Claude Code SDK 1.0.123 (#65)

- **Bump to claude code sdk v1.0.123**
- **Prep release**

---------

Signed-off-by: Ben Brandt <benjamin.j.brandt@gmail.com>

.eslintignore

@@ -1,6 +0,0 @@
-node_modules/
-dist/
-coverage/
-*.min.js
-*.config.js
-.github/

.eslintrc.json

@@ -1,33 +0,0 @@
-{
-  "root": true,
-  "parser": "@typescript-eslint/parser",
-  "parserOptions": {
-    "ecmaVersion": 2020,
-    "sourceType": "module",
-    "project": "./tsconfig.json"
-  },
-  "plugins": ["@typescript-eslint"],
-  "extends": ["eslint:recommended", "plugin:@typescript-eslint/recommended", "prettier"],
-  "env": {
-    "node": true,
-    "es2020": true
-  },
-  "rules": {
-    "@typescript-eslint/explicit-function-return-type": "off",
-    "@typescript-eslint/no-explicit-any": "off",
-    "@typescript-eslint/no-unused-vars": [
-      "error",
-      {
-        "argsIgnorePattern": "^_"
-      }
-    ],
-    "no-console": "off",
-    "no-constant-condition": "off",
-    "default-case": "error",
-    "prefer-const": "error",
-    "no-var": "error",
-    "eqeqeq": ["error", "always"],
-    "curly": ["error", "all"]
-  },
-  "ignorePatterns": ["dist", "node_modules", "*.js"]
-}

.github/workflows/publish.yml

@@ -6,6 +6,7 @@ on:
 jobs:
   build:
     runs-on: ubuntu-latest
+    environment: release # Optional: for enhanced security
     permissions:
       contents: read
       id-token: write
@@ -16,8 +17,8 @@ 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

CHANGELOG.md

@@ -0,0 +1,25 @@
+# Changelog
+
+## 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

README.md

@@ -33,6 +33,7 @@ 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)
+- [marimo notebook](https://github.com/marimo-team/marimo)
 
 [Submit a PR](https://github.com/zed-industries/claude-code-acp/pulls) to add yours!
 

eslint.config.js

@@ -0,0 +1,48 @@
+import js from "@eslint/js";
+import tseslint from "@typescript-eslint/eslint-plugin";
+import tsparser from "@typescript-eslint/parser";
+import prettierConfig from "eslint-config-prettier";
+import globals from "globals";
+
+export default [
+  {
+    ignores: ["node_modules/", "dist/", "coverage/", "*.min.js", "*.config.js", ".github/"],
+  },
+  js.configs.recommended,
+  {
+    files: ["src/**/*.ts"],
+    languageOptions: {
+      ecmaVersion: 2020,
+      sourceType: "module",
+      parser: tsparser,
+      parserOptions: {
+        project: "./tsconfig.json",
+      },
+      globals: {
+        ...globals.node,
+      },
+    },
+    plugins: {
+      "@typescript-eslint": tseslint,
+    },
+    rules: {
+      ...tseslint.configs.recommended.rules,
+      "@typescript-eslint/explicit-function-return-type": "off",
+      "@typescript-eslint/no-explicit-any": "off",
+      "@typescript-eslint/no-unused-vars": [
+        "error",
+        {
+          argsIgnorePattern: "^_",
+        },
+      ],
+      "no-console": "off",
+      "no-constant-condition": "off",
+      "default-case": "error",
+      "prefer-const": "error",
+      "no-var": "error",
+      eqeqeq: ["error", "always"],
+      curly: ["error", "all"],
+    },
+  },
+  prettierConfig,
+];

