Claude Code Context Window: Optimize Your Token Usage

Problem: Claude Code loses track of your project when conversations get too long, and you end up re-explaining everything from scratch.

Quick Win: Watch the token percentage in Claude Code's status bar. When you hit 80%, exit the session and restart with claude for complex multi-file work:

# Exit current session (Ctrl+C or type 'exit')
# Then start fresh
claude

This single habit prevents the performance degradation that kills productivity on large projects.

Why Context Depletes Performance

Claude Code's context window is active working memory, not passive storage. As it fills up, Claude struggles to maintain awareness across your entire project.

Memory-intensive tasks that degrade first:

• Large-scale refactoring across multiple files
• Feature implementation spanning several components
• Debugging complex interaction patterns
• Code reviews requiring architectural understanding

Isolated tasks that handle high context better:

• Single-file edits with clear scope
• Independent utility function creation
• Documentation updates
• Simple bug fixes with localized impact

The insight from experienced users: avoid the last 20% of the context window for anything touching multiple parts of your codebase.

Strategic Task Chunking

Instead of pushing Claude to exhaustion, divide work into context-sized chunks with natural breakpoints.

Complete components before integration:

# First session: build the component completely
claude "Build the UserProfile component with all props and styling"
 
# New session: integrate with the larger system
claude "Integrate UserProfile with the dashboard layout"

Finish research phases before implementation:

# Research session
claude "Research authentication patterns for our Next.js app - document options"
 
# Implementation session (fresh context)
claude "Implement OAuth using the NextAuth pattern"

Between sessions, have Claude create checkpoint notes:

claude "Document the authentication decisions, patterns used, and integration points for future reference"

Store these notes in your project. When starting fresh, point Claude to them for continuity. See our memory optimization guide for advanced persistence strategies.

CLAUDE.md for Persistent Context

Your CLAUDE.md file persists across sessions automatically. Use it for context that should never be lost:

# CLAUDE.md
## Project Architecture
- Frontend: Next.js 15 with App Router
- Database: PostgreSQL with Prisma ORM
- Auth: NextAuth with Google provider
 
## Current Sprint Focus
- Building user dashboard
- Integrating payment processing

Claude reads this file at session start, giving you free context that survives restarts.

The Compaction Option

Use the /compact slash command to summarize and compress your conversation history. Compaction is now instant - Claude maintains a continuous session memory in the background, so compaction just loads that summary into a fresh context.

Your session memory includes:

• Session title and current status
• Completed work and key results
• Discussion points and open questions
• A work log updated with every message

Find your session memory at ~/.claude/projects/[project]/[session]/session_memory. This automatic summarization means compaction no longer takes two minutes - it happens immediately.

The goal: provide minimum context necessary for effective task execution. This maximizes performance, token efficiency, and cost simultaneously.

Constraints as Training

Working within token limits forces deliberate choices that make you a better Claude Code user:

• Explicit file selection - Include only relevant files, not entire codebases
• Clear task definition - Break objectives into concrete, actionable steps
• Priority-based organization - Structure prompts with critical details first
• Compact examples - Provide minimal but representative code samples

These skills transfer when context windows eventually expand. Developers who embrace constraints become better collaborators regardless of technical limits.

Next Actions

Immediate: Check your token percentage in the status bar. If above 80%, exit and restart for your next complex task.

This week: Practice chunking one large feature into component-then-integration phases.

Ongoing: Build your CLAUDE.md file with project context that persists across sessions. Explore context preservation strategies for advanced workflows. For the complete framework, see context engineering.

Master context management and you handle projects 5x larger than developers who ignore these limits.