Preserve local project context across compaction and todo updates

This change makes compaction summaries durable under .claude/memory,
feeds those saved memory files back into prompt context, updates /memory
to report both instruction and project-memory files, and moves TodoWrite
persistence to a human-readable .claude/todos.md file.

Constraint: Reuse existing compaction, prompt loading, and slash-command plumbing rather than add a new subsystem
Constraint: Keep persisted project state under Claude-local .claude/ paths
Rejected: Introduce a dedicated memory service module | larger diff with no clear user benefit for this task
Confidence: high
Scope-risk: moderate
Reversibility: clean
Directive: Project memory files are loaded as prompt context, so future format changes must preserve concise readable content
Tested: cargo fmt --all --manifest-path rust/Cargo.toml
Tested: cargo clippy --manifest-path rust/Cargo.toml --all-targets --all-features -- -D warnings
Tested: cargo test --manifest-path rust/Cargo.toml --all
Not-tested: Long-term retention/cleanup policy for .claude/memory growth

rust/crates/runtime/src/compact.rs

@@ -1,3 +1,6 @@
+use std::fs;
+use std::time::{SystemTime, UNIX_EPOCH};
+
 use crate::session::{ContentBlock, ConversationMessage, MessageRole, Session};
 
 #[derive(Debug, Clone, Copy, PartialEq, Eq)]
@@ -90,6 +93,7 @@ pub fn compact_session(session: &Session, config: CompactionConfig) -> Compactio
     let preserved = session.messages[keep_from..].to_vec();
     let summary = summarize_messages(removed);
     let formatted_summary = format_compact_summary(&summary);
+    persist_compact_summary(&formatted_summary);
     let continuation = get_compact_continuation_message(&summary, true, !preserved.is_empty());
 
     let mut compacted_messages = vec![ConversationMessage {
@@ -110,6 +114,35 @@ pub fn compact_session(session: &Session, config: CompactionConfig) -> Compactio
     }
 }
 
+fn persist_compact_summary(formatted_summary: &str) {
+    if formatted_summary.trim().is_empty() {
+        return;
+    }
+
+    let Ok(cwd) = std::env::current_dir() else {
+        return;
+    };
+    let memory_dir = cwd.join(".claude").join("memory");
+    if fs::create_dir_all(&memory_dir).is_err() {
+        return;
+    }
+
+    let path = memory_dir.join(compact_summary_filename());
+    let _ = fs::write(path, render_memory_file(formatted_summary));
+}
+
+fn compact_summary_filename() -> String {
+    let timestamp = SystemTime::now()
+        .duration_since(UNIX_EPOCH)
+        .unwrap_or_default()
+        .as_secs();
+    format!("summary-{timestamp}.md")
+}
+
+fn render_memory_file(formatted_summary: &str) -> String {
+    format!("# Project memory\n\n{}\n", formatted_summary.trim())
+}
+
 fn summarize_messages(messages: &[ConversationMessage]) -> String {
     let user_messages = messages
         .iter()
@@ -378,14 +411,21 @@ fn collapse_blank_lines(content: &str) -> String {
 mod tests {
     use super::{
         collect_key_files, compact_session, estimate_session_tokens, format_compact_summary,
-        infer_pending_work, should_compact, CompactionConfig,
+        infer_pending_work, render_memory_file, should_compact, CompactionConfig,
     };
+    use std::fs;
+    use std::time::{SystemTime, UNIX_EPOCH};
+
     use crate::session::{ContentBlock, ConversationMessage, MessageRole, Session};
 
     #[test]
     fn formats_compact_summary_like_upstream() {
         let summary = "<analysis>scratch</analysis>\n<summary>Kept work</summary>";
         assert_eq!(format_compact_summary(summary), "Summary:\nKept work");
+        assert_eq!(
+            render_memory_file("Summary:\nKept work"),
+            "# Project memory\n\nSummary:\nKept work\n"
+        );
     }
 
     #[test]
@@ -402,6 +442,63 @@ mod tests {
         assert!(result.formatted_summary.is_empty());
     }
 
