // Dedupe and sort line numbers
-  const uniqueLineNumbers = [...new Set(lineNumbers)].sort();
-
-  return { newContent: finalContent, lineNumbers: uniqueLineNumbers };
-}
--- a/src/settings.ts
+++ b/src/settings.ts
@@ -0,0 +1,269 @@
+import * as fs from "node:fs";
+import * as path from "node:path";
+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 ClaudeCodeSettings {
+  env?: Record<string, string>;
+  model?: string;
+}
+
+/**
+ * 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 = {};
+
+    for (const settings of allSettings) {
+      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);
+  }
+
+  /**
+   * 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;
+  }
+}
--- a/src/static-entry.ts
+++ b/src/static-entry.ts
@@ -0,0 +1,7 @@
+if (process.argv.includes("--cli")) {
+  process.argv = process.argv.filter((arg) => arg !== "--cli");
+  // @ts-expect-error -- no types
+  await import("@anthropic-ai/claude-agent-sdk/cli.js");
+} else {
+  await import("./index.js");
+}
--- a/src/tests/.claude/commands/say-hello.md
+++ b/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.
--- a/src/tests/acp-agent.test.ts
+++ b/src/tests/acp-agent.test.ts
--- a/src/tests/create-session-options.test.ts
+++ b/src/tests/create-session-options.test.ts
@@ -0,0 +1,185 @@
+import { describe, it, expect, beforeEach, vi } from "vitest";
+import { AgentSideConnection, SessionNotification } from "@agentclientprotocol/sdk";
+import type { Options } from "@anthropic-ai/claude-agent-sdk";
+import type { ClaudeAcpAgent as ClaudeAcpAgentType } from "../acp-agent.js";
+
+let capturedOptions: Options | undefined;
+vi.mock("@anthropic-ai/claude-agent-sdk", async () => {
+  const actual = await vi.importActual<typeof import("@anthropic-ai/claude-agent-sdk")>(
+    "@anthropic-ai/claude-agent-sdk",
+  );
+  return {
+    ...actual,
+    query: (args: { prompt: unknown; options: Options }) => {
+      capturedOptions = args.options;
+      return {
+        initializationResult: async () => ({
+          models: [
+            { value: "claude-sonnet-4-5", displayName: "Claude Sonnet", description: "Fast" },
+          ],
+        }),
+        setModel: async () => {},
+        supportedCommands: async () => [],
+        [Symbol.asyncIterator]: async function* () {},
+      };
+    },
+  };
+});
+
+vi.mock("../tools.js", async () => {
+  const actual = await vi.importActual<typeof import("../tools.js")>("../tools.js");
+  return {
+    ...actual,
+    registerHookCallback: vi.fn(),
+  };
+});
+
+describe("createSession options merging", () => {
+  let agent: ClaudeAcpAgentType;
+  let ClaudeAcpAgent: typeof ClaudeAcpAgentType;
+
+  function createMockClient(): AgentSideConnection {
+    return {
+      sessionUpdate: async (_notification: SessionNotification) => {},
+      requestPermission: async () => ({ outcome: { outcome: "cancelled" } }),
+      readTextFile: async () => ({ content: "" }),
+      writeTextFile: async () => ({}),
+    } as unknown as AgentSideConnection;
+  }
+
+  beforeEach(async () => {
+    capturedOptions = undefined;
+
+    vi.resetModules();
+    const acpAgent = await import("../acp-agent.js");
+    ClaudeAcpAgent = acpAgent.ClaudeAcpAgent;
+
+    agent = new ClaudeAcpAgent(createMockClient());
+  });
+
+  it("merges user-provided disallowedTools with ACP internal list", async () => {
+    await agent.newSession({
+      cwd: "/test",
+      mcpServers: [],
+      _meta: {
+        claudeCode: {
+          options: {
+            disallowedTools: ["WebSearch", "WebFetch"],
+          },
+        },
+      },
+    });
+
+    // User-provided tools should be present
+    expect(capturedOptions!.disallowedTools).toContain("WebSearch");
+    expect(capturedOptions!.disallowedTools).toContain("WebFetch");
+    // ACP's internal disallowed tool should also be present
+    expect(capturedOptions!.disallowedTools).toContain("AskUserQuestion");
+  });
+
+  it("works when user provides no disallowedTools", async () => {
+    await agent.newSession({
+      cwd: "/test",
+      mcpServers: [],
+    });
+
+    expect(capturedOptions!.disallowedTools).toContain("AskUserQuestion");
+  });
+
+  it("works when user provides empty disallowedTools", async () => {
+    await agent.newSession({
+      cwd: "/test",
+      mcpServers: [],
+      _meta: {
+        claudeCode: {
+          options: {
+            disallowedTools: [],
+          },
+        },
+      },
+    });
+
+    expect(capturedOptions!.disallowedTools).toContain("AskUserQuestion");
+  });
+
+  it("includes both user and built-in disallowed tools when disableBuiltInTools is true", async () => {
+    await agent.newSession({
+      cwd: "/test",
+      mcpServers: [],
+      _meta: {
+        disableBuiltInTools: true,
+        claudeCode: {
+          options: {
+            disallowedTools: ["CustomTool"],
+          },
+        },
+      },
+    });
+
+    const disallowed = capturedOptions!.disallowedTools!;
+    // User-provided
+    expect(disallowed).toContain("CustomTool");
+    // ACP internal
+    expect(disallowed).toContain("AskUserQuestion");
+    // Built-in tools disabled by disableBuiltInTools
+    expect(disallowed).toContain("Read");
+    expect(disallowed).toContain("Write");
+    expect(disallowed).toContain("Bash");
+  });
+
+  it("merges user-provided hooks with ACP hooks", async () => {
+    const userPreToolUseHook = { hooks: [{ command: "echo pre" }] };
+
+    await agent.newSession({
+      cwd: "/test",
+      mcpServers: [],
+      _meta: {
+        claudeCode: {
+          options: {
+            hooks: {
+              PreToolUse: [userPreToolUseHook],
+              PostToolUse: [{ hooks: [{ command: "echo user-post" }] }],
+            },
+          },
+        },
+      },
+    });
+
+    // User's PreToolUse hooks should be preserved
+    expect(capturedOptions!.hooks?.PreToolUse).toEqual([userPreToolUseHook]);
+    // PostToolUse should contain both user and ACP hooks
+    expect(capturedOptions!.hooks?.PostToolUse).toHaveLength(2);
+  });
+
+  it("merges user-provided mcpServers with ACP mcpServers", async () => {
+    await agent.newSession({
+      cwd: "/test",
+      mcpServers: [
+        {
+          name: "acp-server",
+          command: "node",
+          args: ["acp-server.js"],
+          env: [],
+        },
+      ],
+      _meta: {
+        claudeCode: {
+          options: {
+            mcpServers: {
+              "user-server": {
+                type: "stdio",
+                command: "node",
+                args: ["server.js"],
+              },
+            },
+          },
+        },
+      },
+    });
+
+    // User-provided MCP server should be present
+    expect(capturedOptions!.mcpServers).toHaveProperty("user-server");
+    // ACP-provided MCP server should also be present
+    expect(capturedOptions!.mcpServers).toHaveProperty("acp-server");
+  });
+});
--- a/src/tests/replace-and-calculate-location.test.ts
+++ b/src/tests/replace-and-calculate-location.test.ts
@@ -1,334 +0,0 @@
-import { describe, it, expect } from "vitest";
-import { replaceAndCalculateLocation } from "../mcp-server.js";
-
-describe("replaceAndCalculateLocation", () => {
-  it("should replace first occurrence and return correct line number", () => {
-    const content = "line 1\nline 2 with text\nline 3 with text\nline 4";
-    const result = replaceAndCalculateLocation(content, [{ oldText: "text", newText: "replaced" }]);
-
-    expect(result.newContent).toBe("line 1\nline 2 with replaced\nline 3 with text\nline 4");
-    expect(result.lineNumbers).toEqual([1]); // Line 2 (0-based indexing)
-  });
-
-  it("should replace all occurrences when replaceAll is true", () => {
-    const content = "line 1\nline 2 with text\nline 3 with text\nline 4";
-    const result = replaceAndCalculateLocation(content, [
-      { oldText: "text", newText: "replaced", replaceAll: true },
-    ]);
-
-    expect(result.newContent).toBe("line 1\nline 2 with replaced\nline 3 with replaced\nline 4");
-    expect(result.lineNumbers).toEqual([1, 2]); // Lines 2 and 3 (0-based)
-  });
-
-  it("should return empty line numbers array when no match found", () => {
-    const content = "line 1\nline 2\nline 3";
-    expect(() => {
-      replaceAndCalculateLocation(content, [{ oldText: "notfound", newText: "replaced" }]);
-    }).toThrow('The provided `old_string` does not appear in the file: "notfound"');
-  });
-
-  it("should handle Windows line endings (CRLF)", () => {
-    const content = "line 1\r\nline 2 with text\r\nline 3 with text\r\nline 4";
-    const result = replaceAndCalculateLocation(content, [
-      { oldText: "text", newText: "replaced", replaceAll: true },
-    ]);
-
-    expect(result.newContent).toBe(
-      "line 1\r\nline 2 with replaced\r\nline 3 with replaced\r\nline 4",
-    );
