D3.1 · Domain 3 · Agent Operations · 20% of CCA-F

CLAUDE.md Hierarchy.

7 min read·10 sections·Tier A

CLAUDE.md is persistent project memory loaded automatically by Claude Code. A three-level hierarchy (user → project → directory) lets you set global defaults, team standards, and per-directory rules. Project-level files are version-controlled and shared. Use @import to keep CLAUDE.md modular. Claude Code docs

Project memory standardDomain 3Three-level cascade
CLAUDE.md Hierarchy, hero illustration featuring Loop mascot in a warm gallery scene.
Domain D3Agent Operations · 20%
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01 · Summary

TLDR

CLAUDE.md is persistent project memory loaded automatically by Claude Code. A three-level hierarchy (user → project → directory) lets you set global defaults, team standards, and per-directory rules. Project-level files are version-controlled and shared. Use @import to keep CLAUDE.md modular. Claude Code docs

3
Hierarchy levels
2
File locations
@import
Import syntax
D3
Exam domain
,
Hard rule limit
02 · Definition

What it is

CLAUDE.md is a configuration file for Claude Code that defines project rules, conventions, and architectural decisions. It's not a .gitignore or a README, it's a working set of instructions that Claude reads every time it edits code or runs a command. The hierarchy has three levels: user (~/.claude/CLAUDE.md, your personal defaults), project (.claude/CLAUDE.md or root CLAUDE.md, shared rules), and path-specific (.claude/rules/*.md with glob frontmatter, rules for specific files).

The content is free-form Markdown but structured: stack info, test commands, code-style rules, key architectural decisions, gotchas, and @import directives that pull in modular rule files. Claude parses it as plain text, there's no schema validation, so mistakes in naming or structure cause silent ignores. The real power is reusability: rules travel with the code (version-controlled in .claude/), every teammate sees them on git clone, and new team members onboard faster.

Path-specific rules use YAML frontmatter with a paths glob array. When Claude edits a file matching the glob (e.g. **/*.test.tsx), that rule file auto-loads alongside the project CLAUDE.md. This enables scoped rule enforcement without drowning the main CLAUDE.md in per-file details. A testing rule file specifies pytest/Jest conventions, coverage thresholds, naming, all loaded only when you touch a test file.

Production misuse centers on scope creep (main CLAUDE.md becomes 500 lines of every possible rule) and rule inheritance traps (team expects user rules to apply but they don't, user rules are personal, project rules are shared). A contributor clones the repo, uses their personal style from ~/.claude/CLAUDE.md, and produces inconsistent code. The fix is always: put team rules in `.claude/CLAUDE.md`, never in user files.

03 · Mechanics

How it works

When Claude Code starts, it loads CLAUDE.md in order: (1) reads user ~/.claude/CLAUDE.md (personal defaults); (2) reads project root .claude/CLAUDE.md or root CLAUDE.md (shared); (3) while editing a file, checks all .claude/rules/*.md files, tests the paths glob against the filename, and loads matches. All loaded content is concatenated and injected as context into Claude's system prompt. The result is a layered set of rules: personal, then project, then path-scoped.

When a .claude/rules/*.md file contains @import ./subdir/rules/testing.md, Claude resolves the import and inlines that file's content. This prevents the main CLAUDE.md from exploding; rules live in modular files and compose via import. Circular imports are not detected and will hang the load. A production gotcha if you @import a file that imports its parent. Keep the import graph acyclic.

Path-specific rules are scoped via glob frontmatter. A testing rule file declares paths: ["**/*.test.tsx", "**/*.spec.ts"]. When you create or edit a file matching either glob, the rule auto-loads. Token-efficient: irrelevant rules don't load, keeping context focused. A migration rule (paths: ["migrations/*.sql"]) only loads when you touch SQL files.

Claude reads CLAUDE.md once at startup, not continuously. Changes require a session restart (or a manual reload command in newer versions). This is a UX tradeoff: rules are stable within a session (no surprise mid-conversation changes), but editing CLAUDE.md does not take effect immediately. Plan edits before sessions, not during.

