Claude Code in VS Code vs the terminal: which should you start with?

Guide · checked against the docs on Oct 16, 2026

Claude Code comes in two main shapes: a panel inside VS Code and a command you run in a terminal. This guide sums up what Anthropic's own docs say about each, as read on October 16, 2026, so you can pick one and get building. Nothing here is a hands-on test.

Not affiliated with or endorsed by Anthropic or Microsoft. Check Anthropic's current docs before relying on these details.

Our tool page: Claude Code

What the docs say about each

Anthropic's VS Code docs say: "Claude Code is available as both a VS Code extension (graphical panel) and a CLI (command-line interface in the terminal)." (checked Oct 2026)

About the extension, they say: "The VS Code extension provides a native graphical interface for Claude Code, integrated directly into your IDE." (checked Oct 2026) They also call it "the recommended way to use Claude Code in VS Code." (checked Oct 2026)

What the extension adds, in the docs' words: "you can review and edit Claude's plans before accepting them, auto-accept edits as they're made, @-mention files with specific line ranges from your selection, access conversation history, and open multiple conversations in separate tabs or windows." (checked Oct 2026)

About the CLI: "The CLI works in any terminal." (checked Oct 2026)

Feature differences

The docs say: "Some features are only available in the CLI." (checked Oct 2026) Their comparison table lists:

(Table copied from the docs' "VS Code extension vs. Claude Code CLI" section, checked Oct 2026.)

The setup gotcha: the extension doesn't give you claude

This trips people up. The docs say: "Installing the extension does not put claude on your shell PATH." (checked Oct 2026) And: "The extension bundles a private copy of the CLI for its chat panel, but typing claude in a terminal requires the standalone CLI install." (checked Oct 2026)

So if you want both, install both. See our Claude Code install guide for the terminal version.

To install the extension, the docs say to open the Extensions view, search for Claude Code and click Install. If it doesn't show up, they say to restart VS Code or run the Developer: Reload Window command (paraphrased from the docs, checked Oct 2026).

You don't have to choose forever

The two share a lot:

• History: "The extension and CLI share the same conversation history." (checked Oct 2026) To pick up an extension conversation in the terminal, "run claude --resume in the terminal." (checked Oct 2026)
• Settings: the ~/.claude/settings.json file is "shared between the extension and CLI." (checked Oct 2026)
• CLI inside VS Code: open VS Code's integrated terminal and run claude. The docs say: "The CLI automatically integrates with your IDE for features like diff viewing and diagnostic sharing." (checked Oct 2026) In an outside terminal, "run /ide inside Claude Code to connect it to VS Code." (checked Oct 2026)
• Terminal look in the panel: "If you prefer the CLI-style interface, open the Use Terminal setting and check the box." (checked Oct 2026)

Undo and safety

Both list checkpoints. In the extension, checkpoints "track Claude's file edits and let you rewind to a previous state." (checked Oct 2026) Our advice, not a vendor quote: checkpoints are not a replacement for git. See our git basics guide.

The docs also warn: "With auto-edit permissions enabled, Claude Code can modify VS Code configuration files (like settings.json or tasks.json) that VS Code may execute automatically." (checked Oct 2026) For untrusted code they suggest you "Use Manual mode instead of Edit automatically or Auto for edits" (checked Oct 2026) and "Review changes carefully before accepting them" (checked Oct 2026).

Which one to start with

Our advice, not a vendor quote:

• If you already build in VS Code and want to see diffs and plans in a panel, start with the extension.
• If you want every command and skill, or you work outside VS Code, install the CLI.
• If you're not sure, install both. They share history and settings, so you can switch any time.

Whichever you pick, commit your work before you ask for a big change.

Not affiliated with or endorsed by Anthropic or Microsoft. Check Anthropic's current docs before relying on these details.