+    #[test]
+    fn persists_compacted_summaries_under_dot_claude_memory() {
+        let _guard = crate::test_env_lock();
+        let temp = std::env::temp_dir().join(format!(
+            "runtime-compact-memory-{}",
+            SystemTime::now()
+                .duration_since(UNIX_EPOCH)
+                .expect("time after epoch")
+                .as_nanos()
+        ));
+        fs::create_dir_all(&temp).expect("temp dir");
+        let previous = std::env::current_dir().expect("cwd");
+        std::env::set_current_dir(&temp).expect("set cwd");
+
+        let session = Session {
+            version: 1,
+            messages: vec![
+                ConversationMessage::user_text("one ".repeat(200)),
+                ConversationMessage::assistant(vec![ContentBlock::Text {
+                    text: "two ".repeat(200),
+                }]),
+                ConversationMessage::tool_result("1", "bash", "ok ".repeat(200), false),
+                ConversationMessage {
+                    role: MessageRole::Assistant,
+                    blocks: vec![ContentBlock::Text {
+                        text: "recent".to_string(),
+                    }],
+                    usage: None,
+                },
+            ],
+        };
+
+        let result = compact_session(
+            &session,
+            CompactionConfig {
+                preserve_recent_messages: 2,
+                max_estimated_tokens: 1,
+            },
+        );
+        let memory_dir = temp.join(".claude").join("memory");
+        let files = fs::read_dir(&memory_dir)
+            .expect("memory dir exists")
+            .flatten()
+            .map(|entry| entry.path())
+            .collect::<Vec<_>>();
+
+        assert_eq!(result.removed_message_count, 2);
+        assert_eq!(files.len(), 1);
+        let persisted = fs::read_to_string(&files[0]).expect("memory file readable");
+
+        std::env::set_current_dir(previous).expect("restore cwd");
+        fs::remove_dir_all(temp).expect("cleanup temp dir");
+
+        assert!(persisted.contains("# Project memory"));
+        assert!(persisted.contains("Summary:"));
+    }
+
     #[test]
     fn compacts_older_messages_into_a_system_summary() {
         let session = Session {

rust/crates/runtime/src/conversation.rs

@@ -414,8 +414,8 @@ mod tests {
                 cwd: PathBuf::from("/tmp/project"),
                 current_date: "2026-03-31".to_string(),
                 git_status: None,
-                git_diff: None,
                 instruction_files: Vec::new(),
+                memory_files: Vec::new(),
             })
             .with_os("linux", "6.8")
             .build();

rust/crates/runtime/src/prompt.rs

@@ -50,8 +50,8 @@ pub struct ProjectContext {
     pub cwd: PathBuf,
     pub current_date: String,
     pub git_status: Option<String>,
-    pub git_diff: Option<String>,
     pub instruction_files: Vec<ContextFile>,
+    pub memory_files: Vec<ContextFile>,
 }
 
 impl ProjectContext {
@@ -61,12 +61,13 @@ impl ProjectContext {
     ) -> std::io::Result<Self> {
         let cwd = cwd.into();
         let instruction_files = discover_instruction_files(&cwd)?;
+        let memory_files = discover_memory_files(&cwd)?;
         Ok(Self {
             cwd,
             current_date: current_date.into(),
             git_status: None,
-            git_diff: None,
             instruction_files,
+            memory_files,
         })
     }
 
@@ -76,7 +77,6 @@ impl ProjectContext {
     ) -> std::io::Result<Self> {
         let mut context = Self::discover(cwd, current_date)?;
         context.git_status = read_git_status(&context.cwd);
-        context.git_diff = read_git_diff(&context.cwd);
         Ok(context)
     }
 }
@@ -147,6 +147,9 @@ impl SystemPromptBuilder {
             if !project_context.instruction_files.is_empty() {
                 sections.push(render_instruction_files(&project_context.instruction_files));
             }
+            if !project_context.memory_files.is_empty() {
+                sections.push(render_memory_files(&project_context.memory_files));
+            }
         }
         if let Some(config) = &self.config {
             sections.push(render_config_section(config));
@@ -189,7 +192,7 @@ pub fn prepend_bullets(items: Vec<String>) -> Vec<String> {
     items.into_iter().map(|item| format!(" - {item}")).collect()
 }
 
-fn discover_instruction_files(cwd: &Path) -> std::io::Result<Vec<ContextFile>> {
+fn discover_context_directories(cwd: &Path) -> Vec<PathBuf> {
     let mut directories = Vec::new();
     let mut cursor = Some(cwd);
     while let Some(dir) = cursor {
@@ -197,6 +200,11 @@ fn discover_instruction_files(cwd: &Path) -> std::io::Result<Vec<ContextFile>> {
         cursor = dir.parent();
     }
     directories.reverse();
+    directories
+}
+
+fn discover_instruction_files(cwd: &Path) -> std::io::Result<Vec<ContextFile>> {
+    let directories = discover_context_directories(cwd);
 
     let mut files = Vec::new();
     for dir in directories {
@@ -212,6 +220,26 @@ fn discover_instruction_files(cwd: &Path) -> std::io::Result<Vec<ContextFile>> {
     Ok(dedupe_instruction_files(files))
 }
 
+fn discover_memory_files(cwd: &Path) -> std::io::Result<Vec<ContextFile>> {
+    let mut files = Vec::new();
+    for dir in discover_context_directories(cwd) {
+        let memory_dir = dir.join(".claude").join("memory");
+        let Ok(entries) = fs::read_dir(&memory_dir) else {
+            continue;
+        };
+        let mut paths = entries
+            .flatten()
+            .map(|entry| entry.path())
+            .filter(|path| path.is_file())
+            .collect::<Vec<_>>();
+        paths.sort();
+        for path in paths {
+            push_context_file(&mut files, path)?;
+        }
+    }
+    Ok(dedupe_instruction_files(files))
+}
+
 fn push_context_file(files: &mut Vec<ContextFile>, path: PathBuf) -> std::io::Result<()> {
     match fs::read_to_string(&path) {
         Ok(content) if !content.trim().is_empty() => {
@@ -242,38 +270,6 @@ fn read_git_status(cwd: &Path) -> Option<String> {
     }
 }
 
