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Claude.md Explained: A Beginner’s Guide to Claude Code Project Rules and Memory

5 min readMay 12, 2026

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With AI, the way we write code and scaffold projects is evolving. Instead of relying solely on manual implementation, many teams are adopting spec-driven development (SDD) alongside AI coding assistants.

In this blog, we’ll explore how to set up a project using Claude. Claude offers several configuration options, including claude.md, skills.md, agents, and rules, plugins . This is the part 1 , where we will go through claude.md and followed by the rest.

1. What is Claude.md

claude.md is a markdown (md) file and acts as a central context file for your project. It can include information about your project’s architecture, coding style, conventions, and important notes or tasks. Think of it as a shared reference that helps Claude understand how to work effectively within your codebase.

You can often generate an initial version using an init command , and then refine it over time.

2. Why we need claude.md?

`Claude.md` makes AI tools aligned with the team or personal standards & preferences, to guide your AI tool — what to do eg: do not say — “as an expert..”, or “ask before any destructive action” and so on.

3. Types of Claude.md

In many workflows, claude.md can exist at multiple levels:

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Neha Sharma
Neha Sharma

Written by Neha Sharma

Solution Architect at Amazon; Brain behind JSLovers, Tech Speaker; https://x.com/hellonehha; My Blogs: https://nehasharma.dev/