CLAUDE.md is a markdown file that Claude reads at the beginning of each session, allowing users to set project-specific instructions that persist across interactions. This file saves time by eliminating the need to repeat key information about coding conventions, workflows, and other preferences for each conversation. The /init command generates a starter CLAUDE.md based on the project structure and tech stack, which users can customize by removing unnecessary lines. This setup is essential since Claude starts each session without memory of previous ones, leading to potential miscommunication about project details if not properly configured. Key components to include in CLAUDE.md are project context, code style preferences, commands for running tests or deployments, and any project-specific gotchas. Formatting the file for clarity with headings and bullet points enhances usability. For larger projects, users can also separate detailed guidelines into specific rule files within a .claude/rules/ directory, making it easier for teams to manage distinct sets of instructions without merging conflicts in a single document. This hierarchical structure allows Claude to efficiently load relevant instructions based on the current part of the codebase it’s working on. Maintaining CLAUDE.md is an ongoing process. As project needs evolve, users should continuously update the file with new preferences or corrections. Instead of simply addressing issues in the moment, users can instruct Claude to add changes to CLAUDE.md, ensuring that future sessions reflect these updates. This organic growth of the file helps maintain a tailored experience that adapts to the user's workflow and project requirements.