-    expect(result.lineNumbers).toEqual([1, 2]);
-  });
-
-  it("should handle old Mac line endings (CR)", () => {
-    const content = "line 1\rline 2 with text\rline 3 with text\rline 4";
-    const result = replaceAndCalculateLocation(content, [
-      { oldText: "text", newText: "replaced", replaceAll: true },
-    ]);
-
-    expect(result.newContent).toBe("line 1\rline 2 with replaced\rline 3 with replaced\rline 4");
-    expect(result.lineNumbers).toEqual([1, 2]);
-  });
-
-  it("should handle mixed line endings", () => {
-    const content = "line 1\nline 2 with text\r\nline 3 with text\rline 4";
-    const result = replaceAndCalculateLocation(content, [
-      { oldText: "text", newText: "replaced", replaceAll: true },
-    ]);
-
-    expect(result.newContent).toBe("line 1\nline 2 with replaced\r\nline 3 with replaced\rline 4");
-    expect(result.lineNumbers).toEqual([1, 2]);
-  });
-
-  it("should handle text at the beginning of file", () => {
-    const content = "text at start\nline 2\nline 3";
-    const result = replaceAndCalculateLocation(content, [{ oldText: "text", newText: "replaced" }]);
-
-    expect(result.newContent).toBe("replaced at start\nline 2\nline 3");
-    expect(result.lineNumbers).toEqual([0]); // First line (0-based)
-  });
-
-  it("should handle text at the end of file", () => {
-    const content = "line 1\nline 2\nlast line with text";
-    const result = replaceAndCalculateLocation(content, [{ oldText: "text", newText: "replaced" }]);
-
-    expect(result.newContent).toBe("line 1\nline 2\nlast line with replaced");
-    expect(result.lineNumbers).toEqual([2]); // Last line (0-based)
-  });
-
-  it("should handle multiple occurrences on the same line", () => {
-    const content = "line 1\ntext text text\nline 3";
-    const result = replaceAndCalculateLocation(content, [
-      { oldText: "text", newText: "replaced", replaceAll: true },
-    ]);
-
-    expect(result.newContent).toBe("line 1\nreplaced replaced replaced\nline 3");
-    expect(result.lineNumbers).toEqual([1]); // All on line 2 (0-based), deduplicated
-  });
-
-  it("should handle empty file content", () => {
-    expect(() => {
-      replaceAndCalculateLocation("", [{ oldText: "text", newText: "replaced" }]);
-    }).toThrowError(
-      'The provided `old_string` does not appear in the file: "text".\n\nNo edits were applied.',
-    );
-  });
-
-  it("should handle empty search text", () => {
-    // Test with replaceAll false (default)
-    const content1 = "line 1\nline 2\nline 3";
-    expect(() => {
-      replaceAndCalculateLocation(content1, [{ oldText: "", newText: "replaced" }]);
-    }).toThrowError("The provided `old_string` is empty.\n\nNo edits were applied.");
-
-    // Test with replaceAll true on single line
-    const content2 = "abc";
-    expect(() => {
-      replaceAndCalculateLocation(content2, [{ oldText: "", newText: "X", replaceAll: true }]);
-    }).toThrowError("The provided `old_string` is empty.\n\nNo edits were applied.");
-
-    // Test with replaceAll true on multiline content
-    const content3 = "ab\ncd";
-    expect(() => {
-      replaceAndCalculateLocation(content3, [{ oldText: "", newText: "X", replaceAll: true }]);
-    }).toThrowError("The provided `old_string` is empty.\n\nNo edits were applied.");
-  });
-
-  it("should handle single line content", () => {
-    const content = "single line with text here";
-    const result = replaceAndCalculateLocation(content, [{ oldText: "text", newText: "replaced" }]);
-
-    expect(result.newContent).toBe("single line with replaced here");
-    expect(result.lineNumbers).toEqual([0]); // Line 1 (0-based)
-  });
-
-  it("should handle special characters in search text", () => {
-    const content = "line 1\nline with $special.chars*\nline 3";
-    const result = replaceAndCalculateLocation(content, [
-      { oldText: "$special.chars*", newText: "replaced" },
-    ]);
-
-    expect(result.newContent).toBe("line 1\nline with replaced\nline 3");
-    expect(result.lineNumbers).toEqual([1]);
-  });
-
-  it("should handle newlines in search text", () => {
-    const content = "line 1\nline 2\nline 3";
-    const result = replaceAndCalculateLocation(content, [
-      { oldText: "1\nline", newText: "1\nmodified line" },
-    ]);
-
-    expect(result.newContent).toBe("line 1\nmodified line 2\nline 3");
-    expect(result.lineNumbers).toEqual([0]); // Match starts at line 1 (0-based)
-  });
-
-  it("should handle newlines in replacement text", () => {
-    const content = "line 1\nline 2\nline 3";
-    const result = replaceAndCalculateLocation(content, [
-      { oldText: "line 2", newText: "line 2a\nline 2b" },
-    ]);
-
-    expect(result.newContent).toBe("line 1\nline 2a\nline 2b\nline 3");
-    expect(result.lineNumbers).toEqual([1]);
-  });
-
-  it("should handle very long lines", () => {
-    const longLine = "a".repeat(10000) + "text" + "b".repeat(10000);
-    const content = `line 1\n${longLine}\nline 3`;
-    const result = replaceAndCalculateLocation(content, [{ oldText: "text", newText: "replaced" }]);
-
-    expect(result.newContent).toBe(
-      `line 1\n${"a".repeat(10000)}replaced${"b".repeat(10000)}\nline 3`,
-    );
-    expect(result.lineNumbers).toEqual([1]);
-  });
-
-  it("should handle many lines", () => {
-    const lines = Array.from({ length: 1000 }, (_, i) => `line ${i}`);
-    lines[500] = "line with text";
-    const content = lines.join("\n");
-
-    const result = replaceAndCalculateLocation(content, [{ oldText: "text", newText: "replaced" }]);
-
-    expect(result.lineNumbers).toEqual([500]);
-    expect(result.newContent).includes("line with replaced");
-  });
-
-  it("should handle overlapping matches correctly", () => {
-    const content = "aaaa\nbbbb\ncccc";
-    const result = replaceAndCalculateLocation(content, [
-      { oldText: "aa", newText: "xx", replaceAll: true },
-    ]);
-
-    // Should replace non-overlapping occurrences
-    expect(result.newContent).toBe("xxxx\nbbbb\ncccc");
-    expect(result.lineNumbers).toEqual([0]); // Two matches on first line, deduplicated
-  });
-
-  it("should preserve content after replacement with different lengths", () => {
-    const content = "short\nmedium line\nlong line here";
-
-    // Replacing with longer text
-    const result1 = replaceAndCalculateLocation(content, [
-      { oldText: "short", newText: "very very long text" },
-    ]);
-    expect(result1.newContent).toBe("very very long text\nmedium line\nlong line here");
-    expect(result1.lineNumbers).toEqual([0]);
-
-    // Replacing with shorter text
-    const result2 = replaceAndCalculateLocation(content, [
-      { oldText: "medium line", newText: "m" },
-    ]);
-    expect(result2.newContent).toBe("short\nm\nlong line here");
-    expect(result2.lineNumbers).toEqual([1]);
-  });
-
-  it("should handle consecutive replacements", () => {
-    const content = "text1 text2 text3";
-    const result = replaceAndCalculateLocation(content, [
-      { oldText: "text", newText: "replaced", replaceAll: true },
-    ]);
-
-    expect(result.newContent).toBe("replaced1 replaced2 replaced3");
-    expect(result.lineNumbers).toEqual([0]); // All on first line, deduplicated
-  });
-
-  it("should handle case-sensitive replacements", () => {
-    const content = "Text TEXT text";
-    const result = replaceAndCalculateLocation(content, [
-      { oldText: "text", newText: "replaced", replaceAll: true },
-    ]);
-
-    // Should only replace exact matches
-    expect(result.newContent).toBe("Text TEXT replaced");
-    expect(result.lineNumbers).toEqual([0]); // Only lowercase "text" matched
-  });
-
-  it("should handle replacement at exact end of line", () => {
-    const content = "line ends with text\nnext line";
-    const result = replaceAndCalculateLocation(content, [{ oldText: "text", newText: "replaced" }]);
-
-    expect(result.newContent).toBe("line ends with replaced\nnext line");
-    expect(result.lineNumbers).toEqual([0]);
-  });
-
-  it("should handle replacement spanning multiple lines", () => {
-    const content = "line 1\nspan\nacross\nlines\nline 5";
-    const result = replaceAndCalculateLocation(content, [
-      { oldText: "span\nacross\nlines", newText: "single" },
-    ]);
-
-    expect(result.newContent).toBe("line 1\nsingle\nline 5");
-    expect(result.lineNumbers).toEqual([1]); // Match starts at line 2 (0-based)
-  });
-
-  it("should default replaceAll to false", () => {
-    const content = "match match match";
-
-    // Without passing replaceAll parameter
-    const result = replaceAndCalculateLocation(content, [
-      { oldText: "match", newText: "replaced" },
-    ]);
-
-    expect(result.newContent).toBe("replaced match match");
-    expect(result.lineNumbers).toEqual([0]); // Only first match
-  });
-