CLAUDE.md Hierarchy mechanics, painterly diagram featuring Loop mascot.
04 · In production

Where you'll see it

Open-source repo onboarding

New contributor clones the repo. Project CLAUDE.md auto-loads: stack, test commands, code-style rules, key decisions. Saves a 30-min onboarding email per contributor. Rules travel with the code; nobody works from outdated docs.

Monorepo with subteam directories

Frontend team has rules in app/.claude/CLAUDE.md (component patterns, testing conventions); backend has api/.claude/CLAUDE.md (db migration discipline, error handling). Root CLAUDE.md holds shared rules. Editing inside app/ loads frontend rules; inside api/ loads backend rules.

Personal vault across many projects

Solo dev keeps personal preferences in ~/.claude/CLAUDE.md (preferred indent, commit message format). Each project repo has its own root CLAUDE.md with stack details. Switching projects: project rules change automatically; personal style stays consistent.

05 · Implementation

Code examples

Project CLAUDE.md skeleton
# Project: PrecisionCare Navigator

## Stack
- Python 3.11 + FastAPI + Postgres
- React 19 + ShadCN + Tailwind
- Claude Opus for medical NER
- AWS ECS + RDS, region us-east-1

## Commands
- Dev: `make dev` (FastAPI :8000, React :3000)
- Test: `pytest -v --cov=app`
- Lint: `ruff check . && black --check .`
- Deploy: `make deploy ENV=staging`

## Code style
- 4-space Python (Black), 2-space React (Prettier)
- Type hints on every function (mypy strict)
- Named exports only
- Server actions for mutations; route handlers for queries

## Key decisions
- All patient data encrypted at rest and in transit
- Never log PII (mask in middleware)
- Async background work via Celery + Redis (not asyncio in FastAPI)

## Modular rules
@import ./rules/testing.md
@import ./rules/healthcare-compliance.md
@import ./rules/api-design.md

## Don't
- Add new endpoints without a corresponding test
- Mock the database in integration tests
- Commit secrets (use .env.example as the template)
Project CLAUDE.md should fit in ~1000-1500 tokens. Use @import for modular rule files. Lives at repo root, committed to git, shared with the whole team.
06 · Distractor patterns

Looks right, isn't

Each row pairs a plausible-looking pattern with the failure it actually creates. These are the shapes exam distractors are built from.

Looks right

Put all team rules in ~/.claude/CLAUDE.md so they live with each developer.

Actually wrong

User-level files are personal and not in the repo. Team rules belong in project-level CLAUDE.md (root, committed). Otherwise new team members miss them.

Looks right

Document every framework convention exhaustively in CLAUDE.md.

Actually wrong

CLAUDE.md is appended to every prompt. Bloated files burn tokens and dilute attention. Keep it concise (~1500 tokens). Use @import for modular detail; link to long-form docs.

Looks right

Embed API keys in CLAUDE.md so Claude has them on every session.

Actually wrong

CLAUDE.md is committed to git. Secrets leak. Use environment variables and reference them in CLAUDE.md by name (e.g., 'OPENROUTER_API_KEY required in env').

Looks right

User CLAUDE.md overrides project CLAUDE.md when they conflict.

Actually wrong

Order is the opposite. Project CLAUDE.md is loaded after user CLAUDE.md, so project rules take precedence on conflicts (later instructions in the prompt have stronger weight). A teammate's personal ~/.claude/CLAUDE.md cannot override a team rule, that's the whole point of the hierarchy.

Looks right

Edit CLAUDE.md mid-session and Claude will pick up the changes immediately.

Actually wrong

CLAUDE.md is loaded once at session start. Changes require either a new session or, in newer Claude Code versions, the /init reload command. Mid-session edits are silent no-ops; this is why teams discover that "my new rule isn't being followed", they edited but didn't restart.

