[BUG] API Error: 500 Internal server error

Preflight Checklist

• [x] I have searched existing issues and this hasn't been reported yet
• [x] This is a single bug report (please file separate reports for different bugs)
• [x] I am using the latest version of Claude Code

What's Wrong?

Claude Code in the VS Code extension fails with the following API error:

API Error: 500 Internal server error. This is a server-side issue, usually temporary — try again in a moment. If it persists, check https://status.claude.com/.

The error persists after retrying and prevents me from using Claude Code. It occurs in the VS Code extension rather than during a specific file operation.

What Should Happen?

Claude Code should process my request and return a response normally without an HTTP 500 error.

Error Messages/Logs

API Error: 500 Internal server error. This is a server-side issue, usually temporary — try again in a moment. If it persists, check https://status.claude.com.

Steps to Reproduce

1. Open VS Code.
2. Open a project workspace.
3. Open the Claude Code extension.
4. Start a new conversation and send any prompt.
5. Wait for Claude Code to process the request.
6. The extension returns an "API Error: 500 Internal server error" message.
7. Retry the request.
8. The same error occurs again.

The issue persists after restarting VS Code and starting a new Claude Code session.

Claude Model

Sonnet (default)

Is this a regression?

Yes, this worked in a previous version

Last Working Version

_No response_

Claude Code Version

2.1.186

Platform

Anthropic API

Operating System

Ubuntu/Debian Linux

Terminal/Shell

VS Code integrated terminal

Additional Information

_No response_