-  it("should handle multiple edits with correct line numbers", () => {
-    const content = "line 1\nfoo bar\nline 3\nfoo baz\nline 5\nbar foo\nline 7";
-    const result = replaceAndCalculateLocation(content, [
-      { oldText: "foo", newText: "FOO", replaceAll: true },
-      { oldText: "bar", newText: "BAR", replaceAll: false },
-      { oldText: "line 3", newText: "LINE THREE" },
-    ]);
-
-    // Should replace:
-    // - All "foo" occurrences (lines 1, 3, 5 in original)
-    // - First "bar" occurrence (line 1 after first edit)
-    // - "line 3" (line 2 after previous edits)
-    expect(result.newContent).toBe("line 1\nFOO BAR\nLINE THREE\nFOO baz\nline 5\nbar FOO\nline 7");
-
-    // Line numbers reflect position in final content, deduplicated and sorted
-    expect(result.lineNumbers).toEqual([
-      1, // FOO and BAR on line 1
-      2, // LINE THREE on line 2
-      3, // FOO on line 3
-      5, // FOO on line 5
-    ]);
-  });
-
-  it("should handle multiple edits with overlapping text", () => {
-    const content = "hello world\nhello hello\nworld hello world";
-    const result = replaceAndCalculateLocation(content, [
-      { oldText: "hello", newText: "hi", replaceAll: false },
-      { oldText: "world", newText: "earth", replaceAll: true },
-      { oldText: "hello", newText: "greetings", replaceAll: true },
-    ]);
-
-    // First edit replaces first "hello" only
-    // Second edit replaces all "world" in the modified content
-    // Third edit replaces remaining "hello"s in the modified content
-    expect(result.newContent).toBe("hi earth\ngreetings greetings\nearth greetings earth");
-
-    // Line numbers reflect position in final content, deduplicated and sorted
-    expect(result.lineNumbers).toEqual([
-      0, // hi and earth on line 0
-      1, // greetings (multiple) on line 1
-      2, // earth and greetings on line 2
-    ]);
-  });
-
-  it("should handle complex scenarios with marker-like text", () => {
-    // Test that our marker approach doesn't get confused by similar text
-    const content = "line 1\n__MARKER__text\nline 3\n__REPLACE_MARKER_abc__\nline 5";
-    const result = replaceAndCalculateLocation(content, [
-      { oldText: "__MARKER__", newText: "REPLACED", replaceAll: true },
-      { oldText: "text", newText: "content" },
-      { oldText: "__REPLACE_MARKER_abc__", newText: "DONE" },
-    ]);
-
-    expect(result.newContent).toBe("line 1\nREPLACEDcontent\nline 3\nDONE\nline 5");
-
-    // Line numbers should be correct even with marker-like text
-    expect(result.lineNumbers).toEqual([
-      1, // REPLACED on line 1
-      3, // DONE on line 3
-    ]);
-  });
-
-  it("should handle edits where newText matches subsequent oldText", () => {
-    const content = "foo\nbar\nbaz";
-    const result = replaceAndCalculateLocation(content, [
-      { oldText: "foo", newText: "bar" },
-      { oldText: "bar", newText: "baz", replaceAll: true },
-      { oldText: "baz", newText: "qux", replaceAll: true },
-    ]);
-
-    // First edit: foo -> bar
-    // Second edit: both original bar and new bar -> baz
-    // Third edit: all baz instances -> qux
-    expect(result.newContent).toBe("qux\nqux\nqux");
-
-    // All replacements end up on their respective lines
-    expect(result.lineNumbers).toEqual([0, 1, 2]);
-  });
-});
--- a/src/tests/session-config-options.test.ts
+++ b/src/tests/session-config-options.test.ts
@@ -0,0 +1,418 @@
+import { describe, it, expect, beforeEach, vi } from "vitest";
+import { AgentSideConnection, SessionNotification } from "@agentclientprotocol/sdk";
+import type { ClaudeAcpAgent as ClaudeAcpAgentType } from "../acp-agent.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,
+  };
+});
+
+const SESSION_ID = "test-session-id";
+
+const MOCK_MODES = {
+  currentModeId: "default",
+  availableModes: [
+    { id: "default", name: "Default", description: "Standard behavior" },
+    { id: "plan", name: "Plan Mode", description: "Planning mode" },
+    { id: "acceptEdits", name: "Accept Edits", description: "Auto-accept edits" },
+  ],
+};
+
+const MOCK_MODELS = {
+  currentModelId: "claude-opus-4-5",
+  availableModels: [
+    { modelId: "claude-opus-4-5", name: "Claude Opus", description: "Most capable" },
+    { modelId: "claude-sonnet-4-5", name: "Claude Sonnet", description: "Balanced" },
+  ],
+};
+
+const MOCK_CONFIG_OPTIONS = [
+  {
+    id: "mode",
+    name: "Mode",
+    type: "select",
+    category: "mode",
+    currentValue: "default",
+    options: MOCK_MODES.availableModes.map((m) => ({
+      value: m.id,
+      name: m.name,
+      description: m.description,
+    })),
+  },
+  {
+    id: "model",
+    name: "Model",
+    type: "select",
+    category: "model",
+    currentValue: "claude-opus-4-5",
+    options: MOCK_MODELS.availableModels.map((m) => ({
+      value: m.modelId,
+      name: m.name,
+      description: m.description,
+    })),
+  },
+];
+
+describe("session config options", () => {
+  let agent: ClaudeAcpAgentType;
+  let ClaudeAcpAgent: typeof ClaudeAcpAgentType;
+  let sessionUpdates: SessionNotification[];
+  let createSessionSpy: ReturnType<typeof vi.fn>;
+  let setPermissionModeSpy: ReturnType<typeof vi.fn>;
+  let setModelSpy: ReturnType<typeof vi.fn>;
+
+  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 populateSession() {
+    setPermissionModeSpy = vi.fn();
+    setModelSpy = vi.fn();
+
+    (agent as unknown as { sessions: Record<string, unknown> }).sessions[SESSION_ID] = {
+      query: {
+        setPermissionMode: setPermissionModeSpy,
+        setModel: setModelSpy,
+        supportedCommands: async () => [],
+      },
+      input: null,
+      cancelled: false,
+      permissionMode: "default",
+      settingsManager: {},
+      configOptions: structuredClone(MOCK_CONFIG_OPTIONS),
+    };
+  }
+
+  beforeEach(async () => {
+    sessionUpdates = [];
+    registerHookCallbackSpy.mockClear();
+
+    vi.resetModules();
+    const acpAgent = await import("../acp-agent.js");
+    ClaudeAcpAgent = acpAgent.ClaudeAcpAgent;
+
+    agent = new ClaudeAcpAgent(createMockClient());
+    createSessionSpy = vi.fn(async () => ({
+      sessionId: SESSION_ID,
+      modes: MOCK_MODES,
+      models: MOCK_MODELS,
+      configOptions: MOCK_CONFIG_OPTIONS,
+    }));
+    (agent as unknown as { createSession: typeof createSessionSpy }).createSession =
+      createSessionSpy;
+  });
+
+  describe("newSession returns configOptions", () => {
+    it("includes configOptions in the response", async () => {
+      const response = await agent.newSession({ cwd: "/test", mcpServers: [] });
+      expect(response.configOptions).toBeDefined();
+      expect(response.configOptions).toEqual(MOCK_CONFIG_OPTIONS);
+    });
+
+    it("includes mode and model config options", async () => {
+      const response = await agent.newSession({ cwd: "/test", mcpServers: [] });
+      const modeOption = response.configOptions?.find((o) => o.id === "mode");
+      const modelOption = response.configOptions?.find((o) => o.id === "model");
+      expect(modeOption).toBeDefined();
+      expect(modelOption).toBeDefined();
+    });
+  });
+
+  describe("loadSession returns configOptions", () => {
+    it("includes configOptions from createSession", async () => {
+      // loadSession calls findSessionFile first - override the whole method
+      const loadSessionSpy = vi.fn(async () => ({
+        modes: MOCK_MODES,
+        models: MOCK_MODELS,
+        configOptions: MOCK_CONFIG_OPTIONS,
+      }));
+      (agent as unknown as { loadSession: typeof loadSessionSpy }).loadSession = loadSessionSpy;
+
+      const response = await agent.loadSession({
+        cwd: "/test",
+        sessionId: SESSION_ID,
+        mcpServers: [],
+      });
+      expect(response.configOptions).toEqual(MOCK_CONFIG_OPTIONS);
+    });
+  });
+
+  describe("setSessionConfigOption", () => {
+    beforeEach(() => {
+      populateSession();
+    });
+
+    it("throws when session not found", async () => {
+      await expect(
+        agent.setSessionConfigOption({
+          sessionId: "nonexistent",
+          configId: "mode",
+          value: "plan",
+        }),
+      ).rejects.toThrow("Session not found");
+    });
+
+    it("throws when config option not found", async () => {
+      await expect(
+        agent.setSessionConfigOption({
+          sessionId: SESSION_ID,
+          configId: "unknown-option",
+          value: "some-value",
+        }),
+      ).rejects.toThrow("Unknown config option: unknown-option");
+    });
+
+    it("throws when value is not valid for the option", async () => {
+      await expect(
+        agent.setSessionConfigOption({
+          sessionId: SESSION_ID,
+          configId: "mode",
+          value: "invalid-mode",
+        }),
+      ).rejects.toThrow("Invalid value for config option mode: invalid-mode");