package.json

@@ -6,7 +6,7 @@
   "bin": {
     "claude-code-acp": "./dist/index.js"
   },
-  "version": "0.4.0",
+  "version": "0.4.4",
   "description": "An ACP-compatible coding agent powered by the Claude Code SDK (TypeScript)",
   "main": "dist/index.js",
   "type": "module",
@@ -40,30 +40,39 @@
     "sdk",
     "code"
   ],
+  "homepage": "https://github.com/zed-industries/claude-code-acp#readme",
+  "bugs": {
+    "url": "https://github.com/zed-industries/claude-code-acp/issues"
+  },
+  "repository": {
+    "type": "git",
+    "url": "git+https://github.com/zed-industries/claude-code-acp.git"
+  },
   "author": "Zed Industries",
   "license": "Apache-2.0",
   "dependencies": {
-    "@anthropic-ai/claude-code": "^1.0.100",
-    "@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"
+    "@anthropic-ai/claude-code": "1.0.123",
+    "@modelcontextprotocol/sdk": "1.18.1",
+    "@zed-industries/agent-client-protocol": "0.4.2",
+    "diff": "8.0.2",
+    "express": "5.1.0",
+    "minimist": "1.2.8",
+    "uuid": "13.0.0"
   },
   "devDependencies": {
-    "@types/express": "^5.0.3",
-    "@types/minimist": "^1.2.5",
-    "@types/node": "^24.3.0",
-    "@types/uuid": "^10.0.0",
-    "@typescript-eslint/eslint-plugin": "^8.42.0",
-    "@typescript-eslint/parser": "^8.42.0",
-    "@vitest/ui": "^3.2.4",
-    "eslint": "^8.57.0",
-    "eslint-config-prettier": "^9.1.0",
-    "prettier": "^3.6.2",
-    "ts-node": "^10.9.2",
-    "typescript": "^5.4.0",
-    "vitest": "^3.2.4"
+    "@types/express": "5.0.3",
+    "@types/minimist": "1.2.5",
+    "@types/node": "24.5.2",
+    "@types/uuid": "10.0.0",
+    "@typescript-eslint/eslint-plugin": "8.44.1",
+    "@typescript-eslint/parser": "8.44.1",
+    "@vitest/ui": "3.2.4",
+    "eslint": "9.36.0",
+    "eslint-config-prettier": "10.1.8",
+    "globals": "16.4.0",
+    "prettier": "3.6.2",
+    "ts-node": "10.9.2",
+    "typescript": "5.9.2",
+    "vitest": "3.2.4"
   }
 }

src/acp-agent.ts

@@ -7,6 +7,7 @@ import {
   ClientCapabilities,
   InitializeRequest,
   InitializeResponse,
+  ndJsonStream,
   NewSessionRequest,
   NewSessionResponse,
   PromptRequest,
@@ -36,7 +37,12 @@ import * as os from "node:os";
 import { v7 as uuidv7 } from "uuid";
 import { nodeToWebReadable, nodeToWebWritable, Pushable, unreachable } from "./utils.js";
 import { SessionNotification } from "@zed-industries/agent-client-protocol";
-import { createMcpServer, toolNames } from "./mcp-server.js";
+import {
+  createMcpServer,
+  createPermissionMcpServer,
+  PERMISSION_TOOL_NAME,
+  toolNames,
+} from "./mcp-server.js";
 import { AddressInfo } from "node:net";
 import { toolInfoFromToolUse, planEntries, toolUpdateFromToolResult } from "./tools.js";
 
@@ -139,9 +145,17 @@ export class ClaudeAcpAgent implements Agent {
       }
     }
 
-    const server = await createMcpServer(this, sessionId, this.clientCapabilities);
-    const address = server.address() as AddressInfo;
+    const server = createMcpServer(this, sessionId, this.clientCapabilities);
     mcpServers["acp"] = {
+      type: "sdk",
+      name: "acp",
+      instance: server,
+    };
+
+    // Ideally replace with `canUseTool`
+    const permissionServer = await createPermissionMcpServer(this, sessionId);
+    const address = permissionServer.address() as AddressInfo;
+    mcpServers["acpPermission"] = {
       type: "http",
       url: "http://127.0.0.1:" + address.port + "/mcp",
       headers: {
@@ -152,7 +166,7 @@ export class ClaudeAcpAgent implements Agent {
     const options: Options = {
       cwd: params.cwd,
       mcpServers,
-      permissionPromptToolName: toolNames.permission,
+      permissionPromptToolName: PERMISSION_TOOL_NAME,
       stderr: (err) => console.error(err),
       // note: although not documented by the types, passing an absolute path
       // here works to find zed's managed node version.
@@ -284,6 +298,24 @@ export class ClaudeAcpAgent implements Agent {
             continue;
           }
 
