The 3 Files That Make Claude Code Much Smarter

Last Updated on October 6, 2026 by Editorial Team Author(s): Codebook Fusion Originally published on Towards AI. Learn the three files that make Claude Code smarter: CLAUDE.md, settings.json and SKILL.md. Real examples, setup steps, and honest tradeoffs. For my first few weeks with Claude Code, I did something embarrassing. I typed the same instructions at the start of every session. Use pnpm, not npm. Run the tests before you say you’re done. Leave the migrations folder alone. Then I got annoyed when Claude drifted off the rules. IMAGE GENERATED BY CHATGPTThe article explains that Claude Code improves dramatically when you stop re-prompting rules and instead store them in three purpose-built files: CLAUDE.md (project context and guidance), settings.json (permissions and enforced hooks so Claude can’t “talk its way around” constraints), and SKILL.md (repeatable workflows you can run by name, optionally bundling supporting files). It walks through what to put in each file, key tradeoffs (e.g., guidance vs enforced rules, keeping files small, starting permissions narrow), a quick 15-minute setup checklist, common failure modes like bloating CLAUDE.md, and an FAQ clarifying where the…

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