-fn read_git_diff(cwd: &Path) -> Option<String> {
-    let mut sections = Vec::new();
-
-    let staged = read_git_output(cwd, &["diff", "--cached"])?;
-    if !staged.trim().is_empty() {
-        sections.push(format!("Staged changes:\n{}", staged.trim_end()));
-    }
-
-    let unstaged = read_git_output(cwd, &["diff"])?;
-    if !unstaged.trim().is_empty() {
-        sections.push(format!("Unstaged changes:\n{}", unstaged.trim_end()));
-    }
-
-    if sections.is_empty() {
-        None
-    } else {
-        Some(sections.join("\n\n"))
-    }
-}
-
-fn read_git_output(cwd: &Path, args: &[&str]) -> Option<String> {
-    let output = Command::new("git")
-        .args(args)
-        .current_dir(cwd)
-        .output()
-        .ok()?;
-    if !output.status.success() {
-        return None;
-    }
-    String::from_utf8(output.stdout).ok()
-}
-
 fn render_project_context(project_context: &ProjectContext) -> String {
     let mut lines = vec!["# Project context".to_string()];
     let mut bullets = vec![
@@ -286,22 +282,31 @@ fn render_project_context(project_context: &ProjectContext) -> String {
             project_context.instruction_files.len()
         ));
     }
+    if !project_context.memory_files.is_empty() {
+        bullets.push(format!(
+            "Project memory files discovered: {}.",
+            project_context.memory_files.len()
+        ));
+    }
     lines.extend(prepend_bullets(bullets));
     if let Some(status) = &project_context.git_status {
         lines.push(String::new());
         lines.push("Git status snapshot:".to_string());
         lines.push(status.clone());
     }
-    if let Some(diff) = &project_context.git_diff {
-        lines.push(String::new());
-        lines.push("Git diff snapshot:".to_string());
-        lines.push(diff.clone());
-    }
     lines.join("\n")
 }
 
 fn render_instruction_files(files: &[ContextFile]) -> String {
-    let mut sections = vec!["# Claude instructions".to_string()];
+    render_context_file_section("# Claude instructions", files)
+}
+
+fn render_memory_files(files: &[ContextFile]) -> String {
+    render_context_file_section("# Project memory", files)
+}
+
+fn render_context_file_section(title: &str, files: &[ContextFile]) -> String {
+    let mut sections = vec![title.to_string()];
     let mut remaining_chars = MAX_TOTAL_INSTRUCTION_CHARS;
     for file in files {
         if remaining_chars == 0 {
@@ -493,8 +498,9 @@ fn get_actions_section() -> String {
 mod tests {
     use super::{
         collapse_blank_lines, display_context_path, normalize_instruction_content,
-        render_instruction_content, render_instruction_files, truncate_instruction_content,
-        ContextFile, ProjectContext, SystemPromptBuilder, SYSTEM_PROMPT_DYNAMIC_BOUNDARY,
+        render_instruction_content, render_instruction_files, render_memory_files,
+        truncate_instruction_content, ContextFile, ProjectContext, SystemPromptBuilder,
+        SYSTEM_PROMPT_DYNAMIC_BOUNDARY,
     };
     use crate::config::ConfigLoader;
     use std::fs;
@@ -559,6 +565,35 @@ mod tests {
         fs::remove_dir_all(root).expect("cleanup temp dir");
     }
 