+    });
+
+    it("changes mode, sends current_mode_update but not config_option_update", async () => {
+      await agent.setSessionConfigOption({
+        sessionId: SESSION_ID,
+        configId: "mode",
+        value: "plan",
+      });
+
+      expect(setPermissionModeSpy).toHaveBeenCalledWith("plan");
+
+      const modeUpdate = sessionUpdates.find(
+        (n) => n.update.sessionUpdate === "current_mode_update",
+      );
+      expect(modeUpdate?.update).toMatchObject({
+        sessionUpdate: "current_mode_update",
+        currentModeId: "plan",
+      });
+
+      const configUpdate = sessionUpdates.find(
+        (n) => n.update.sessionUpdate === "config_option_update",
+      );
+      expect(configUpdate).toBeUndefined();
+    });
+
+    it("changes model and does not send a config_option_update notification", async () => {
+      await agent.setSessionConfigOption({
+        sessionId: SESSION_ID,
+        configId: "model",
+        value: "claude-sonnet-4-5",
+      });
+
+      expect(setModelSpy).toHaveBeenCalledWith("claude-sonnet-4-5");
+
+      const configUpdate = sessionUpdates.find(
+        (n) => n.update.sessionUpdate === "config_option_update",
+      );
+      expect(configUpdate).toBeUndefined();
+    });
+
+    it("returns full configOptions in the response", async () => {
+      const response = await agent.setSessionConfigOption({
+        sessionId: SESSION_ID,
+        configId: "mode",
+        value: "plan",
+      });
+
+      expect(response.configOptions).toHaveLength(MOCK_CONFIG_OPTIONS.length);
+      const modeOption = response.configOptions.find((o) => o.id === "mode");
+      expect(modeOption?.currentValue).toBe("plan");
+    });
+
+    it("other options are unchanged when one is updated", async () => {
+      const response = await agent.setSessionConfigOption({
+        sessionId: SESSION_ID,
+        configId: "mode",
+        value: "plan",
+      });
+
+      const modelOption = response.configOptions.find((o) => o.id === "model");
+      expect(modelOption?.currentValue).toBe("claude-opus-4-5");
+    });
+  });
+
+  describe("setSessionMode sends config_option_update", () => {
+    beforeEach(() => {
+      populateSession();
+    });
+
+    it("sends config_option_update when mode is changed via setSessionMode", async () => {
+      await agent.setSessionMode({ sessionId: SESSION_ID, modeId: "acceptEdits" });
+
+      const configUpdate = sessionUpdates.find(
+        (n) => n.update.sessionUpdate === "config_option_update",
+      );
+      expect(configUpdate).toBeDefined();
+      expect(configUpdate?.update).toMatchObject({
+        sessionUpdate: "config_option_update",
+        configOptions: expect.arrayContaining([
+          expect.objectContaining({ id: "mode", currentValue: "acceptEdits" }),
+        ]),
+      });
+    });
+
+    it("updates stored configOptions currentValue when mode changes", async () => {
+      await agent.setSessionMode({ sessionId: SESSION_ID, modeId: "plan" });
+
+      const session = (
+        agent as unknown as {
+          sessions: Record<string, { configOptions: typeof MOCK_CONFIG_OPTIONS }>;
+        }
+      ).sessions[SESSION_ID];
+      const modeOption = session.configOptions.find((o) => o.id === "mode");
+      expect(modeOption?.currentValue).toBe("plan");
+    });
+
+    it("does not send config_option_update for an invalid mode", async () => {
+      await expect(
+        agent.setSessionMode({ sessionId: SESSION_ID, modeId: "not-a-mode" as any }),
+      ).rejects.toThrow("Invalid Mode");
+
+      const configUpdate = sessionUpdates.find(
+        (n) => n.update.sessionUpdate === "config_option_update",
+      );
+      expect(configUpdate).toBeUndefined();
+    });
+  });
+
+  describe("unstable_setSessionModel sends config_option_update", () => {
+    beforeEach(() => {
+      populateSession();
+    });
+
+    it("sends config_option_update when model is changed via setSessionModel", async () => {
+      await agent.unstable_setSessionModel({
+        sessionId: SESSION_ID,
+        modelId: "claude-sonnet-4-5",
+      });
+
+      const configUpdate = sessionUpdates.find(
+        (n) => n.update.sessionUpdate === "config_option_update",
+      );
+      expect(configUpdate).toBeDefined();
+      expect(configUpdate?.update).toMatchObject({
+        sessionUpdate: "config_option_update",
+        configOptions: expect.arrayContaining([
+          expect.objectContaining({ id: "model", currentValue: "claude-sonnet-4-5" }),
+        ]),
+      });
+    });
+
+    it("updates stored configOptions currentValue when model changes", async () => {
+      await agent.unstable_setSessionModel({
+        sessionId: SESSION_ID,
+        modelId: "claude-sonnet-4-5",
+      });
+
+      const session = (
+        agent as unknown as {
+          sessions: Record<string, { configOptions: typeof MOCK_CONFIG_OPTIONS }>;
+        }
+      ).sessions[SESSION_ID];
+      const modelOption = session.configOptions.find((o) => o.id === "model");
+      expect(modelOption?.currentValue).toBe("claude-sonnet-4-5");
+    });
+  });
+
+  describe("no config_option_update notification when using setSessionConfigOption", () => {
+    beforeEach(() => {
+      populateSession();
+    });
+
+    it("sends no config_option_update when setting mode via config option", async () => {
+      await agent.setSessionConfigOption({
+        sessionId: SESSION_ID,
+        configId: "mode",
+        value: "plan",
+      });
+
+      const configUpdates = sessionUpdates.filter(
+        (n) => n.update.sessionUpdate === "config_option_update",
+      );
+      expect(configUpdates).toHaveLength(0);
+    });
+
+    it("sends no config_option_update when setting model via config option", async () => {
+      await agent.setSessionConfigOption({
+        sessionId: SESSION_ID,
+        configId: "model",
+        value: "claude-sonnet-4-5",
+      });
+
+      const configUpdates = sessionUpdates.filter(
+        (n) => n.update.sessionUpdate === "config_option_update",
+      );
+      expect(configUpdates).toHaveLength(0);
+    });
+  });
+
+  describe("bidirectional consistency", () => {
+    beforeEach(() => {
+      populateSession();
+    });
+
+    it("setSessionConfigOption for mode also calls underlying setPermissionMode", async () => {
+      await agent.setSessionConfigOption({
+        sessionId: SESSION_ID,
+        configId: "mode",
+        value: "acceptEdits",
+      });
+
+      expect(setPermissionModeSpy).toHaveBeenCalledWith("acceptEdits");
+    });
+
+    it("setSessionConfigOption for model also calls underlying setModel", async () => {
+      await agent.setSessionConfigOption({
+        sessionId: SESSION_ID,
+        configId: "model",
+        value: "claude-sonnet-4-5",
+      });
+
+      expect(setModelSpy).toHaveBeenCalledWith("claude-sonnet-4-5");
+    });
+
+    it("setSessionMode also syncs configOptions", async () => {
+      await agent.setSessionMode({ sessionId: SESSION_ID, modeId: "plan" });
+
+      const session = (
+        agent as unknown as {
+          sessions: Record<string, { configOptions: typeof MOCK_CONFIG_OPTIONS }>;
+        }
+      ).sessions[SESSION_ID];
+      expect(session.configOptions.find((o) => o.id === "mode")?.currentValue).toBe("plan");
+    });
+
+    it("setSessionModel also syncs configOptions", async () => {
+      await agent.unstable_setSessionModel({
+        sessionId: SESSION_ID,
+        modelId: "claude-sonnet-4-5",
+      });
+
+      const session = (
+        agent as unknown as {
+          sessions: Record<string, { configOptions: typeof MOCK_CONFIG_OPTIONS }>;
+        }
+      ).sessions[SESSION_ID];
+      expect(session.configOptions.find((o) => o.id === "model")?.currentValue).toBe(
+        "claude-sonnet-4-5",
+      );
+    });
+  });
+});
--- a/src/tests/settings.test.ts
+++ b/src/tests/settings.test.ts
@@ -0,0 +1,56 @@
+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("settings merging", () => {
+    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");
+    });
+  });
+});
--- a/src/tests/tools.test.ts
+++ b/src/tests/tools.test.ts
--- a/src/tools.ts
+++ b/src/tools.ts
@@ -1,10 +1,80 @@
 import {
+  ContentBlock,
  PlanEntry,
  ToolCallContent,
  ToolCallLocation,
  ToolKind,
-} from "@zed-industries/agent-client-protocol";
-import { replaceAndCalculateLocation, SYSTEM_REMINDER, toolNames } from "./mcp-server.js";
+} from "@agentclientprotocol/sdk";
+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";
+
+/**
+ * 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 {
+  AgentInput,
+  BashInput,
+  FileEditInput,
+  FileReadInput,
+  FileWriteInput,
+  GlobInput,
+  GrepInput,
+  TodoWriteInput,
+  WebFetchInput,
+  WebSearchInput,
+} from "@anthropic-ai/claude-agent-sdk/sdk-tools.js";

