Should I use the Claude Code VS Code extension or run the CLI in the integrated terminal?

The VS Code extension is not a different product. It is a graphical layer on top of the same CLI session. If you open a terminal inside VS Code and run claude, the extension panel connects to that session automatically.

Install from the VS Code Marketplace:

code --install-extension anthropic.claude-code

Or search “Claude Code” in the Extensions panel.

What the extension adds

The graphical diff viewer shows proposed edits in VS Code’s built-in diff view. You approve or reject them the same way you would a git merge.

The plugin manager lets you browse and install plugins from the sidebar without typing claude plugin install.

Session history shows previous conversations in a scrollable panel. You can pick up an old thread without --resume.

The Remote tab resumes a claude.ai cloud session from inside VS Code. Requires a Pro, Team, or Enterprise subscription.

The IDE MCP server runs locally and exposes two tools Claude can call:

• mcp__ide__getDiagnostics: reads the current TypeScript/ESLint errors from VS Code’s language server without Claude having to run tsc in a shell
• mcp__ide__executeCode: runs a code cell in a Jupyter notebook and returns the output

If you write PreToolUse hooks that match MCP tools, you need mcp__ide__* in your matcher patterns to catch these.

Cursor selection reference: place your cursor on a line range, press Option+K, and VS Code inserts @filename.ts#5-10 into the chat input. No typing paths by hand.

The URI handler opens Claude Code from a browser, runbook, or script:

vscode://anthropic.claude-code/open?prompt=Explain+this+function&cwd=/path/to/repo

The prompt pre-fills but does not auto-send. You review before Claude acts.

What the CLI keeps that the extension does not

The ! shortcut and tab completion are terminal features. They do not translate to a panel UI.

Focus toggle

Cmd+Esc (Mac) or Ctrl+Esc (Windows/Linux) toggles focus between the editor and the Claude Code panel without reaching for the mouse.

On macOS Tahoe, Cmd+Esc is reserved for the Game Overlay. Change either the system shortcut or the Claude Code shortcut in Keyboard Shortcuts settings.

Jupyter notebooks

When Claude proposes a code cell edit in a .ipynb file, the extension shows a Quick Pick dialog before executing. This is intentional — notebook execution is side-effecting and irreversible. Confirm or cancel from the Quick Pick.

Footguns

/mcp, /plugin, and /resume are CLI-only. These commands open interactive pickers in the terminal and do not render in the extension panel. If you need to add an MCP server or install a plugin, open a terminal.

The IDE MCP server starts on a random port that changes every session. Do not hardcode it in hook matchers or external scripts. Use the mcp__ide__* name pattern instead.

The Remote tab does not load your local ~/.claude config. That session is a cloud session. Your local ~/.claude/settings.json, hooks, and skills do not apply. Configure them at the workspace level in .claude/settings.json if you need them in cloud sessions.

The Remote tab needs a full-scope login token. If you authenticated via claude setup-token or CLAUDE_CODE_OAUTH_TOKEN, the Remote tab will show “requires full-scope login.” Run claude auth login via the OAuth flow to get the right token scope.

When NOT to use the extension

• You need /mcp or /plugin workflows. Run the CLI directly.
• You are on Linux. The extension supports macOS and Windows. Linux users run the CLI.
• You prefer the terminal diff UI. The extension’s graphical diff is not universally preferred. The CLI text diff is faster to keyboard-navigate for experienced users.
• You work in a remote container via SSH. Install the extension in the remote host, not the local VS Code instance. Extensions that run in the local window cannot reach the remote filesystem.