claude-code/learn/10-configuration-and-system-prompt.md

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# 10. Configuration and System Prompt
> How settings cascade from enterprise policy down to project CLAUDE.md, and how the system prompt is assembled.
---
## Configuration Hierarchy
Claude Code loads settings from **5 layers**, each with strict priority. Higher layers override lower ones.
```mermaid
%%{init: {'theme': 'dark', 'themeVariables': { 'primaryColor': '#1a1a2e', 'primaryTextColor': '#e0e0e0', 'lineColor': '#4a9eff', 'primaryBorderColor': '#4a9eff'}}}%%
flowchart TD
subgraph Sources["Configuration Sources — Highest to Lowest Priority"]
direction TB
ENT["Enterprise / MDM Policy<br/>managed-settings.json<br/>Org-level, cannot override"]:::ent
USER["User Settings<br/>~/.claude/settings.json<br/>Per-user global defaults"]:::user
PROJ["Project Settings<br/>.claude/settings.json<br/>Per-repo configuration"]:::proj
MCP_CFG[".mcp.json<br/>Project MCP servers<br/>Committed to repo"]:::proj
CLAUDE_MD["CLAUDE.md files<br/>Instructions, rules,<br/>memory for the model"]:::md
end
ENT --> MERGE
USER --> MERGE
PROJ --> MERGE
MCP_CFG --> MERGE
CLAUDE_MD --> MERGE
MERGE["getInitialSettings<br/>Merge all layers<br/>Higher priority wins"]:::merge
APPSTATE["AppState.settings<br/>Runtime configuration"]:::state
MERGE --> APPSTATE
classDef ent fill:#4a1a1a,stroke:#dc3545,color:#e0e0e0,stroke-width:2px
classDef user fill:#2d2d0d,stroke:#ffc107,color:#e0e0e0,stroke-width:2px
classDef proj fill:#0d4f4f,stroke:#17a2b8,color:#e0e0e0,stroke-width:2px
classDef md fill:#2d1b4e,stroke:#6f42c1,color:#e0e0e0,stroke-width:2px
classDef merge fill:#1a2d4a,stroke:#4a9eff,color:#e0e0e0,stroke-width:2px
classDef state fill:#1b3a1b,stroke:#28a745,color:#e0e0e0,stroke-width:2px
```
### Enterprise / MDM Policy
Highest priority. Set by organization admins via Mobile Device Management (macOS profiles). Stored at a managed file path. Users **cannot** override these settings. Controls things like:
- Allowed/denied MCP servers
- Permission mode restrictions
- Feature availability
- Analytics opt-out
### User Settings (`~/.claude/settings.json`)
Per-user defaults. Controls preferences like allowed tools, custom deny rules, and hooks.
### Project Settings (`.claude/settings.json`)
Per-repository settings. Committed to the repo so all collaborators share the same configuration.
### `.mcp.json`
MCP server definitions for the project. Lives at the repo root. Defines which MCP servers are available. Validated via Zod schema (`McpServerConfigSchema`).
### CLAUDE.md
Markdown instruction files that the model reads as part of its system prompt. These are the "memory" files that tell Claude about this specific project.
---
## CLAUDE.md Discovery
CLAUDE.md files are discovered from multiple locations and merged:
```mermaid
%%{init: {'theme': 'dark', 'themeVariables': { 'primaryColor': '#1a1a2e', 'primaryTextColor': '#e0e0e0', 'lineColor': '#6f42c1', 'primaryBorderColor': '#6f42c1'}}}%%
flowchart TD
subgraph Discovery["CLAUDE.md Discovery — getMemoryFiles"]
GLOBAL["~/.claude/CLAUDE.md<br/>Global instructions"]:::global
CWD_WALK["Walk from cwd up to git root<br/>Check each dir for CLAUDE.md<br/>and .claude/CLAUDE.md"]:::walk
ADDITIONAL["--add-dir paths<br/>Extra directories to scan"]:::additional
end
FILTER["filterInjectedMemoryFiles<br/>Remove duplicates,<br/>check setting sources"]:::filter
PARSE["getClaudeMds<br/>Read and concatenate<br/>all discovered files"]:::parse
CACHE["setCachedClaudeMdContent<br/>Cache for auto-mode<br/>classifier to read"]:::cache
INJECT["Injected into getUserContext<br/>becomes part of system prompt"]:::inject
Discovery --> FILTER --> PARSE --> CACHE --> INJECT
classDef global fill:#2d2d0d,stroke:#ffc107,color:#e0e0e0,stroke-width:2px
classDef walk fill:#0d4f4f,stroke:#17a2b8,color:#e0e0e0,stroke-width:2px
classDef additional fill:#1a2d4a,stroke:#4a9eff,color:#e0e0e0,stroke-width:2px
classDef filter fill:#3d2b00,stroke:#fd7e14,color:#e0e0e0,stroke-width:2px
classDef parse fill:#2d1b4e,stroke:#6f42c1,color:#e0e0e0,stroke-width:2px
classDef cache fill:#333,stroke:#888,color:#e0e0e0,stroke-width:1px
classDef inject fill:#1b3a1b,stroke:#28a745,color:#e0e0e0,stroke-width:2px
```
The `--bare` flag skips auto-discovery but still honors explicit `--add-dir` paths.