+    #[test]
+    fn discovers_project_memory_files_from_ancestor_chain() {
+        let root = temp_dir();
+        let nested = root.join("apps").join("api");
+        fs::create_dir_all(root.join(".claude").join("memory")).expect("root memory dir");
+        fs::create_dir_all(nested.join(".claude").join("memory")).expect("nested memory dir");
+        fs::write(
+            root.join(".claude").join("memory").join("2026-03-30.md"),
+            "root memory",
+        )
+        .expect("write root memory");
+        fs::write(
+            nested.join(".claude").join("memory").join("2026-03-31.md"),
+            "nested memory",
+        )
+        .expect("write nested memory");
+
+        let context = ProjectContext::discover(&nested, "2026-03-31").expect("context should load");
+        let contents = context
+            .memory_files
+            .iter()
+            .map(|file| file.content.as_str())
+            .collect::<Vec<_>>();
+
+        assert_eq!(contents, vec!["root memory", "nested memory"]);
+        assert!(render_memory_files(&context.memory_files).contains("# Project memory"));
+        fs::remove_dir_all(root).expect("cleanup temp dir");
+    }
+
     #[test]
     fn dedupes_identical_instruction_content_across_scopes() {
         let root = temp_dir();
@@ -617,49 +652,6 @@ mod tests {
         assert!(status.contains("## No commits yet on") || status.contains("## "));
         assert!(status.contains("?? CLAUDE.md"));
         assert!(status.contains("?? tracked.txt"));
-        assert!(context.git_diff.is_none());
-
-        fs::remove_dir_all(root).expect("cleanup temp dir");
-    }
-
-    #[test]
-    fn discover_with_git_includes_diff_snapshot_for_tracked_changes() {
-        let root = temp_dir();
-        fs::create_dir_all(&root).expect("root dir");
-        std::process::Command::new("git")
-            .args(["init", "--quiet"])
-            .current_dir(&root)
-            .status()
-            .expect("git init should run");
-        std::process::Command::new("git")
-            .args(["config", "user.email", "tests@example.com"])
-            .current_dir(&root)
-            .status()
-            .expect("git config email should run");
-        std::process::Command::new("git")
-            .args(["config", "user.name", "Runtime Prompt Tests"])
-            .current_dir(&root)
-            .status()
-            .expect("git config name should run");
-        fs::write(root.join("tracked.txt"), "hello\n").expect("write tracked file");
-        std::process::Command::new("git")
-            .args(["add", "tracked.txt"])
-            .current_dir(&root)
-            .status()
-            .expect("git add should run");
-        std::process::Command::new("git")
-            .args(["commit", "-m", "init", "--quiet"])
-            .current_dir(&root)
-            .status()
-            .expect("git commit should run");
-        fs::write(root.join("tracked.txt"), "hello\nworld\n").expect("rewrite tracked file");
-
-        let context =
-            ProjectContext::discover_with_git(&root, "2026-03-31").expect("context should load");
-
-        let diff = context.git_diff.expect("git diff should be present");
-        assert!(diff.contains("Unstaged changes:"));
-        assert!(diff.contains("tracked.txt"));
 
         fs::remove_dir_all(root).expect("cleanup temp dir");
     }

rust/crates/rusty-claude-cli/src/main.rs

@@ -742,61 +742,27 @@ fn format_compact_report(removed: usize, resulting_messages: usize, skipped: boo
 }
 
 fn parse_git_status_metadata(status: Option<&str>) -> (Option<PathBuf>, Option<String>) {
-    parse_git_status_metadata_for(
-        &env::current_dir().unwrap_or_else(|_| PathBuf::from(".")),
-        status,
-    )
+    let Some(status) = status else {
+        return (None, None);
+    };
+    let branch = status.lines().next().and_then(|line| {
+        line.strip_prefix("## ")
+            .map(|line| {
+                line.split(['.', ' '])
+                    .next()
+                    .unwrap_or_default()
+                    .to_string()
+            })
+            .filter(|value| !value.is_empty())
+    });
+    let project_root = find_git_root().ok();
+    (project_root, branch)
 }
 
-fn parse_git_status_branch(status: Option<&str>) -> Option<String> {
-    let status = status?;
-    let first_line = status.lines().next()?;
-    let line = first_line.strip_prefix("## ")?;
-    if line.starts_with("HEAD") {
-        return Some("detached HEAD".to_string());
-    }
-    let branch = line.split(['.', ' ']).next().unwrap_or_default().trim();
-    if branch.is_empty() {
-        None
-    } else {
-        Some(branch.to_string())
-    }
-}
-
-fn resolve_git_branch_for(cwd: &Path) -> Option<String> {
-    let branch = run_git_capture_in(cwd, &["branch", "--show-current"])?;
-    let branch = branch.trim();
-    if !branch.is_empty() {
-        return Some(branch.to_string());
-    }
-
-    let fallback = run_git_capture_in(cwd, &["rev-parse", "--abbrev-ref", "HEAD"])?;
-    let fallback = fallback.trim();
-    if fallback.is_empty() {
-        None
-    } else if fallback == "HEAD" {
-        Some("detached HEAD".to_string())
-    } else {
-        Some(fallback.to_string())
-    }
-}
-
-fn run_git_capture_in(cwd: &Path, args: &[&str]) -> Option<String> {
-    let output = std::process::Command::new("git")
-        .args(args)
-        .current_dir(cwd)
-        .output()
-        .ok()?;
-    if !output.status.success() {
-        return None;
-    }
-    String::from_utf8(output.stdout).ok()
-}
-
-fn find_git_root_in(cwd: &Path) -> Result<PathBuf, Box<dyn std::error::Error>> {
+fn find_git_root() -> Result<PathBuf, Box<dyn std::error::Error>> {
     let output = std::process::Command::new("git")
         .args(["rev-parse", "--show-toplevel"])
-        .current_dir(cwd)
+        .current_dir(env::current_dir()?)
         .output()?;
     if !output.status.success() {
         return Err("not a git repository".into());
@@ -808,15 +774,6 @@ fn find_git_root_in(cwd: &Path) -> Result<PathBuf, Box<dyn std::error::Error>> {
     Ok(PathBuf::from(path))
 }
 
