diff --git a/src/__init__.py b/src/__init__.py
index f0bb786..e3631e1 100644
--- a/src/__init__.py
+++ b/src/__init__.py
@@ -1,3 +1,6 @@
-"""Code Editor package."""
+#!/usr/bin/env python
+# -*- coding: utf-8 -*-
+
+"""AI-supported lightweight code editor package."""
 
 __version__ = "0.1.0"
diff --git a/src/chat_manager.py b/src/chat_manager.py
new file mode 100644
index 0000000..e2ace9c
--- /dev/null
+++ b/src/chat_manager.py
@@ -0,0 +1,281 @@
+#!/usr/bin/env python
+# -*- coding: utf-8 -*-
+
+"""Chat management module for the codeeditor application."""
+
+import logging
+import os
+import re
+from typing import Dict, List, Optional, Tuple
+
+import anthropic
+import openai
+from dotenv import load_dotenv
+
+from codeeditor.system_prompter import SystemPrompter
+
+# Load environment variables from .env file
+load_dotenv()
+
+logger = logging.getLogger(__name__)
+
+# Set up API keys
+OPENAI_API_KEY = os.getenv("OPENAI_API_KEY")
+ANTHROPIC_API_KEY = os.getenv("ANTHROPIC_API_KEY")
+AI_PROVIDER = os.getenv("AI_PROVIDER", "anthropic").lower()  # Default to Anthropic
+
+
+class ChatManager:
+    """Class for managing chat interactions with the AI assistant."""
+
+    def __init__(self):
+        """Initialize the ChatManager."""
+        self.system_prompter = SystemPrompter()
+        self.chat_history = []
+        self.current_file_path = None
+        self.current_file_content = None
+
+        # Initialize the appropriate client based on the provider
+        if AI_PROVIDER == "openai" and OPENAI_API_KEY:
+            self.provider = "openai"
+            self.model = os.getenv("OPENAI_MODEL", "gpt-4")
+            openai.api_key = OPENAI_API_KEY
+            logger.info("ChatManager initialized with OpenAI")
+        elif AI_PROVIDER == "anthropic" and ANTHROPIC_API_KEY:
+            self.provider = "anthropic"
+            self.model = os.getenv("ANTHROPIC_MODEL", "claude-3-opus-20240229")
+            self.client = anthropic.Anthropic(api_key=ANTHROPIC_API_KEY)
+            logger.info("ChatManager initialized with Anthropic")
+        else:
+            self.provider = "none"
+            logger.warning(
+                "No valid AI provider configured. Please set AI_PROVIDER and corresponding API key."
+            )
+
+    def send_message(
+        self, user_message: str, file_context: Optional[str] = None
+    ) -> str:
+        """Send a message to the AI assistant and get a response.
+
+        Args:
+            user_message: The user's message to send to the AI.
+            file_context: Optional context from the current file.
+
+        Returns:
+            The AI's response as a string.
+        """
+        try:
+            # Parse file context if provided
+            if file_context:
+                (
+                    self.current_file_path,
+                    self.current_file_content,
+                ) = self._parse_file_context(file_context)
+
+            # Check for special commands
+            if user_message.startswith("/"):
+                return self._handle_special_command(user_message)
+
+            # Generate system prompt with file context if provided
+            system_prompt = self.system_prompter.generate_prompt(file_context)
+
+            if self.provider == "openai":
+                return self._send_openai_message(system_prompt, user_message)
+            elif self.provider == "anthropic":
+                return self._send_anthropic_message(system_prompt, user_message)
+            else:
+                error_msg = (
+                    "No valid AI provider configured. Please check your .env file."
+                )
+                logger.error(error_msg)
+                return f"Error: {error_msg}"
+
+        except Exception as e:
+            error_msg = f"Error communicating with AI assistant: {e}"
+            logger.error(error_msg)
+            return f"Error: {error_msg}"
+
+    def _parse_file_context(self, file_context: str) -> Tuple[str, str]:
+        """Parse file context to extract file path and content.
+
+        Args:
+            file_context: File context string.
+
+        Returns:
+            Tuple of (file_path, file_content).
+        """
+        lines = file_context.split("\n", 1)
+        file_path = lines[0].replace("File: ", "").strip()
+        file_content = lines[1] if len(lines) > 1 else ""
+
+        return file_path, file_content
+
+    def _handle_special_command(self, command: str) -> str:
+        """Handle special commands starting with /.
+
+        Args:
+            command: The command string.
+
+        Returns:
+            Response to the command.