+          // Slash commands like /compact can generate invalid output... doesn't match
+          // their own docs: https://docs.anthropic.com/en/docs/claude-code/sdk/sdk-slash-commands#%2Fcompact-compact-conversation-history
+          if (
+            typeof message.message.content === "string" &&
+            message.message.content.includes("<local-command-stdout>")
+          ) {
+            console.log(message.message.content);
+            break;
+          }
+
+          if (
+            typeof message.message.content === "string" &&
+            message.message.content.includes("<local-command-stderr>")
+          ) {
+            console.error(message.message.content);
+            break;
+          }
+
           if (
             message.message.model === "<synthetic>" &&
             message.message.content.length === 1 &&
@@ -302,7 +334,7 @@ export class ClaudeAcpAgent implements Agent {
           break;
         }
         default:
-          unreachable(message);
+          unreachable(message as never);
       }
     }
     throw new Error("Session did not end in result");
@@ -361,7 +393,6 @@ async function getAvailableSlashCommands(query: Query): Promise<AvailableCommand
     "bashes", // Modal
     "bug", // Modal
     "clear", // Escape Codes
-    "compact", // Not supported via SDK?
     "config", // Modal
     "context", // Escape Codes
     "cost", // Escape Codes
@@ -390,11 +421,10 @@ async function getAvailableSlashCommands(query: Query): Promise<AvailableCommand
     "todos", // Escape Codes
     "vim", // Not needed
   ];
-  //todo: Do not use `as any` once `supportedCommands` is exposed via the typescript interface
-  const commands = await (query as any).supportedCommands();
+  const commands = await query.supportedCommands();
 
   return commands
-    .map((command: { name: string; description: string; argumentHint: string }) => {
+    .map((command) => {
       const input = command.argumentHint ? { hint: command.argumentHint } : null;
       return {
         name: command.name,
@@ -591,11 +621,11 @@ export function toAcpNotifications(
 }
 
 export function runAcp() {
-  new AgentSideConnection(
-    (client) => new ClaudeAcpAgent(client),
-    nodeToWebWritable(process.stdout),
-    nodeToWebReadable(process.stdin),
-  );
+  const input = nodeToWebWritable(process.stdout);
+  const output = nodeToWebReadable(process.stdin);
+
+  const stream = ndJsonStream(input, output);
+  new AgentSideConnection((client) => new ClaudeAcpAgent(client), stream);
 }
 
 type ContentChunk =

src/index.ts

@@ -1,5 +1,13 @@
 #!/usr/bin/env node
 
+// Load managed settings and apply environment variables
+import { loadManagedSettings, applyEnvironmentSettings } from "./utils.js";
+
+const managedSettings = loadManagedSettings();
+if (managedSettings) {
+  applyEnvironmentSettings(managedSettings);
+}
+
 // stdout is used to send messages to the client
 // we redirect everything else to stderr to make sure it doesn't interfere with ACP
 console.log = console.error;

src/mcp-server.ts

@@ -8,7 +8,7 @@ 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 { sleep, unreachable, extractLinesWithByteLimit } from "./utils.js";
 import { PermissionResult } from "@anthropic-ai/claude-code";
 
 export const SYSTEM_REMINDER = `
@@ -17,6 +17,8 @@ export const 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 defaults = { maxFileSize: 50000, linesToRead: 1000 };
+
 const unqualifiedToolNames = {
   read: "read",
   edit: "edit",
@@ -25,7 +27,6 @@ const unqualifiedToolNames = {
   bash: "Bash",
   killBash: "KillBash",
   bashOutput: "BashOutput",
-  permission: "permission",
 };
 