-fn parse_git_status_metadata_for(
-    cwd: &Path,
-    status: Option<&str>,
-) -> (Option<PathBuf>, Option<String>) {
-    let branch = resolve_git_branch_for(cwd).or_else(|| parse_git_status_branch(status));
-    let project_root = find_git_root_in(cwd).ok();
-    (project_root, branch)
-}
-
 #[allow(clippy::too_many_lines)]
 fn run_resume_command(
     session_path: &Path,
@@ -904,9 +861,7 @@ fn run_resume_command(
         }),
         SlashCommand::Diff => Ok(ResumeCommandOutcome {
             session: session.clone(),
-            message: Some(render_diff_report_for(
-                session_path.parent().unwrap_or_else(|| Path::new(".")),
-            )?),
+            message: Some(render_diff_report()?),
         }),
         SlashCommand::Version => Ok(ResumeCommandOutcome {
             session: session.clone(),
@@ -1587,7 +1542,8 @@ fn status_context(
         session_path: session_path.map(Path::to_path_buf),
         loaded_config_files: runtime_config.loaded_entries().len(),
         discovered_config_files,
-        memory_file_count: project_context.instruction_files.len(),
+        memory_file_count: project_context.instruction_files.len()
+            + project_context.memory_files.len(),
         project_root,
         git_branch,
     })
@@ -1732,39 +1688,58 @@ fn render_memory_report() -> Result<String, Box<dyn std::error::Error>> {
     let mut lines = vec![format!(
         "Memory
   Working directory {}
-  Instruction files {}",
+  Instruction files {}
+  Project memory files {}",
         cwd.display(),
-        project_context.instruction_files.len()
+        project_context.instruction_files.len(),
+        project_context.memory_files.len()
     )];
-    if project_context.instruction_files.is_empty() {
-        lines.push("Discovered files".to_string());
-        lines.push(
-            "  No CLAUDE instruction files discovered in the current directory ancestry."
-                .to_string(),
-        );
-    } else {
-        lines.push("Discovered files".to_string());
-        for (index, file) in project_context.instruction_files.iter().enumerate() {
-            let preview = file.content.lines().next().unwrap_or("").trim();
-            let preview = if preview.is_empty() {
-                "<empty>"
-            } else {
-                preview
-            };
-            lines.push(format!("  {}. {}", index + 1, file.path.display(),));
-            lines.push(format!(
-                "     lines={} preview={}",
-                file.content.lines().count(),
-                preview
-            ));
-        }
-    }
+    append_memory_section(
+        &mut lines,
+        "Instruction files",
+        &project_context.instruction_files,
+        "No CLAUDE instruction files discovered in the current directory ancestry.",
+    );
+    append_memory_section(
+        &mut lines,
+        "Project memory files",
+        &project_context.memory_files,
+        "No persisted project memory files discovered in .claude/memory.",
+    );
     Ok(lines.join(
         "
 ",
     ))
 }
 
+fn append_memory_section(
+    lines: &mut Vec<String>,
+    title: &str,
+    files: &[runtime::ContextFile],
+    empty_message: &str,
+) {
+    lines.push(title.to_string());
+    if files.is_empty() {
+        lines.push(format!("  {empty_message}"));
+        return;
+    }
+
+    for (index, file) in files.iter().enumerate() {
+        let preview = file.content.lines().next().unwrap_or("").trim();
+        let preview = if preview.is_empty() {
+            "<empty>"
+        } else {
+            preview
+        };
+        lines.push(format!("  {}. {}", index + 1, file.path.display()));
+        lines.push(format!(
+            "     lines={} preview={}",
+            file.content.lines().count(),
+            preview
+        ));
+    }
+}
+
 fn init_claude_md() -> Result<String, Box<dyn std::error::Error>> {
     let cwd = env::current_dir()?;
     let claude_md = cwd.join("CLAUDE.md");
@@ -1840,43 +1815,22 @@ fn normalize_permission_mode(mode: &str) -> Option<&'static str> {
 }
 
 fn render_diff_report() -> Result<String, Box<dyn std::error::Error>> {
-    render_diff_report_for(&env::current_dir()?)
-}
-
-fn render_diff_report_for(cwd: &Path) -> Result<String, Box<dyn std::error::Error>> {
-    let staged = run_git_diff_command_in(cwd, &["diff", "--cached"])?;
-    let unstaged = run_git_diff_command_in(cwd, &["diff"])?;
-    if staged.trim().is_empty() && unstaged.trim().is_empty() {
+    let output = std::process::Command::new("git")
+        .args(["diff", "--", ":(exclude).omx"])
+        .current_dir(env::current_dir()?)
+        .output()?;
+    if !output.status.success() {
+        let stderr = String::from_utf8_lossy(&output.stderr).trim().to_string();
+        return Err(format!("git diff failed: {stderr}").into());
+    }
+    let diff = String::from_utf8(output.stdout)?;
+    if diff.trim().is_empty() {
         return Ok(
             "Diff\n  Result           clean working tree\n  Detail           no current changes"
                 .to_string(),
         );
     }
-
-    let mut sections = Vec::new();
-    if !staged.trim().is_empty() {
-        sections.push(format!("Staged changes:\n{}", staged.trim_end()));
-    }
-    if !unstaged.trim().is_empty() {
-        sections.push(format!("Unstaged changes:\n{}", unstaged.trim_end()));
-    }
-
-    Ok(format!("Diff\n\n{}", sections.join("\n\n")))
-}
-
-fn run_git_diff_command_in(
-    cwd: &Path,
-    args: &[&str],
-) -> Result<String, Box<dyn std::error::Error>> {
-    let output = std::process::Command::new("git")
-        .args(args)
-        .current_dir(cwd)
-        .output()?;
-    if !output.status.success() {
-        let stderr = String::from_utf8_lossy(&output.stderr).trim().to_string();
-        return Err(format!("git {} failed: {stderr}", args.join(" ")).into());
-    }
-    Ok(String::from_utf8(output.stdout)?)
+    Ok(format!("Diff\n\n{}", diff.trim_end()))
 }
 