+        """
+        command = command.strip().lower()
+
+        # Handle improve code command
+        if command.startswith("/improve") and self.current_file_content:
+            prompt = self.system_prompter.generate_code_improvement_prompt(
+                self.current_file_content, self.current_file_path
+            )
+
+            if self.provider == "openai":
+                return self._send_openai_message(prompt, "Please improve this code.")
+            elif self.provider == "anthropic":
+                return self._send_anthropic_message(prompt, "Please improve this code.")
+
+        # Handle explain code command
+        elif command.startswith("/explain") and self.current_file_content:
+            return self._send_message_with_context(
+                "Please explain how this code works in detail.",
+                f"File: {self.current_file_path}\n{self.current_file_content}",
+            )
+
+        # Handle help command
+        elif command.startswith("/help"):
+            return (
+                "Available commands:\n"
+                "- /improve - Suggest improvements for the current file\n"
+                "- /explain - Explain how the current file's code works\n"
+                "- /help - Show this help message\n"
+                "- /clear - Clear the chat history"
+            )
+
+        # Handle clear command
+        elif command.startswith("/clear"):
+            self.clear_history()
+            return "Chat history cleared."
+
+        return f"Unknown command: {command}. Type /help for available commands."
+
+    def _send_message_with_context(self, message: str, context: str) -> str:
+        """Send a message with specific context.
+
+        Args:
+            message: The message to send.
+            context: The context to include.
+
+        Returns:
+            The AI's response.
+        """
+        system_prompt = self.system_prompter.generate_prompt(context)
+
+        if self.provider == "openai":
+            return self._send_openai_message(system_prompt, message)
+        elif self.provider == "anthropic":
+            return self._send_anthropic_message(system_prompt, message)
+        else:
+            return "No AI provider configured."
+
+    def _send_openai_message(self, system_prompt: str, user_message: str) -> str:
+        """Send a message using OpenAI API.
+
+        Args:
+            system_prompt: The system prompt to guide the AI.
+            user_message: The user's message.
+
+        Returns:
+            The AI's response as a string.
+        """
+        # Prepare messages for the API call
+        messages = [{"role": "system", "content": system_prompt}]
+
+        # Add chat history
+        for msg in self.chat_history:
+            messages.append(msg)
+
+        # Add the new user message
+        messages.append({"role": "user", "content": user_message})
+
+        # Call the OpenAI API
+        response = openai.chat.completions.create(
+            model=self.model,
+            messages=messages,
+            temperature=0.7,
+            max_tokens=2000,
+        )
+
+        # Extract the assistant's message
+        assistant_message = response.choices[0].message.content
+
+        # Update chat history
+        self.chat_history.append({"role": "user", "content": user_message})
+        self.chat_history.append({"role": "assistant", "content": assistant_message})
+
+        logger.info("Received response from OpenAI assistant")
+        return assistant_message
+
+    def _send_anthropic_message(self, system_prompt: str, user_message: str) -> str:
+        """Send a message using Anthropic API.
+
+        Args:
+            system_prompt: The system prompt to guide the AI.
+            user_message: The user's message.
+
+        Returns:
+            The AI's response as a string.
+        """
+        # Prepare messages for the API call
+        messages = []
+
+        # Add chat history
+        for msg in self.chat_history:
+            role = msg["role"]
+            content = msg["content"]
+            if role == "user":
+                messages.append({"role": "user", "content": content})
+            elif role == "assistant":
+                messages.append({"role": "assistant", "content": content})
+
+        # Add the new user message
+        messages.append({"role": "user", "content": user_message})
+
+        # Call the Anthropic API
+        response = self.client.messages.create(
+            model=self.model,
+            system=system_prompt,
+            messages=messages,
+            max_tokens=2000,
+            temperature=0.7,
+        )
+
+        # Extract the assistant's message
+        assistant_message = response.content[0].text
+
+        # Update chat history
+        self.chat_history.append({"role": "user", "content": user_message})
+        self.chat_history.append({"role": "assistant", "content": assistant_message})
+
+        logger.info("Received response from Anthropic assistant")
+        return assistant_message
+
+    def clear_history(self):
+        """Clear the chat history."""
+        self.chat_history = []
+        logger.info("Chat history cleared")
+
+    def get_history(self) -> List[Dict[str, str]]:
+        """Get the chat history.
+
+        Returns:
+            The chat history as a list of dictionaries.
+        """
+        return self.chat_history
+
+    def set_current_file(self, file_path: str, file_content: str):
+        """Set the current file being edited.
+
+        Args:
+            file_path: Path to the current file.
