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+# Local Development
+
+## Running the Extension
+
+To run the extension locally for development:
+
+1.  From the root of the repository, install dependencies:
+    ```bash
+    npm install
+    ```
+2.  Open this directory (`packages/vscode-ide-companion`) in VS Code.
+3.  Compile the extension:
+    ```bash
+    npm run compile
+    ```
+4.  Press `F5` (fn+f5 on mac) to open a new Extension Development Host window with the extension running.
+
+To watch for changes and have the extension rebuild automatically, run:
+
+```bash
+npm run watch
+```
+
+## Running Tests
+
+To run the automated tests, run:
+
+```bash
+npm run test
+```