 const SERVER_PREFIX = "mcp__acp__";
@@ -37,7 +38,6 @@ export const toolNames = {
   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];
@@ -46,12 +46,9 @@ export function createMcpServer(
   agent: ClaudeAcpAgent,
   sessionId: string,
   clientCapabilities: ClientCapabilities | undefined,
-): Promise<Server> {
+): McpServer {
   // Create MCP server
-  const server = new McpServer({
-    name: "acp-mcp-server",
-    version: "1.0.0",
-  });
+  const server = new McpServer({ name: "acp", version: "1.0.0" }, { capabilities: { tools: {} } });
 
   if (clientCapabilities?.fs?.readTextFile) {
     server.registerTool(
@@ -68,8 +65,17 @@ In sessions with ${toolNames.read} always use it instead of Read as it contains
           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."),
+            .default(0)
+            .describe(
+              "Which line to start reading from (0-based). Omit to start from the beginning.",
+            ),
+          linesToRead: z
+            .number()
+            .optional()
+            .default(defaults.linesToRead)
+            .describe(
+              `How many lines to read. Omit for ${defaults.linesToRead}. (Reading files that are too large can fill up the context window unnecessarily, so be thoughtful about how much you read at a time.)`,
+            ),
         },
         annotations: {
           title: "Read file",
@@ -92,18 +98,43 @@ In sessions with ${toolNames.read} always use it instead of Read as it contains
               ],
             };
           }
+
           const content = await agent.readTextFile({
             sessionId,
             path: input.abs_path,
-            limit: input.limit,
-            line: input.offset,
           });
 
+          // Extract lines with byte limit enforcement
+          const result = extractLinesWithByteLimit(
+            content.content,
+            input.offset ?? 0,
+            input.linesToRead,
+            defaults.maxFileSize,
+          );
+
+          // Construct informative message about what was read
+          let readInfo = "";
+          if (input.offset > 0 || result.wasLimited) {
+            readInfo = "\n\n<file-read-info>";
+
+            if (result.wasLimited) {
+              readInfo += `Read ${result.linesRead} lines (hit 50KB limit). `;
+            } else {
+              readInfo += `Read lines ${(input.offset ?? 0) + 1}-${result.actualEndLine}. `;
+            }
+
+            if (result.wasLimited) {
+              readInfo += `Continue with offset=${result.actualEndLine}.`;
+            }
+
+            readInfo += "</file-read-info>";
+          }
+
           return {
             content: [
               {
                 type: "text",
-                text: content.content + SYSTEM_REMINDER,
+                text: result.content + readInfo + SYSTEM_REMINDER,
               },
             ],
           };
@@ -589,9 +620,30 @@ File editing instructions:
     );
   }
 
+  return server;
+}
+
+const UNQUALIFIED_PERMISSION_TOOL_NAME = "permission";
+const PERMISSION_SERVER_PREFIX = "mcp__acpPermission__";
+export const PERMISSION_TOOL_NAME = PERMISSION_SERVER_PREFIX + UNQUALIFIED_PERMISSION_TOOL_NAME;
+
+/**
+ * Separate permission tool. Needs to be an HTTP server for now, because Claude Code doesn't
+ * support permission tools via SDK servers.
+ * Ideally it moves to the `canUseTool` callback in the future.
+ */
+export function createPermissionMcpServer(
+  agent: ClaudeAcpAgent,
+  sessionId: string,
+): Promise<Server> {
+  const server = new McpServer(
+    { name: "acpPermission", version: "1.0.0" },
+    { capabilities: { tools: {} } },
+  );
+
   const alwaysAllowedTools: { [key: string]: boolean } = {};
   server.registerTool(
-    unqualifiedToolNames.permission,
+    UNQUALIFIED_PERMISSION_TOOL_NAME,
     {
       title: "Permission Tool",
       description: "Used to request tool permissions",