+            file_content: Content of the current file.
+        """
+        self.current_file_path = file_path
+        self.current_file_content = file_content
diff --git a/src/env_example b/src/env_example
new file mode 100644
index 0000000..fe3f631
--- /dev/null
+++ b/src/env_example
@@ -0,0 +1,15 @@
+# AI Provider Configuration
+# Set to "openai" or "anthropic"
+AI_PROVIDER=anthropic
+
+# OpenAI API Configuration (if using OpenAI) - not implemented!
+OPENAI_API_KEY=your_openai_api_key_here
+OPENAI_MODEL=gpt-4
+
+# Anthropic API Configuration (if using Anthropic)
+ANTHROPIC_API_KEY=your_anthropic_api_key_here
+ANTHROPIC_MODEL=claude-3-opus-20240229
+
+# Search API Configuration (Google Custom Search)
+SEARCH_API_KEY=your_google_api_key_here
+SEARCH_ENGINE_ID=your_search_engine_id_here
diff --git a/src/execution_engine.py b/src/execution_engine.py
new file mode 100644
index 0000000..7896ab3
--- /dev/null
+++ b/src/execution_engine.py
@@ -0,0 +1,119 @@
+#!/usr/bin/env python
+# -*- coding: utf-8 -*-
+
+"""Code execution module for the codeeditor application."""
+
+import io
+import logging
+import subprocess
+import sys
+import tempfile
+import traceback
+from typing import Dict, Tuple
+
+logger = logging.getLogger(__name__)
+
+
+class ExecutionEngine:
+    """Class for executing code and capturing output."""
+
+    def __init__(self):
+        """Initialize the ExecutionEngine."""
+        logger.info("ExecutionEngine initialized")
+
+    def run_code(self, code: str) -> Dict[str, str]:
+        """Run Python code and capture the output.
+
+        Args:
+            code: The Python code to execute.
+
+        Returns:
+            A dictionary containing 'output', 'error', and 'status'.
+        """
+        result = {"output": "", "error": "", "status": "success"}
+
+        try:
+            # Create a temporary file to store the code
+            with tempfile.NamedTemporaryFile(
+                suffix=".py", delete=False, mode="w"
+            ) as temp_file:
+                temp_file.write(code)
+                temp_file_path = temp_file.name
+
+            # Run the code in a subprocess
+            process = subprocess.Popen(
+                [sys.executable, temp_file_path],
+                stdout=subprocess.PIPE,
+                stderr=subprocess.PIPE,
+                text=True,
+            )
+
+            # Capture output and errors
+            stdout, stderr = process.communicate(timeout=10)  # 10 second timeout
+
+            result["output"] = stdout
+
+            if stderr:
+                result["error"] = stderr
+                result["status"] = "error"
+
+            logger.info(f"Code execution completed with status: {result['status']}")
+
+        except subprocess.TimeoutExpired:
+            result["error"] = "Execution timed out after 10 seconds"
+            result["status"] = "timeout"
+            logger.warning("Code execution timed out")
+
+        except Exception as e:
+            result["error"] = f"Error executing code: {str(e)}"
+            result["status"] = "error"
+            logger.error(f"Error executing code: {e}")
+
+        return result
+
+    def run_code_in_memory(self, code: str) -> Dict[str, str]:
+        """Run Python code in memory and capture the output.
+
+        This method is safer for small code snippets as it doesn't write to disk.
+
+        Args:
+            code: The Python code to execute.
+
+        Returns:
+            A dictionary containing 'output', 'error', and 'status'.
+        """
+        result = {"output": "", "error": "", "status": "success"}
+
+        # Redirect stdout and stderr
+        old_stdout = sys.stdout
+        old_stderr = sys.stderr
+        redirected_output = io.StringIO()
+        redirected_error = io.StringIO()
+        sys.stdout = redirected_output
+        sys.stderr = redirected_error
+
+        try:
+            # Execute the code
+            exec(code)
+            result["output"] = redirected_output.getvalue()
+
+            error_output = redirected_error.getvalue()
+            if error_output:
+                result["error"] = error_output
+                result["status"] = "error"
+
+            logger.info(
+                f"In-memory code execution completed with status: {result['status']}"
+            )
+
+        except Exception as e:
+            result["error"] = f"{str(e)}\n{traceback.format_exc()}"
+            result["status"] = "error"
+            logger.error(f"Error executing code in memory: {e}")
+
+        finally:
+            # Restore stdout and stderr
+            sys.stdout = old_stdout
+            sys.stderr = old_stderr
+
+        return result