Claude Code with LM Studio on Windows 11: Run Local Models Without API Costs

Published 18/06/2026

Description

In this video, I show how to install Claude Code on Windows 11 and connect it to LM Studio so you can use local AI models instead of paying for cloud API tokens. If you want to run Claude Code against your own hardware, this walkthrough explains the full setup step by step. Contents: 0:00 - Introduction 0:18 - Description 1:06 - Claude Install - Terminal 1:59 - Windows Path 3:11 - Claude Terminal - First Start 5:06 - LMStudio Api Key 6:26 - Claude /init 8:06 - Vs Code 10:00 - Conclusion You will learn how to install Claude Code from the terminal, fix the Windows PATH issue, configure the required environment variables, point the Anthropic-compatible base URL to LM Studio, and add authentication with a managed token. I also explain how to launch Claude Code with a specific local model and why this matters when you are not using the default Anthropic-hosted models. I demonstrate how to use Claude Code from both the terminal and VS Code, how to initialize a project with init, and how to work around model selection limitations inside the VS Code extension by overriding the default model mapping. This makes it possible to use locally hosted models such as Gemma, Qwen, and other supported models through LM Studio. If you are experimenting with local LLMs, AI coding assistants, Windows 11 development, VS Code, or GPU-powered AI workstations, this video will help you understand a practical way to run Claude Code with your own infrastructure. It is especially useful if you want more control, lower recurring costs, and a hybrid workflow that combines local models with cloud models when needed. Topics covered: Claude Code installation on Windows 11 LM Studio local server setup Anthropic-compatible API configuration Windows PATH environment variable fix Local authentication token setup Claude Code model selection VS Code Claude Code extension Running local models for coding assistance Hybrid local and cloud AI workflows If you enjoy practical v