src/tests/acp-agent.test.ts

@@ -5,6 +5,7 @@ import {
   AvailableCommand,
   Client,
   ClientSideConnection,
+  ndJsonStream,
   NewSessionResponse,
   ReadTextFileRequest,
   ReadTextFileResponse,
@@ -91,7 +92,7 @@ describe.skipIf(!process.env.RUN_INTEGRATION_TESTS)("ACP subprocess integration"
 
     async writeTextFile(params: WriteTextFileRequest): Promise<WriteTextFileResponse> {
       this.files.set(params.path, params.content);
-      return null;
+      return {};
     }
 
     async readTextFile(params: ReadTextFileRequest): Promise<ReadTextFileResponse> {
@@ -108,14 +109,13 @@ describe.skipIf(!process.env.RUN_INTEGRATION_TESTS)("ACP subprocess integration"
     newSessionResponse: NewSessionResponse;
   }> {
     let client;
-    const connection = new ClientSideConnection(
-      (agent) => {
-        client = new TestClient(agent);
-        return client;
-      },
-      nodeToWebWritable(child.stdin!),
-      nodeToWebReadable(child.stdout!),
-    );
+    const input = nodeToWebWritable(child.stdin!);
+    const output = nodeToWebReadable(child.stdout!);
+    const stream = ndJsonStream(input, output);
+    const connection = new ClientSideConnection((agent) => {
+      client = new TestClient(agent);
+      return client;
+    }, stream);
 
     await connection.initialize({
       protocolVersion: 1,
@@ -191,6 +191,50 @@ describe.skipIf(!process.env.RUN_INTEGRATION_TESTS)("ACP subprocess integration"
 
     expect(client.takeReceivedText()).toContain("Hello GPT-5");
   }, 30000);
+
+  it("/compact works", async () => {
+    const { client, connection, newSessionResponse } = await setupTestSession(__dirname);
+
+    const commands = await client.availableCommandsPromise;
+
+    expect(commands).toContainEqual({
+      description:
+        "Clear conversation history but keep a summary in context. Optional: /compact [instructions for summarization]",
+      input: {
+        hint: "<optional custom summarization instructions>",
+      },
+      name: "compact",
+    });
+
+    // Error case (no previous message)
+    await connection.prompt({
+      prompt: [{ type: "text", text: "/compact" }],
+      sessionId: newSessionResponse.sessionId,
+    });
+
+    expect(client.takeReceivedText()).toBe("");
+
+    // Send something
+    await connection.prompt({
+      prompt: [{ type: "text", text: "Hi" }],
+      sessionId: newSessionResponse.sessionId,
+    });
+    // Clear response
+    client.takeReceivedText();
+
+    // Test with instruction
+    await connection.prompt({
+      prompt: [
+        {
+          type: "text",
+          text: "/compact greeting",
+        },
+      ],
+      sessionId: newSessionResponse.sessionId,
+    });
+
+    expect(client.takeReceivedText()).toContain("");
+  }, 30000);
 });
 
 describe("tool conversions", () => {
@@ -778,7 +822,10 @@ describe("tool conversions", () => {
     // Should return empty object when parsing fails
     expect(update).toEqual({
       content: [
-        { content: { type: "text", text: "Failed to find `old_string`" }, type: "content" },
+        {
+          content: { type: "text", text: "```\nFailed to find `old_string`\n```" },
+          type: "content",
+        },
       ],
     });
   });