07 · Compare

Side-by-side

MechanismScopeShared?Loaded whenBest for
~/.claude/CLAUDE.mdAll your projectsNo (personal)Every sessionPersonal preferences, indent style
./CLAUDE.md (project)One repoYes (in git)Every session in repoStack, commands, team standards
.claude/rules/*.mdPath-glob scopedYes (in git)When editing matching filesPer-folder conventions (tests, api/)
Skills (.claude/skills/)Task-scopedYes (in git)When task description matchesReusable workflows (PR review, etc.)
@import directivesInlined into parent CLAUDE.mdInherits parent's git statusLoaded with parent at session startModular rule decomposition
AGENTS.md (override file)Project-wide; non-Claude toolsYes (in git)Read by Claude Code at startupCross-tool agent instructions (Codex, Cursor, Claude)
08 · When to use

Decision tree

01

Does this rule apply to everyone on the team?

YesProject CLAUDE.md (root) or .claude/rules/. Both committed to git.
NoPersonal preference → ~/.claude/CLAUDE.md.
02

Does the rule apply only to certain file types or directories?

YesUse .claude/rules/<topic>.md with frontmatter paths: [...]. Loads on demand.
NoProject CLAUDE.md root.
03

Is it a reusable workflow (e.g., PR review process)?

YesMake a Skill in .claude/skills/, not a CLAUDE.md addition.
NoEmbed in CLAUDE.md.
04

Is the CLAUDE.md exceeding ~1500 tokens?

YesDecompose into @import chunks: @import ./rules/testing.md, @import ./rules/security.md. Keeps the always-on context lean and lets you scope detailed rules to topics.
NoInline is fine. Optimize for readability.
05

Are you running other agentic tools (Codex, Cursor) on the same repo?

YesAdd an AGENTS.md file with cross-tool instructions and have CLAUDE.md include @AGENTS.md at the top. Single source of truth across tools.
NoPlain CLAUDE.md is sufficient.
09 · On the exam

Question patterns

CLAUDE.md Hierarchy exam trap, painterly cautionary scene featuring Loop mascot.

45 V2 questions wired to this concept. Tap an answer to check it instantly — you'll see whether it's right and why — then expand the full breakdown for the mental model and all four rationales.

Cross-task context like a vendor matrix path should live in: project Instructions or session messages?

Tap your answer to check it.

You hardcoded a GitHub token in .mcp.json. A teammate clones the repo and your token leaks. Fix?

Tap your answer to check it.

A teammate's PRs use a different code style than yours. They have rules in ~/.claude/CLAUDE.md but not in the repo. What is the architectural fix?

Tap your answer to check it.

You add a new rule to .claude/CLAUDE.md mid-session. Claude does not follow it. Why?

Tap your answer to check it.

Your testing rule file lives at .claude/rules/testing.md but does not auto-load when editing test files. What is missing?

Tap your answer to check it.

Two CLAUDE.md files each have @import ./shared.md, and shared.md has @import ../main.md. Claude Code hangs on session load. Why?

Tap your answer to check it.

39 additional questions for this concept live in the practice pillar. Take a mock exam ↗

