Continue.dev: The Open-Source AI Coding Assistant Complete Guide 2026

Photo by Negative Space on Unsplash

GitHub Copilot and Cursor get most of the headlines, but developers who value openness, privacy, and model flexibility are increasingly turning to Continue.dev — the fully open-source AI coding assistant. In 2026, Continue has matured into a powerful, extensible platform that runs in VS Code and JetBrains with support for virtually any AI model.

What is Continue.dev?

Continue is an open-source AI code assistant that integrates directly into your IDE. Unlike proprietary tools, Continue:

• Is completely open source (Apache 2.0 license)
• Lets you connect to any AI model — local or cloud
• Stores no code on external servers by default
• Supports custom context providers, slash commands, and prompts
• Works in VS Code and all JetBrains IDEs

Key Differentiators

Installation

VS Code

1. Open VS Code Extensions panel (Ctrl+Shift+X)
2. Search for “Continue”
3. Click Install
4. Continue icon appears in the left sidebar

JetBrains

1. Open Settings → Plugins → Marketplace
2. Search for “Continue”
3. Install and restart IDE

Connecting Your First Model

After installation, Continue prompts you to configure a model. The easiest starting point:

// ~/.continue/config.json
{
  "models": [
    {
      "title": "Claude 3.5 Sonnet",
      "provider": "anthropic",
      "model": "claude-3-5-sonnet-20241022",
      "apiKey": "your-anthropic-api-key"
    }
  ]
}

Core Features

1. Chat in Sidebar

Open the Continue panel and chat with your AI model in context. Highlight code in your editor and press Cmd+L (Mac) or Ctrl+L (Windows) to add it to the chat context automatically.

2. Inline Edit (Cmd+I / Ctrl+I)

Highlight any code block, press Cmd+I, and describe what you want. Continue generates a diff and you accept or reject it — similar to Cursor’s inline edit.

3. Tab Autocomplete

Continue provides multi-line tab completion powered by your configured model. For best results with autocomplete, use a fast local model like Qwen2.5-Coder via Ollama.

4. Custom Context Providers

Context providers extend what Continue “knows” when answering:

• @file — Add a specific file to context
• @folder — Add an entire folder
• @git-diff — Add the current staged diff
• @terminal — Add recent terminal output
• @docs — Index and query your project documentation
• @web — Live web search results

5. Slash Commands

Create custom slash commands for repetitive tasks:

{
  "slashCommands": [
    {
      "name": "tests",
      "description": "Generate unit tests for highlighted code",
      "prompt": "Write comprehensive unit tests for the following code using the project's test framework: }"
    }
  ]
}

Using Local Models (Privacy Mode)

One of Continue’s biggest advantages is local model support via Ollama, LM Studio, or llama.cpp. No code ever leaves your machine.

Setup with Ollama

# Install Ollama
brew install ollama  # macOS

# Pull a coding model
ollama pull qwen2.5-coder:7b

# Start Ollama server
ollama serve

Then configure Continue:

{
  "models": [
    {
      "title": "Qwen2.5-Coder 7B (Local)",
      "provider": "ollama",
      "model": "qwen2.5-coder:7b"
    }
  ],
  "tabAutocompleteModel": {
    "title": "Qwen2.5-Coder 7B",
    "provider": "ollama",
    "model": "qwen2.5-coder:7b"
  }
}

Recommended Local Models (2026)

Photo by Yancy Min on Unsplash

Advanced Configuration

Multi-Model Setup

Use different models for different tasks:

{
  "models": [
    {
      "title": "Claude 3.5 Sonnet (Chat)",
      "provider": "anthropic",
      "model": "claude-3-5-sonnet-20241022",
      "apiKey": "..."
    },
    {
      "title": "GPT-4o (Chat)",
      "provider": "openai",
      "model": "gpt-4o",
      "apiKey": "..."
    }
  ],
  "tabAutocompleteModel": {
    "title": "Qwen Local",
    "provider": "ollama",
    "model": "qwen2.5-coder:7b"
  }
}

Custom System Prompt

Add project-specific instructions:

{
  "systemMessage": "You are an expert TypeScript developer working on a Next.js 15 project using Prisma ORM and shadcn/ui components. Always follow the project's existing patterns."
}

Workflows & Tips

Efficient Code Review

1. Run git diff --staged in terminal
2. Use @terminal context to pull the diff into Continue
3. Ask: “Review this diff for bugs, performance issues, and style consistency”

Refactoring a Module

1. Select the module file(s) with @file
2. Describe the refactor goal
3. Continue generates a plan — discuss it before applying

Learning a Codebase

1. Use @folder src/ to add the source tree
2. Ask “Explain the architecture of this project”
3. Ask follow-up questions to drill into specific parts

Continue vs. GitHub Copilot vs. Cursor

Choose Continue if:

• Privacy/security requirements prevent cloud model use
• You want to experiment with different models freely
• You’re budget-conscious and already pay for API access
• You prefer open-source and community-driven tools

Choose GitHub Copilot if:

• You want maximum integration with GitHub workflows
• Your team is already on GitHub Enterprise

Choose Cursor if:

• You want a purpose-built AI-first IDE experience
• You don’t mind paying for a polished all-in-one solution

The Bottom Line

Continue.dev is the best option for developers who want full control over their AI coding assistant. The open-source model, self-hosted option, and unlimited model flexibility make it uniquely powerful — especially for teams with strict data residency requirements. The setup takes a bit more effort than Copilot or Cursor, but the payoff in flexibility and privacy is well worth it.

Rating: 8.5/10 — Best open-source AI coding assistant in 2026

Using Continue.dev in your workflow? Share your config tips in the comments!