src/tests/extract-lines.test.ts

@@ -0,0 +1,174 @@
+import { describe, it, expect } from "vitest";
+import { extractLinesWithByteLimit } from "../utils.js";
+
+describe("extractLinesWithByteLimit", () => {
+  const simpleContent = "Line 1\nLine 2\nLine 3\nLine 4\nLine 5";
+
+  it("should extract all lines when under byte limit", () => {
+    const result = extractLinesWithByteLimit(simpleContent, 0, 5, 1000);
+
+    expect(result.content).toBe(simpleContent);
+    expect(result.actualEndLine).toBe(4);
+    expect(result.wasLimited).toBe(false);
+    expect(result.linesRead).toBe(5);
+  });
+
+  it("should extract partial lines with offset", () => {
+    const result = extractLinesWithByteLimit(simpleContent, 2, 2, 1000);
+
+    expect(result.content).toBe("Line 3\nLine 4");
+    expect(result.actualEndLine).toBe(3);
+    expect(result.wasLimited).toBe(false);
+    expect(result.linesRead).toBe(2);
+  });
+
+  it("should limit output when exceeding byte limit", () => {
+    // Create content that will exceed byte limit
+    const longLine = "x".repeat(100);
+    const manyLines = Array(10).fill(longLine).join("\n");
+
+    const result = extractLinesWithByteLimit(manyLines, 0, 10, 250);
+
+    expect(result.wasLimited).toBe(true);
+    expect(result.actualEndLine).toBe(1); // Should only get 2 lines
+    expect(result.linesRead).toBe(2);
+  });
+
+  it("should handle offset beyond file length", () => {
+    const result = extractLinesWithByteLimit(simpleContent, 10, 5, 1000);
+
+    expect(result.content).toBe("");
+    expect(result.actualEndLine).toBe(10);
+    expect(result.wasLimited).toBe(false);
+    expect(result.linesRead).toBe(0);
+  });
+
+  it("should handle empty content", () => {
+    const result = extractLinesWithByteLimit("", 0, 10, 1000);
+
+    expect(result.content).toBe("");
+    expect(result.actualEndLine).toBe(0); // Empty string splits to [""] and we process that one empty line
+    expect(result.wasLimited).toBe(false);
+    expect(result.linesRead).toBe(1); // We read the one empty line
+  });
+
+  it("should handle single line file", () => {
+    const singleLine = "This is a single line without newline";
+    const result = extractLinesWithByteLimit(singleLine, 0, 10, 1000);
+
+    expect(result.content).toBe(singleLine);
+    expect(result.actualEndLine).toBe(0);
+    expect(result.wasLimited).toBe(false);
+    expect(result.linesRead).toBe(1);
+  });
+
+  it("should correctly count bytes with multi-byte characters", () => {
+    const unicodeContent = "Hello 世界\n你好 World\nEmoji: 🌍\nNormal line";
+    const result = extractLinesWithByteLimit(unicodeContent, 0, 10, 1000);
+
+    expect(result.content).toBe(unicodeContent);
+    expect(result.linesRead).toBe(4);
+  });
+
+  it("should stop at byte limit even with one more line available", () => {
+    // Create lines where adding one more would exceed limit
+    const line1 = "a".repeat(40);
+    const line2 = "b".repeat(40);
+    const line3 = "c".repeat(40);
+    const content = `${line1}\n${line2}\n${line3}`;
+
+    const result = extractLinesWithByteLimit(content, 0, 3, 85);
+
+    expect(result.content).toBe(`${line1}\n${line2}`);
+    expect(result.actualEndLine).toBe(1);
+    expect(result.wasLimited).toBe(true);
+    expect(result.linesRead).toBe(2);
+  });
+
+  it("should read exactly to limit when possible", () => {
+    const exactContent = "12345\n67890\n12345"; // 17 bytes total
+    const result = extractLinesWithByteLimit(exactContent, 0, 3, 17);
+
+    expect(result.content).toBe(exactContent);
+    expect(result.actualEndLine).toBe(2);
+    expect(result.wasLimited).toBe(false);
+    expect(result.linesRead).toBe(3);
+  });
+
+  it("should handle reading from middle to end", () => {
+    const result = extractLinesWithByteLimit(simpleContent, 3, 100, 1000);
+
+    expect(result.content).toBe("Line 4\nLine 5");
+    expect(result.actualEndLine).toBe(4);
+    expect(result.wasLimited).toBe(false);
+    expect(result.linesRead).toBe(2);
+  });
+
+  it("should handle large content with typical parameters", () => {
+    const longContent = Array(2000).fill("Line content here").join("\n");
+    const result = extractLinesWithByteLimit(longContent, 0, 1000, 50000);
+
+    expect(result.actualEndLine).toBeLessThanOrEqual(1000); // Should be limited by line count
+  });
+
+  it("should provide correct data for partial read at start", () => {
+    const result = extractLinesWithByteLimit(simpleContent, 0, 2, 1000);
+
+    expect(result.actualEndLine).toBe(1);
+    expect(result.linesRead).toBe(2);
+  });
+
+  it("should provide correct data for partial read with offset", () => {
+    const result = extractLinesWithByteLimit(simpleContent, 1, 2, 1000);
+
+    expect(result.actualEndLine).toBe(2);
+    expect(result.linesRead).toBe(2);
+  });
+
+  it("should not add newline after last line", () => {
+    const result = extractLinesWithByteLimit("Line 1\nLine 2\nLine 3", 2, 1, 1000);
+
+    expect(result.content).toBe("Line 3"); // No trailing newline
+  });
+
+  it("should handle Windows-style line endings", () => {
+    const windowsContent = "Line 1\r\nLine 2\r\nLine 3";
+    const result = extractLinesWithByteLimit(windowsContent, 0, 3, 1000);
+
+    // Note: split("\n") will keep the \r characters
+    expect(result.content).toBe("Line 1\r\nLine 2\r\nLine 3");
+    expect(result.linesRead).toBe(3);
+  });
+
+  it("should handle very large files efficiently", () => {
+    // Create a 100KB file
+    const largeLine = "x".repeat(1000);
+    const largeContent = Array(110).fill(largeLine).join("\n");
+
+    const result = extractLinesWithByteLimit(largeContent, 0, 200, 50000);
+
+    expect(result.wasLimited).toBe(true);
+    expect(result.actualEndLine).toBeLessThan(50); // Should stop well before 200 lines
+  });
+
+  it("should handle line limit of 0", () => {
+    const result = extractLinesWithByteLimit(simpleContent, 0, 0, 1000);
+
+    expect(result.content).toBe("");
+    expect(result.actualEndLine).toBe(0);
+    expect(result.linesRead).toBe(0);
+    expect(result.wasLimited).toBe(false);
+  });
+
+  it("should allow at least one line even if it exceeds byte limit", () => {
+    const veryLongLine = "x".repeat(100000); // 100KB line
+    const result = extractLinesWithByteLimit(veryLongLine, 0, 1, 50000);
+
+    // Should return the line even though it exceeds the byte limit
+    // because we always allow at least one line if no lines have been added yet
+    expect(result.content).toBe(veryLongLine);
+    expect(result.actualEndLine).toBe(0);
+    expect(result.linesRead).toBe(1);
+    expect(result.wasLimited).toBe(false);
+  });
+});