 interface ToolInfo {
  title: string;
@@ -17,22 +87,36 @@ interface ToolUpdate {
  title?: string;
  content?: ToolCallContent[];
  locations?: ToolCallLocation[];
+  _meta?: {
+    terminal_info?: {
+      terminal_id: string;
+    };
+    terminal_output?: {
+      terminal_id: string;
+      data: string;
+    };
+    terminal_exit?: {
+      terminal_id: string;
+      exit_code: number;
+      signal: string | null;
+    };
+  };
 }

 export function toolInfoFromToolUse(
  toolUse: any,
-  cachedFileContent: { [key: string]: string },
+  supportsTerminalOutput: boolean = false,
 ): ToolInfo {
  const name = toolUse.name;
-  const input = toolUse.input;

  switch (name) {
-    case "Task":
+    case "Task": {
+      const input = toolUse.input as AgentInput | BashInput;
      return {
        title: input?.description ? input.description : "Task",
        kind: "think",
        content:
-          input && input.prompt
+          input && "prompt" in input
            ? [
                {
                  type: "content",
@@ -41,38 +125,16 @@ export function toolInfoFromToolUse(
              ]
            : [],
      };
+    }

-    case "NotebookRead":
+    case "Bash": {
+      const input = toolUse.input as BashInput;
      return {
-        title: input?.notebook_path ? `Read Notebook ${input.notebook_path}` : "Read Notebook",
-        kind: "read",
-        content: [],
-        locations: input?.notebook_path ? [{ path: input.notebook_path }] : [],
-      };
-
-    case "NotebookEdit":
-      return {
-        title: input?.notebook_path ? `Edit Notebook ${input.notebook_path}` : "Edit Notebook",
-        kind: "edit",
-        content:
-          input && input.new_source
-            ? [
-                {
-                  type: "content",
-                  content: { type: "text", text: input.new_source },
-                },
-              ]
-            : [],
-        locations: input?.notebook_path ? [{ path: input.notebook_path }] : [],
-      };
-
-    case "Bash":
-    case toolNames.bash:
-      return {
-        title: input?.command ? "`" + input.command.replaceAll("`", "\\`") + "`" : "Terminal",
+        title: input?.command ? input.command : "Terminal",
        kind: "execute",
-        content:
-          input && input.description
+        content: supportsTerminalOutput
+          ? [{ type: "terminal" as const, terminalId: toolUse.id }]
+          : input && input.description
            ? [
                {
                  type: "content",
@@ -81,166 +143,39 @@ export function toolInfoFromToolUse(
              ]
            : [],
      };
+    }