10 · FAQ

Frequently asked

What's the actual merge order when all three CLAUDE.md tiers exist?
User → Project → Path-specific. User loads first (broadest scope, weakest priority), project loads next, path-specific rules append last when you touch matching files. Later instructions win on conflict because LLMs weight recent context more strongly.
How is `@import` resolved, file path or URL?
Local file path only, relative to the importing file's directory. @import ./rules/testing.md from CLAUDE.md reads ./rules/testing.md. URLs are not supported. Circular imports hang the loader, keep the import graph acyclic.
Does CLAUDE.md content count toward the context window every turn?
Yes. CLAUDE.md is concatenated into the system prompt and sent on every API call. A 5,000-token CLAUDE.md costs you 5K tokens per turn unless cached. Mark stable rule files with `cache_control` via a wrapper, or keep CLAUDE.md under 1,500 tokens to begin with.
Can I have multiple CLAUDE.md files in nested project directories?
Yes. Claude Code walks up from the current working directory and loads the nearest CLAUDE.md plus the project root one. Useful for monorepos where apps/web/CLAUDE.md adds frontend-specific rules on top of root rules.
How do path-glob rules differ from CLAUDE.md `@import`?
`@import` is unconditional, the imported content is always loaded with the parent. Path-glob rules are conditional, they load only when an edit/read targets a file matching the paths: array in their frontmatter. Use imports for organization, glob rules for scoped policy.
What's the relationship between CLAUDE.md and AGENTS.md?
`AGENTS.md` is the cross-tool standard (used by Codex CLI, Cursor, OpenCode, etc.). Claude Code reads it via @AGENTS.md import inside CLAUDE.md, or directly if present. Use AGENTS.md for tool-agnostic rules; use CLAUDE.md for Claude-specific patterns (skills, hooks, MCP).
Should I commit `.claude/settings.local.json`?
No. settings.local.json is per-developer (your local permissions, env vars). The shared file is .claude/settings.json. Add settings.local.json to .gitignore; otherwise teammates inherit each other's accidental "allow all" permissions.
How do I prevent CLAUDE.md from drifting between projects?
Two patterns: (1) template repo with a canonical CLAUDE.md skeleton; (2) shared rule package in a separate repo, projects import it via submodule and @import ./shared-rules/*.md. Drift management is the #1 reason large orgs adopt the modular import pattern.
Can hooks defined in `.claude/settings.json` override CLAUDE.md instructions?
They live in different layers: CLAUDE.md is prompt-time guidance, hooks are execution-time enforcement. A hook can deterministically block a Bash command even if CLAUDE.md said it was fine; CLAUDE.md cannot override a hook's exit code. Hooks always win in execution.
What happens when CLAUDE.md grows past the size budget?
Claude Code displays a warning (CLAUDE.md exceeds recommended size) and continues. The model still receives it but with degraded attention to any single rule. The fix is decomposition: move detailed rules to .claude/rules/*.md with path globs, keep the main CLAUDE.md as a high-level index of imports.
11 · Practice with AI

Work this with your AI

Work this concept hands-on with Claude Code, Codex, or claude.ai. Copy a prompt, paste it into your assistant, and practise in tandem. Each one keeps you active (explain it back, get drilled, or build) rather than just reading.

  • Drill it like the exam (scenario MCQs)
    Practice in the exam's scenario-MCQ format with trap awareness.
  • Explain it back (Feynman)
    Build durable, transferable understanding of a concept you can half-state.
  • Test me, adapting the difficulty
    Active recall practice on a concept you think you know.
  • Check my prerequisites first
    Before studying a concept that keeps not sticking.
  • Find the high-leverage 20%
    When a domain feels too big and you are short on time.
Self-check

Test yourself

Three diagnostic questions on this primitive. Reveal each answer when you have a guess. Want a full 60-question mock? Open the mock hub →

Q1A teammate's PRs use a different code style than yours. They have rules in `~/.claude/CLAUDE.md` but not in the repo. Fix?
Move team rules to .claude/CLAUDE.md (project root, version-controlled). User-level rules are personal; only project rules are shared via git. Team standards belong in the repo.
Q2You add a rule to `.claude/CLAUDE.md` mid-session. Claude doesn't follow it. Why?
CLAUDE.md is loaded once at session start. Mid-session edits don't take effect until restart. End the session, restart, and the new rules apply.
Q3Your testing rule file sits in `.claude/rules/testing.md` but doesn't auto-load when editing test files. What's missing?
Check the YAML frontmatter paths glob. Make sure it matches your file paths exactly. Try paths: ["**/*.test.tsx", "**/*.spec.ts"] for broad coverage.
Last reviewed: 2026-05-04·Refresh cadence: monthly
D3.1 · D3 · Agent Operations

CLAUDE.md Hierarchy, complete.

You've covered the full ten-section breakdown for this primitive, definition, mechanics, code, false positives, comparison, decision tree, exam patterns, and FAQ. One technical primitive down on the path to CCA-F.

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