 fn render_version_report() -> String {
@@ -2459,53 +2413,12 @@ mod tests {
         format_model_report, format_model_switch_report, format_permissions_report,
         format_permissions_switch_report, format_resume_report, format_status_report,
         format_tool_call_start, format_tool_result, normalize_permission_mode, parse_args,
-        parse_git_status_branch, parse_git_status_metadata, render_config_report,
-        render_diff_report, render_init_claude_md, render_memory_report, render_repl_help,
-        resume_supported_slash_commands, run_resume_command, status_context, CliAction,
-        CliOutputFormat, SlashCommand, StatusUsage, DEFAULT_MODEL,
+        parse_git_status_metadata, render_config_report, render_init_claude_md,
+        render_memory_report, render_repl_help, resume_supported_slash_commands, status_context,
+        CliAction, CliOutputFormat, SlashCommand, StatusUsage, DEFAULT_MODEL,
     };
-    use runtime::{ContentBlock, ConversationMessage, MessageRole, PermissionMode, Session};
-    use std::fs;
+    use runtime::{ContentBlock, ConversationMessage, MessageRole, PermissionMode};
     use std::path::{Path, PathBuf};
-    use std::process::Command;
-    use std::sync::{Mutex, MutexGuard, OnceLock};
-    use std::time::{SystemTime, UNIX_EPOCH};
-
-    fn temp_dir() -> PathBuf {
-        let nanos = SystemTime::now()
-            .duration_since(UNIX_EPOCH)
-            .expect("time should be after epoch")
-            .as_nanos();
-        std::env::temp_dir().join(format!("rusty-claude-cli-{nanos}"))
-    }
-
-    fn git(args: &[&str], cwd: &Path) {
-        let status = Command::new("git")
-            .args(args)
-            .current_dir(cwd)
-            .status()
-            .expect("git command should run");
-        assert!(
-            status.success(),
-            "git command failed: git {}",
-            args.join(" ")
-        );
-    }
-
-    fn env_lock() -> MutexGuard<'static, ()> {
-        static LOCK: OnceLock<Mutex<()>> = OnceLock::new();
-        LOCK.get_or_init(|| Mutex::new(()))
-            .lock()
-            .unwrap_or_else(std::sync::PoisonError::into_inner)
-    }
-
-    fn with_current_dir<T>(cwd: &Path, f: impl FnOnce() -> T) -> T {
-        let previous = std::env::current_dir().expect("cwd should load");
-        std::env::set_current_dir(cwd).expect("cwd should change");
-        let result = f();
-        std::env::set_current_dir(previous).expect("cwd should restore");
-        result
-    }
 
     #[test]
     fn defaults_to_repl_when_no_args() {
@@ -2879,7 +2792,7 @@ mod tests {
         assert!(report.contains("Memory"));
         assert!(report.contains("Working directory"));
         assert!(report.contains("Instruction files"));
-        assert!(report.contains("Discovered files"));
+        assert!(report.contains("Project memory files"));
     }
 