-    case "BashOutput":
-    case toolNames.bashOutput:
-      return {
-        title: "Tail Logs",
-        kind: "execute",
-        content: [],
-      };
-
-    case "KillBash":
-    case toolNames.killBash:
-      return {
-        title: "Kill Process",
-        kind: "execute",
-        content: [],
-      };
-
-    case toolNames.read: {
+    case "Read": {
+      const input = toolUse.input as FileReadInput;
      let limit = "";
-      if (input.limit) {
-        limit =
-          " (" + ((input.offset ?? 0) + 1) + " - " + ((input.offset ?? 0) + input.limit) + ")";
+      if (input.limit && input.limit > 0) {
+        limit = " (" + (input.offset ?? 1) + " - " + ((input.offset ?? 1) + input.limit - 1) + ")";
      } else if (input.offset) {
-        limit = " (from line " + (input.offset + 1) + ")";
+        limit = " (from line " + input.offset + ")";
      }
      return {
-        title: "Read " + (input.abs_path ?? "File") + limit,
+        title: "Read " + (input.file_path ?? "File") + limit,
        kind: "read",
-        locations: [
-          {
-            path: input.abs_path,
-            line: input.offset ?? 0,
-          },
-        ],
-        content: [],
-      };
-    }
-
-    case "Read":
-      return {
-        title: "Read File",
-        kind: "read",
-        content: [],
-        locations: [{ path: input.file_path, line: input.offset ?? 0 }],
-      };
-
-    case "LS":
-      return {
-        title: `List the ${input?.path ? "`" + input.path + "`" : "current"} directory's contents`,
-        kind: "search",
-        content: [],
-        locations: [],
-      };
-
-    case toolNames.edit:
-    case "Edit": {
-      const path = input?.abs_path ?? input?.file_path;
-      let oldText = input.old_string ?? null;
-      let newText = input.new_string ?? "";
-      let affectedLines: number[] = [];
-
-      if (path && oldText) {
-        try {
-          const oldContent = cachedFileContent[path] || "";
-          const newContent = replaceAndCalculateLocation(oldContent, [
-            {
-              oldText,
-              newText,
-              replaceAll: false,
-            },
-          ]);
-          oldText = oldContent;
-          newText = newContent.newContent;
-          affectedLines = newContent.lineNumbers;
-        } catch (e) {
-          console.error(e);
-        }
-      }
-      return {
-        title: path ? `Edit \`${path}\`` : "Edit",
-        kind: "edit",
-        content:
-          input && path
-            ? [
-                {
-                  type: "diff",
-                  path,
-                  oldText,
-                  newText,
-                },
-              ]
-            : [],
-        locations: path
-          ? affectedLines.length > 0
-            ? affectedLines.map((line) => ({ line, path }))
-            : [{ path }]
+        locations: input.file_path
+          ? [
+              {
+                path: input.file_path,
+                line: input.offset ?? 1,
+              },
+            ]
          : [],
+        content: [],
      };
    }

-    case toolNames.multiEdit:
-    case "MultiEdit": {
-      const multiInput = input as {
-        file_path: string;
-        edits: {
-          old_string: string;
-          new_string: string;
-          replace_all?: boolean;
-        }[];
-      };
-      let oldTextMulti = multiInput.edits.map((edit: any) => edit.old_string).join("\n");
-      let newTextMulti = multiInput.edits.map((edit: any) => edit.new_string).join("\n");
-      let affectedLines: number[] = [];
-      try {
-        if (multiInput.edits && multiInput.file_path) {
-          const oldContent =
-            cachedFileContent[multiInput.file_path] ||
-            multiInput.edits.map((edit: any) => edit.oldText).join("\n");
-          const newContent = replaceAndCalculateLocation(
-            oldContent,
-            multiInput.edits.map((edit) => ({
-              oldText: edit.old_string,
-              newText: edit.new_string,
-              replaceAll: edit.replace_all,
-            })),
-          );
-          oldTextMulti = oldContent;
-          newTextMulti = newContent.newContent;
-          affectedLines = newContent.lineNumbers;
-        }
-      } catch (e) {
-        console.error(e);
-      }
-      // Display it as a normal edit, because end users don't care about
-      // the distinction between edits and multi-edits.
-      return {
-        title: input?.file_path ? `Edit ${input.file_path}` : "Edit",
-        kind: "edit",
-        content: [
-          {
-            type: "diff" as const,
-            path: input.file_path,
-            oldText: oldTextMulti,
-            newText: newTextMulti,
-          },
-        ],
-        locations: input?.file_path
-          ? affectedLines.length > 0
-            ? affectedLines.map((line) => ({ line, path: input.file_path }))
-            : [{ path: input.file_path }]
-          : [],
-      };
-    }
-    case toolNames.write: {
+    case "Write": {
+      const input = toolUse.input as FileWriteInput;
      let content: ToolCallContent[] = [];
-      if (input && input.abs_path) {
+      if (input && input.file_path) {
        content = [
          {
            type: "diff",
-            path: input.abs_path,
+            path: input.file_path,
            oldText: null,
            newText: input.content,
          },
@@ -254,32 +189,36 @@ export function toolInfoFromToolUse(
        ];
      }
      return {
-        title: input?.abs_path ? `Write ${input.abs_path}` : "Write",
+        title: input?.file_path ? `Write ${input.file_path}` : "Write",
        kind: "edit",
        content,
-        locations: input?.abs_path ? [{ path: input.abs_path }] : [],
+        locations: input?.file_path ? [{ path: input.file_path }] : [],
      };
    }

