Claude Code splits its configuration across the project `.claude/` folder and your home directory — 20+ file locations. Only two mental models matter: settings merge across layers and are enforced; CLAUDE.md and rules concatenate into context as guidance. And every file is committed, gitignored, or Claude-written.
Every Claude Code session starts with a clean context window. Three memory mechanisms carry knowledge across sessions: CLAUDE.md files loaded every session, .claude/rules/ files that load conditionally via paths frontmatter, and auto memory Claude writes itself. All CLAUDE.md layers are concatenated into context — not inherited by override. This guide covers layer behavior, @path imports, monorepo strategies with nested CLAUDE.md, and sharing one instruction file across tools via @AGENTS.md.