---
## System Prompt Assembly
The system prompt is what the model "sees" before any conversation messages. It's assembled from multiple pieces:
```mermaid
%%{init: {'theme': 'dark', 'themeVariables': { 'primaryColor': '#1a1a2e', 'primaryTextColor': '#e0e0e0', 'lineColor': '#e83e8c', 'primaryBorderColor': '#e83e8c'}}}%%
flowchart TD
subgraph Priority["System Prompt Priority — buildEffectiveSystemPrompt"]
OVERRIDE["1. Override System Prompt<br/>Set via loop mode<br/>REPLACES everything"]:::override
COORD["2. Coordinator System Prompt<br/>If coordinator mode active"]:::coord
AGENT["3. Agent System Prompt<br/>If mainThreadAgentDefinition set<br/>In proactive mode: APPENDED<br/>Otherwise: REPLACES default"]:::agent
CUSTOM["4. Custom System Prompt<br/>Via --system-prompt flag"]:::custom
DEFAULT["5. Default System Prompt<br/>The standard Claude Code prompt"]:::default
end
APPEND["appendSystemPrompt<br/>Always appended at end<br/>except when override is set"]:::append
EFFECTIVE["Effective System Prompt<br/>Sent as system param<br/>in API request"]:::result
OVERRIDE -->|"if set"| EFFECTIVE
COORD -->|"if coordinator"| EFFECTIVE
AGENT -->|"if agent defined"| EFFECTIVE
CUSTOM -->|"if --system-prompt"| EFFECTIVE
DEFAULT -->|"fallback"| EFFECTIVE
APPEND --> EFFECTIVE
classDef override fill:#4a1a1a,stroke:#dc3545,color:#e0e0e0,stroke-width:2px
classDef coord fill:#3d2b00,stroke:#fd7e14,color:#e0e0e0,stroke-width:2px
classDef agent fill:#2d1b4e,stroke:#6f42c1,color:#e0e0e0,stroke-width:2px
classDef custom fill:#2d2d0d,stroke:#ffc107,color:#e0e0e0,stroke-width:2px
classDef default fill:#1a2d4a,stroke:#4a9eff,color:#e0e0e0,stroke-width:2px
classDef append fill:#0d4f4f,stroke:#17a2b8,color:#e0e0e0,stroke-width:2px
classDef result fill:#1b3a1b,stroke:#28a745,color:#e0e0e0,stroke-width:2px
```
### System Prompt Sections
Individual sections of the system prompt are defined via `systemPromptSection()`:
```mermaid
%%{init: {'theme': 'dark', 'themeVariables': { 'primaryColor': '#1a1a2e', 'primaryTextColor': '#e0e0e0', 'lineColor': '#4a9eff', 'primaryBorderColor': '#4a9eff'}}}%%
flowchart LR
subgraph Sections["System Prompt Sections"]
CACHED["Cached Sections<br/>Computed once at start<br/>Reused every turn<br/>Cleared on /clear or /compact"]:::cached
VOLATILE["DANGEROUS Uncached Sections<br/>Recomputed every turn<br/>BREAKS prompt cache"]:::volatile
end
RESOLVE["resolveSystemPromptSections<br/>Check cache, compute if needed"]:::resolve
PROMPT["Final system prompt string"]:::result
CACHED --> RESOLVE
VOLATILE --> RESOLVE
RESOLVE --> PROMPT
classDef cached fill:#1b3a1b,stroke:#28a745,color:#e0e0e0,stroke-width:2px
classDef volatile fill:#4a1a1a,stroke:#dc3545,color:#e0e0e0,stroke-width:2px
classDef resolve fill:#1a2d4a,stroke:#4a9eff,color:#e0e0e0,stroke-width:2px
classDef result fill:#2d1b4e,stroke:#6f42c1,color:#e0e0e0,stroke-width:2px
```
Most sections are **cached** (computed once, reused every turn) to preserve prompt cache hits. Volatile sections that recompute every turn are explicitly named `DANGEROUS_uncachedSystemPromptSection` as a warning.