-    case "Write":
+    case "Edit": {
+      const input = toolUse.input as FileEditInput;
+      let content: ToolCallContent[] = [];
+      if (input && input.file_path && (input.old_string || input.new_string)) {
+        content = [
+          {
+            type: "diff",
+            path: input.file_path,
+            oldText: input.old_string || null,
+            newText: input.new_string ?? "",
+          },
+        ];
+      }
      return {
-        title: input?.file_path ? `Write ${input.file_path}` : "Write",
+        title: input?.file_path ? `Edit ${input.file_path}` : "Edit",
        kind: "edit",
-        content:
-          input && input.file_path
-            ? [
-                {
-                  type: "diff",
-                  path: input.file_path,
-                  oldText: null,
-                  newText: input.content,
-                },
-              ]
-            : [],
+        content,
        locations: input?.file_path ? [{ path: input.file_path }] : [],
      };
+    }

    case "Glob": {
+      const input = toolUse.input as GlobInput;
      let label = "Find";
      if (input.path) {
        label += ` \`${input.path}\``;
@@ -296,6 +235,7 @@ export function toolInfoFromToolUse(
    }

    case "Grep": {
+      const input = toolUse.input as GrepInput;
      let label = "grep";

      if (input["-i"]) {
@@ -317,13 +257,13 @@ export function toolInfoFromToolUse(

      if (input.output_mode) {
        switch (input.output_mode) {
-          case "FilesWithMatches":
+          case "files_with_matches":
            label += " -l";
            break;
-          case "Count":
+          case "count":
            label += " -c";
            break;
-          case "Content":
+          case "content":
          default:
            break;
        }
@@ -345,7 +285,9 @@ export function toolInfoFromToolUse(
        label += " -P";
      }

-      label += ` "${input.pattern}"`;
+      if (input.pattern) {
+        label += ` "${input.pattern}"`;
+      }

      if (input.path) {
        label += ` ${input.path}`;
@@ -358,7 +300,8 @@ export function toolInfoFromToolUse(
      };
    }

-    case "WebFetch":
+    case "WebFetch": {
+      const input = toolUse.input as WebFetchInput;
      return {
        title: input?.url ? `Fetch ${input.url}` : "Fetch",
        kind: "fetch",
@@ -372,8 +315,10 @@ export function toolInfoFromToolUse(
              ]
            : [],
      };
+    }

    case "WebSearch": {
+      const input = toolUse.input as WebSearchInput;
      let label = `"${input.query}"`;

      if (input.allowed_domains && input.allowed_domains.length > 0) {
@@ -391,26 +336,33 @@ export function toolInfoFromToolUse(
      };
    }

-    case "TodoWrite":
+    case "TodoWrite": {
+      const input = toolUse.input as TodoWriteInput;
      return {
-        title: input?.todos
+        title: Array.isArray(input?.todos)
          ? `Update TODOs: ${input.todos.map((todo: any) => todo.content).join(", ")}`
          : "Update TODOs",
        kind: "think",
        content: [],
      };
+    }

-    case "ExitPlanMode":
+    case "ExitPlanMode": {
      return {
        title: "Ready to code?",
        kind: "switch_mode",
-        content:
-          input && input.plan
-            ? [{ type: "content", content: { type: "text", text: input.plan } }]
-            : [],
+        content: [],
      };
+    }

-    case "Other":
+    case "Other": {
+      const input = toolUse.input;
+      let output;
+      try {
+        output = JSON.stringify(input, null, 2);
+      } catch {
+        output = typeof input === "string" ? input : "{}";
+      }
      return {
        title: name || "Unknown Tool",
        kind: "other",
@@ -419,11 +371,12 @@ export function toolInfoFromToolUse(
            type: "content",
            content: {
              type: "text",
-              text: `\`\`\`json\n${JSON.stringify(input, null, 2) || "{}"}\`\`\``,
+              text: `\`\`\`json\n${output}\`\`\``,
            },
          },
        ],
      };
+    }

    default:
      return {
@@ -434,20 +387,33 @@ export function toolInfoFromToolUse(
  }
 }

-type ToolResult = {
-  type: "tool_result";
-  content: any;
-  tool_use_id: string;
-  is_error: boolean;
-};
-
 export function toolUpdateFromToolResult(
-  toolResult: ToolResult,
+  toolResult:
+    | ToolResultBlockParam
+    | BetaToolResultBlockParam
+    | BetaWebSearchToolResultBlockParam
+    | BetaWebFetchToolResultBlockParam
+    | WebSearchToolResultBlockParam
+    | BetaCodeExecutionToolResultBlockParam
+    | BetaBashCodeExecutionToolResultBlockParam
+    | BetaTextEditorCodeExecutionToolResultBlockParam
+    | BetaRequestMCPToolResultBlockParam
+    | BetaToolSearchToolResultBlockParam,
  toolUse: any | undefined,
+  supportsTerminalOutput: boolean = false,
 ): 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:
      if (Array.isArray(toolResult.content) && toolResult.content.length > 0) {
        return {
          content: toolResult.content.map((content: any) => ({
@@ -456,9 +422,9 @@ export function toolUpdateFromToolResult(
              content.type === "text"
                ? {
                    type: "text",
-                    text: markdownEscape(content.text.replace(SYSTEM_REMINDER, "")),
+                    text: markdownEscape(content.text),
                  }
-                : content,
+                : toAcpContentBlock(content, false),
          })),
        };
      } else if (typeof toolResult.content === "string" && toolResult.content.length > 0) {
@@ -468,7 +434,7 @@ export function toolUpdateFromToolResult(
              type: "content",
              content: {
                type: "text",
-                text: markdownEscape(toolResult.content.replace(SYSTEM_REMINDER, "")),
+                text: markdownEscape(toolResult.content),
              },
            },
          ],
@@ -476,19 +442,76 @@ export function toolUpdateFromToolResult(
      }
      return {};