src/tools.ts

@@ -487,7 +487,7 @@ export function toolUpdateFromToolResult(
     case "Write": {
       if (toolResult.is_error && toolResult.content?.length > 0) {
         // Only return errors
-        return toAcpContentUpdate(toolResult.content);
+        return toAcpContentUpdate(toolResult.content, true);
       }
       return {};
     }
@@ -511,17 +511,26 @@ export function toolUpdateFromToolResult(
     case "WebSearch":
     case "Other":
     default: {
-      return toAcpContentUpdate(toolResult.content);
+      return toAcpContentUpdate(toolResult.content, toolResult.is_error);
     }
   }
 }
 
-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:
+          isError && content.type === "text"
+            ? {
+                ...content,
+                text: `\`\`\`\n${content.text}\n\`\`\``,
+              }
+            : content,
       })),
     };
   } else if (typeof content === "string" && content.length > 0) {
@@ -531,7 +540,7 @@ function toAcpContentUpdate(content: any): { content?: ToolCallContent[] } {
           type: "content",
           content: {
             type: "text",
-            text: content,
+            text: isError ? `\`\`\`\n${content}\n\`\`\`` : content,
           },
         },
       ],

src/utils.ts

@@ -2,6 +2,8 @@
 
 import { Readable, Writable } from "node:stream";
 import { WritableStream, ReadableStream } from "node:stream/web";
+import { readFileSync } from "node:fs";
+import { platform } from "node:os";
 