---
## Context Injection
Beyond the system prompt, two context objects are injected into every conversation:
```mermaid
%%{init: {'theme': 'dark', 'themeVariables': { 'primaryColor': '#1a1a2e', 'primaryTextColor': '#e0e0e0', 'lineColor': '#28a745', 'primaryBorderColor': '#28a745'}}}%%
flowchart LR
subgraph SystemCtx["getSystemContext — memoized"]
GIT["Git status snapshot<br/>branch, status, log,<br/>default branch, user"]
INJECT_SYS["System prompt injection<br/>internal debugging only"]
end
subgraph UserCtx["getUserContext — memoized"]
CMD["CLAUDE.md content<br/>all discovered files<br/>concatenated"]
DATE["Current date<br/>ISO format"]
end
PREPEND["prependUserContext<br/>Prepended to messages<br/>before API call"]:::merge
SystemCtx --> PREPEND
UserCtx --> PREPEND
classDef merge fill:#1b3a1b,stroke:#28a745,color:#e0e0e0,stroke-width:2px
```
Both are **memoized** and cached for the duration of the conversation. They're cleared on `/clear` and `/compact`.
---
## Markdown Config Discovery
Commands, agents, skills, and workflows are all loaded via `markdownConfigLoader.ts`:
```mermaid
%%{init: {'theme': 'dark', 'themeVariables': { 'primaryColor': '#1a1a2e', 'primaryTextColor': '#e0e0e0', 'lineColor': '#fd7e14', 'primaryBorderColor': '#fd7e14'}}}%%
flowchart TD
subgraph Dirs["Search Directories — Priority Order"]
MANAGED["Managed (enterprise)<br/>Policy-level configs"]:::ent
USER_DIR["User (~/.claude/)<br/>Personal configs"]:::user
PROJ_DIRS["Project (.claude/)<br/>Walk cwd up to git root<br/>Check each ancestor"]:::proj
end
LOADER["loadMarkdownFilesForSubdir<br/>Discover + parse YAML frontmatter<br/>+ markdown content"]:::loader
DEDUP["Deduplicate by inode<br/>Handle symlinks gracefully"]:::dedup
FILES["MarkdownFile array<br/>filePath, frontmatter,<br/>content, source"]:::result
MANAGED --> LOADER
USER_DIR --> LOADER
PROJ_DIRS --> LOADER
LOADER --> DEDUP --> FILES
classDef ent fill:#4a1a1a,stroke:#dc3545,color:#e0e0e0,stroke-width:2px
classDef user fill:#2d2d0d,stroke:#ffc107,color:#e0e0e0,stroke-width:2px
classDef proj fill:#0d4f4f,stroke:#17a2b8,color:#e0e0e0,stroke-width:2px
classDef loader fill:#1a2d4a,stroke:#4a9eff,color:#e0e0e0,stroke-width:2px
classDef dedup fill:#3d2b00,stroke:#fd7e14,color:#e0e0e0,stroke-width:2px
classDef result fill:#1b3a1b,stroke:#28a745,color:#e0e0e0,stroke-width:2px
```
This same loader powers:
- Slash commands (`.claude/commands/`)
- Agents (`.claude/agents/`)
- Skills (`.claude/skills/`)
- Workflows (`.claude/workflows/`)
- Output styles (`.claude/output-styles/`)
Each entry is parsed with YAML frontmatter for metadata (description, tools, etc.) and the markdown body becomes the instructions.
---
## Key Files
- `src/utils/systemPrompt.ts``buildEffectiveSystemPrompt()` logic
- `src/constants/systemPromptSections.ts` — Section caching system
- `src/context.ts``getSystemContext()`, `getUserContext()`, git status
- `src/utils/markdownConfigLoader.ts` — CLAUDE.md and `.claude/` directory discovery
- `src/utils/claudemd.ts` — Memory file reading and concatenation
- `src/utils/settings/settings.ts` — Settings merge logic
---
**Previous:** [<- UI Architecture](./09-ui-architecture.md) | **Next:** [MCP Deep Dive ->](./11-mcp-deep-dive.md)