-    case toolNames.bash:
-    case "edit":
-    case "Edit":
-    case toolNames.edit:
-    case toolNames.multiEdit:
-    case "multi-edit":
-    case "MultiEdit":
-    case toolNames.write:
-    case "Write": {
-      if (toolResult.is_error && toolResult.content?.length > 0) {
-        // Only return errors
-        return toAcpContentUpdate(toolResult.content);
+    case "Bash": {
+      const result = toolResult.content;
+      const terminalId = "tool_use_id" in toolResult ? String(toolResult.tool_use_id) : "";
+      const isError = "is_error" in toolResult && toolResult.is_error;
+
+      // Extract output and exit code from either format:
+      // 1. BetaBashCodeExecutionResultBlock: { type: "bash_code_execution_result", stdout, stderr, return_code }
+      // 2. Plain string content from a regular tool_result
+      // 3. Array content (e.g. [{ type: "text", text: "..." }])
+      let output = "";
+      let exitCode = isError ? 1 : 0;
+
+      if (
+        result &&
+        typeof result === "object" &&
+        "type" in result &&
+        result.type === "bash_code_execution_result"
+      ) {
+        const bashResult = result as BetaBashCodeExecutionResultBlock;
+        output = bashResult.stdout || bashResult.stderr || "";
+        exitCode = bashResult.return_code;
+      } else if (typeof result === "string") {
+        output = result;
+      } else if (
+        Array.isArray(result) &&
+        result.length > 0 &&
+        "text" in result[0] &&
+        typeof result[0].text === "string"
+      ) {
+        output = result.map((c: any) => c.text).join("\n");
      }
+
+      if (supportsTerminalOutput) {
+        return {
+          content: [{ type: "terminal" as const, terminalId }],
+          _meta: {
+            terminal_info: {
+              terminal_id: terminalId,
+            },
+            terminal_output: {
+              terminal_id: terminalId,
+              data: output,
+            },
+            terminal_exit: {
+              terminal_id: terminalId,
+              exit_code: exitCode,
+              signal: null,
+            },
+          },
+        };
+      }
+      // Fallback: format output as a code block without terminal _meta
+      if (output.trim()) {
+        return {
+          content: [
+            {
+              type: "content",
+              content: {
+                type: "text",
+                text: `\`\`\`console\n${output.trimEnd()}\n\`\`\``,
+              },
+            },
+          ],
+        };
+      }
+      return {};
+    }
+
+    case "Edit": // Edit is handled in hooks
+    case "Write": {
      return {};
    }

@@ -496,34 +519,35 @@ export function toolUpdateFromToolResult(
      return { title: "Exited Plan Mode" };
    }

-    case "Task":
-    case "NotebookEdit":
-    case "NotebookRead":
-    case "TodoWrite":
-    case "exit_plan_mode":
-    case "Bash":
-    case "BashOutput":
-    case "KillBash":
-    case "LS":
-    case "Glob":
-    case "Grep":
-    case "WebFetch":
-    case "WebSearch":
-    case "Other":
    default: {
-      return toAcpContentUpdate(toolResult.content);
+      return toAcpContentUpdate(
+        toolResult.content,
+        "is_error" in toolResult ? toolResult.is_error : false,
+      );
    }
  }
 }

-function toAcpContentUpdate(content: any): { content?: ToolCallContent[] } {
+function toAcpContentUpdate(
+  content: any,
+  isError: boolean = false,
+): { content?: ToolCallContent[] } {
  if (Array.isArray(content) && content.length > 0) {
    return {
-      content: content.map((content: any) => ({
-        type: "content",
-        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: [
@@ -531,7 +555,7 @@ function toAcpContentUpdate(content: any): { content?: ToolCallContent[] } {
          type: "content",
          content: {
            type: "text",
-            text: content,
+            text: isError ? `\`\`\`\n${content}\n\`\`\`` : content,
          },
        },
      ],
@@ -540,7 +564,75 @@ function toAcpContentUpdate(content: any): { content?: ToolCallContent[] } {
  return {};
 }

-type ClaudePlanEntry = {
+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";
  activeForm: string;
@@ -563,3 +655,121 @@ export function markdownEscape(text: string): string {
  }
  return escape + "\n" + text + (text.endsWith("\n") ? "" : "\n") + escape;
 }
+
+interface EditToolResponseHunk {
+  oldStart: number;
+  oldLines: number;
+  newStart: number;
+  newLines: number;
+  lines: string[];
+}
+
+interface EditToolResponse {
+  filePath?: string;
+  structuredPatch?: EditToolResponseHunk[];
+}
+
+/**
+ * Builds diff ToolUpdate content from the structured Edit toolResponse provided
+ * by the PostToolUse hook. Unlike parsing the plain unified diff string, this uses
+ * the pre-parsed structuredPatch which supports multiple replacement sites (replaceAll)
+ * and always includes context lines for better readability.
+ */
+export function toolUpdateFromEditToolResponse(toolResponse: unknown): {
+  content?: ToolCallContent[];
+  locations?: ToolCallLocation[];
+} {
+  if (!toolResponse || typeof toolResponse !== "object") return {};
+  const response = toolResponse as EditToolResponse;
+  if (!response.filePath || !Array.isArray(response.structuredPatch)) return {};
+
+  const content: ToolCallContent[] = [];
+  const locations: ToolCallLocation[] = [];
+
+  for (const { lines, newStart } of response.structuredPatch) {
+    const oldText: string[] = [];
+    const newText: string[] = [];
+    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: response.filePath, line: newStart });
+      content.push({
+        type: "diff",
+        path: response.filePath,
+        oldText: oldText.join("\n") || null,
+        newText: newText.join("\n"),
+      });
+    }
+  }
+
+  const result: { content?: ToolCallContent[]; locations?: ToolCallLocation[] } = {};
+  if (content.length > 0) result.content = content;
+  if (locations.length > 0) result.locations = locations;
+  return result;
+}
+
+/* A global variable to store callbacks that should be executed when receiving hooks from Claude Code */
+const toolUseCallbacks: {
+  [toolUseId: string]: {
+    onPostToolUseHook?: (
+      toolUseID: string,
+      toolInput: unknown,
+      toolResponse: unknown,
+    ) => Promise<void>;
+  };
+} = {};
+
+/* Setup callbacks that will be called when receiving hooks from Claude Code */
+export const registerHookCallback = (
+  toolUseID: string,
+  {
+    onPostToolUseHook,
+  }: {
+    onPostToolUseHook?: (
+      toolUseID: string,
+      toolInput: unknown,
+      toolResponse: unknown,
+    ) => Promise<void>;
+  },
+) => {
+  toolUseCallbacks[toolUseID] = {
+    onPostToolUseHook,
+  };
+};
+
+/* A callback for Claude Code that is called when receiving a PostToolUse hook */
+export const createPostToolUseHook =
+  (
+    logger: Logger = console,
+    options?: {
+      onEnterPlanMode?: () => Promise<void>;
+    },
+  ): HookCallback =>
+  async (input: any, toolUseID: string | undefined): Promise<{ continue: boolean }> => {
+    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 };
+  };
--- a/src/utils.ts
+++ b/src/utils.ts
@@ -3,7 +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> {
@@ -75,47 +76,29 @@ export function nodeToWebReadable(nodeStream: Readable): ReadableStream<Uint8Arr
  });
 }

-export function unreachable(value: never): never {
-  throw new Error(`Unexpected case: ${value}`);
+export function unreachable(value: never, logger: Logger = console) {
+  let valueAsString;
+  try {
+    valueAsString = JSON.stringify(value);
+  } catch {
+    valueAsString = value;
+  }
+  logger.error(`Unexpected case: ${valueAsString}`);
 }

 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;
--- a/tsconfig.json
+++ b/tsconfig.json
@@ -1,15 +1,17 @@
 {
  "compilerOptions": {
-    "target": "ES2020",
+    "target": "ES2021",
    "module": "NodeNext",
    "moduleResolution": "NodeNext",
-    "lib": ["ES2020"],
+    "lib": ["ES2021"],
    "strict": true,
    "esModuleInterop": true,
    "forceConsistentCasingInFileNames": true,
    "skipLibCheck": true,
    "outDir": "dist",
-    "rootDir": "src"
+    "rootDir": "src",
+    "declaration": true,
+    "declarationMap": true
  },
  "include": ["src/**/*.ts"],
  "exclude": ["node_modules", "dist"]