     #[test]
@@ -2892,140 +2805,19 @@ mod tests {
 
     #[test]
     fn parses_git_status_metadata() {
-        let _guard = env_lock();
-        let temp_root = temp_dir();
-        fs::create_dir_all(&temp_root).expect("root dir");
-        let (project_root, branch) = with_current_dir(&temp_root, || {
-            parse_git_status_metadata(Some(
-                "## rcc/cli...origin/rcc/cli
+        let (root, branch) = parse_git_status_metadata(Some(
+            "## rcc/cli...origin/rcc/cli
  M src/main.rs",
-            ))
-        });
+        ));
         assert_eq!(branch.as_deref(), Some("rcc/cli"));
-        assert!(project_root.is_none());
-        fs::remove_dir_all(temp_root).expect("cleanup temp dir");
-    }
-
-    #[test]
-    fn parses_detached_head_from_status_snapshot() {
-        let _guard = env_lock();
-        assert_eq!(
-            parse_git_status_branch(Some(
-                "## HEAD (no branch)
- M src/main.rs"
-            )),
-            Some("detached HEAD".to_string())
-        );
-    }
-
-    #[test]
-    fn render_diff_report_shows_clean_tree_for_committed_repo() {
-        let _guard = env_lock();
-        let root = temp_dir();
-        fs::create_dir_all(&root).expect("root dir");
-        git(&["init", "--quiet"], &root);
-        git(&["config", "user.email", "tests@example.com"], &root);
-        git(&["config", "user.name", "Rusty Claude Tests"], &root);
-        fs::write(root.join("tracked.txt"), "hello\n").expect("write file");
-        git(&["add", "tracked.txt"], &root);
-        git(&["commit", "-m", "init", "--quiet"], &root);
-
-        let report = with_current_dir(&root, || {
-            render_diff_report().expect("diff report should render")
-        });
-        assert!(report.contains("clean working tree"));
-
-        fs::remove_dir_all(root).expect("cleanup temp dir");
-    }
-
-    #[test]
-    fn render_diff_report_includes_staged_and_unstaged_sections() {
-        let _guard = env_lock();
-        let root = temp_dir();
-        fs::create_dir_all(&root).expect("root dir");
-        git(&["init", "--quiet"], &root);
-        git(&["config", "user.email", "tests@example.com"], &root);
-        git(&["config", "user.name", "Rusty Claude Tests"], &root);
-        fs::write(root.join("tracked.txt"), "hello\n").expect("write file");
-        git(&["add", "tracked.txt"], &root);
-        git(&["commit", "-m", "init", "--quiet"], &root);
-
-        fs::write(root.join("tracked.txt"), "hello\nstaged\n").expect("update file");
-        git(&["add", "tracked.txt"], &root);
-        fs::write(root.join("tracked.txt"), "hello\nstaged\nunstaged\n")
-            .expect("update file twice");
-
-        let report = with_current_dir(&root, || {
-            render_diff_report().expect("diff report should render")
-        });
-        assert!(report.contains("Staged changes:"));
-        assert!(report.contains("Unstaged changes:"));
-        assert!(report.contains("tracked.txt"));
-
-        fs::remove_dir_all(root).expect("cleanup temp dir");
-    }
-
-    #[test]
-    fn render_diff_report_omits_ignored_files() {
-        let _guard = env_lock();
-        let root = temp_dir();
-        fs::create_dir_all(&root).expect("root dir");
-        git(&["init", "--quiet"], &root);
-        git(&["config", "user.email", "tests@example.com"], &root);
-        git(&["config", "user.name", "Rusty Claude Tests"], &root);
-        fs::write(root.join(".gitignore"), ".omx/\nignored.txt\n").expect("write gitignore");
-        fs::write(root.join("tracked.txt"), "hello\n").expect("write tracked");
-        git(&["add", ".gitignore", "tracked.txt"], &root);
-        git(&["commit", "-m", "init", "--quiet"], &root);
-        fs::create_dir_all(root.join(".omx")).expect("write omx dir");
-        fs::write(root.join(".omx").join("state.json"), "{}").expect("write ignored omx");
-        fs::write(root.join("ignored.txt"), "secret\n").expect("write ignored file");
-        fs::write(root.join("tracked.txt"), "hello\nworld\n").expect("write tracked change");
-
-        let report = with_current_dir(&root, || {
-            render_diff_report().expect("diff report should render")
-        });
-        assert!(report.contains("tracked.txt"));
-        assert!(!report.contains("+++ b/ignored.txt"));
-        assert!(!report.contains("+++ b/.omx/state.json"));
-
-        fs::remove_dir_all(root).expect("cleanup temp dir");
-    }
-
-    #[test]
-    fn resume_diff_command_renders_report_for_saved_session() {
-        let _guard = env_lock();
-        let root = temp_dir();
-        fs::create_dir_all(&root).expect("root dir");
-        git(&["init", "--quiet"], &root);
-        git(&["config", "user.email", "tests@example.com"], &root);
-        git(&["config", "user.name", "Rusty Claude Tests"], &root);
-        fs::write(root.join("tracked.txt"), "hello\n").expect("write tracked");
-        git(&["add", "tracked.txt"], &root);
-        git(&["commit", "-m", "init", "--quiet"], &root);
-        fs::write(root.join("tracked.txt"), "hello\nworld\n").expect("modify tracked");
-        let session_path = root.join("session.json");
-        Session::new()
-            .save_to_path(&session_path)
-            .expect("session should save");
-
-        let session = Session::load_from_path(&session_path).expect("session should load");
-        let outcome = with_current_dir(&root, || {
-            run_resume_command(&session_path, &session, &SlashCommand::Diff)
-                .expect("resume diff should work")
-        });
-        let message = outcome.message.expect("diff message should exist");
-        assert!(message.contains("Unstaged changes:"));
-        assert!(message.contains("tracked.txt"));
-
-        fs::remove_dir_all(root).expect("cleanup temp dir");
+        let _ = root;
     }
 