 // Useful for bridging push-based and async-iterator-based code.
 export class Pushable<T> implements AsyncIterable<T> {
@@ -80,3 +82,153 @@ export function unreachable(value: never): never {
 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 {
+  try {
+    return JSON.parse(readFileSync(getManagedSettingsPath(), "utf8")) as ManagedSettings;
+  } catch {
+    return null;
+  }
+}
+
+export function applyEnvironmentSettings(settings: ManagedSettings): void {
+  if (settings.env) {
+    for (const [key, value] of Object.entries(settings.env)) {
+      process.env[key] = value;
+    }
+  }
+}
+
+export interface ExtractLinesResult {
+  content: string;
+  actualEndLine: number;
+  wasLimited: boolean;
+  linesRead: number;
+}
+
+/**
+ * Extracts lines from file content with byte limit enforcement.
+ *
+ * @param fullContent - The complete file content
+ * @param linesToSkip - Starting line number (0-based)
+ * @param linesToRead - Maximum number of lines to read
+ * @param maxContentLength - Maximum number of UTF-16 Code Units to return
+ * @returns Object containing extracted content and metadata
+ */
+export function extractLinesWithByteLimit(
+  fullContent: string,
+  linesToSkip: number,
+  linesToRead: number,
+  maxContentLength: number,
+): ExtractLinesResult {
+  if (fullContent === "" || linesToRead === 0) {
+    if (linesToSkip === 0 && linesToRead > 0) {
+      return {
+        content: "",
+        actualEndLine: 0,
+        wasLimited: false,
+        linesRead: 1,
+      };
+    } else {
+      return {
+        content: "",
+        actualEndLine: linesToSkip,
+        wasLimited: false,
+        linesRead: 0,
+      };
+    }
+  }
+
+  let linesSeen = 0;
+  let index = 0;
+
+  while (linesSeen < linesToSkip) {
+    const nextIndex = fullContent.indexOf("\n", index);
+
+    // There were not enough lines to skip.
+    if (nextIndex < 0) {
+      return {
+        content: "",
+        actualEndLine: linesToSkip,
+        wasLimited: false,
+        linesRead: 0,
+      };
+    }
+
+    linesSeen += 1;
+    index = nextIndex + 1;
+  }
+
+  // We've successfully skipped over all the lines we were supposed to.
+  // Now we can actually start reading!
+  const startIndex = index;
+  linesSeen = 0;
+
+  let contentLength = 0;
+  let wasLimited = false;
+
+  while (linesSeen < linesToRead) {
+    const nextIndex = fullContent.indexOf("\n", index);
+
+    if (nextIndex < 0) {
+      // Last line in file (no trailing newline)
+      const newContentLength = fullContent.length - startIndex;
+      if (linesSeen > 0 && newContentLength > maxContentLength) {
+        wasLimited = true;
+        break;
+      }
+      linesSeen += 1;
+      contentLength = newContentLength;
+      break;
+    } else {
+      // Line with newline - include up to the newline
+      const newContentLength = nextIndex + 1 - startIndex;
+      if (linesSeen > 0 && newContentLength > maxContentLength) {
+        wasLimited = true;
+        break;
+      }
+      linesSeen += 1;
+      contentLength = newContentLength;
+      index = nextIndex + 1;
+    }
+  }
+
+  // If we ended with a newline and we stopped due to byte limit or line limit (not end of file), remove the trailing newline
+  if (contentLength > 0 && fullContent[startIndex + contentLength - 1] === "\n") {
+    // Check if there's more content after our current position that we didn't read
+    if (startIndex + contentLength < fullContent.length) {
+      contentLength -= 1;
+    }
+  }
+
+  return {
+    content: fullContent.slice(startIndex, startIndex + contentLength),
+    actualEndLine: linesSeen > 0 ? linesToSkip + linesSeen - 1 : linesToSkip,
+    wasLimited,
+    linesRead: linesSeen,
+  };
+}