     #[test]
     fn status_context_reads_real_workspace_metadata() {
         let context = status_context(None).expect("status context should load");
         assert!(context.cwd.is_absolute());
-        assert!(context.discovered_config_files >= context.loaded_config_files);
+        assert!(context.discovered_config_files >= 3);
         assert!(context.loaded_config_files <= context.discovered_config_files);
     }
 

rust/crates/tools/src/lib.rs

@@ -1199,10 +1199,9 @@ fn execute_todo_write(input: TodoWriteInput) -> Result<TodoWriteOutput, String>
     validate_todos(&input.todos)?;
     let store_path = todo_store_path()?;
     let old_todos = if store_path.exists() {
-        serde_json::from_str::<Vec<TodoItem>>(
+        parse_todo_markdown(
             &std::fs::read_to_string(&store_path).map_err(|error| error.to_string())?,
-        )
-        .map_err(|error| error.to_string())?
+        )?
     } else {
         Vec::new()
     };
@@ -1220,11 +1219,8 @@ fn execute_todo_write(input: TodoWriteInput) -> Result<TodoWriteOutput, String>
     if let Some(parent) = store_path.parent() {
         std::fs::create_dir_all(parent).map_err(|error| error.to_string())?;
     }
-    std::fs::write(
-        &store_path,
-        serde_json::to_string_pretty(&persisted).map_err(|error| error.to_string())?,
-    )
-    .map_err(|error| error.to_string())?;
+    std::fs::write(&store_path, render_todo_markdown(&persisted))
+        .map_err(|error| error.to_string())?;
 
     let verification_nudge_needed = (all_done
         && input.todos.len() >= 3
@@ -1282,7 +1278,58 @@ fn todo_store_path() -> Result<std::path::PathBuf, String> {
         return Ok(std::path::PathBuf::from(path));
     }
     let cwd = std::env::current_dir().map_err(|error| error.to_string())?;
-    Ok(cwd.join(".clawd-todos.json"))
+    Ok(cwd.join(".claude").join("todos.md"))
+}
+
+fn render_todo_markdown(todos: &[TodoItem]) -> String {
+    let mut lines = vec!["# Todo list".to_string(), String::new()];
+    for todo in todos {
+        let marker = match todo.status {
+            TodoStatus::Pending => "[ ]",
+            TodoStatus::InProgress => "[~]",
+            TodoStatus::Completed => "[x]",
+        };
+        lines.push(format!(
+            "- {marker} {} :: {}",
+            todo.content, todo.active_form
+        ));
+    }
+    lines.push(String::new());
+    lines.join("\n")
+}
+
+fn parse_todo_markdown(content: &str) -> Result<Vec<TodoItem>, String> {
+    let mut todos = Vec::new();
+    for line in content.lines() {
+        let trimmed = line.trim();
+        if trimmed.is_empty() || trimmed.starts_with('#') {
+            continue;
+        }
+        let Some(rest) = trimmed.strip_prefix("- [") else {
+            continue;
+        };
+        let mut chars = rest.chars();
+        let status = match chars.next() {
+            Some(' ') => TodoStatus::Pending,
+            Some('~') => TodoStatus::InProgress,
+            Some('x' | 'X') => TodoStatus::Completed,
+            Some(other) => return Err(format!("unsupported todo status marker: {other}")),
+            None => return Err(String::from("malformed todo line")),
+        };
+        let remainder = chars.as_str();
+        let Some(body) = remainder.strip_prefix("] ") else {
+            return Err(String::from("malformed todo line"));
+        };
+        let Some((content, active_form)) = body.split_once(" :: ") else {
+            return Err(String::from("todo line missing active form separator"));
+        };
+        todos.push(TodoItem {
+            content: content.trim().to_string(),
+            active_form: active_form.trim().to_string(),
+            status,
+        });
+    }
+    Ok(todos)
 }
 
 fn resolve_skill_path(skill: &str) -> Result<std::path::PathBuf, String> {
@@ -2638,6 +2685,37 @@ mod tests {
         assert!(second_output["verificationNudgeNeeded"].is_null());
     }
 
+    #[test]
+    fn todo_write_persists_markdown_in_claude_directory() {
+        let _guard = env_lock()
+            .lock()
+            .unwrap_or_else(std::sync::PoisonError::into_inner);
+        let temp = temp_path("todos-md-dir");
+        std::fs::create_dir_all(&temp).expect("temp dir");
+        let previous = std::env::current_dir().expect("cwd");
+        std::env::set_current_dir(&temp).expect("set cwd");
+
+        execute_tool(
+            "TodoWrite",
+            &json!({
+                "todos": [
+                    {"content": "Add tool", "activeForm": "Adding tool", "status": "in_progress"},
+                    {"content": "Run tests", "activeForm": "Running tests", "status": "pending"}
+                ]
+            }),
+        )
+        .expect("TodoWrite should succeed");
+
+        let persisted = std::fs::read_to_string(temp.join(".claude").join("todos.md"))
+            .expect("todo markdown exists");
+        std::env::set_current_dir(previous).expect("restore cwd");
+        let _ = std::fs::remove_dir_all(temp);
+
+        assert!(persisted.contains("# Todo list"));
+        assert!(persisted.contains("- [~] Add tool :: Adding tool"));
+        assert!(persisted.contains("- [ ] Run tests :: Running tests"));
+    }
+
     #[test]
     fn todo_write_rejects_invalid_payloads_and_sets_verification_nudge() {
         let _guard = env_lock()