How does Cursor manage context across a large codebase?

Cursor uses a combination of: (1) auto-indexing your codebase into embeddings for semantic search, (2) explicit @file mentions to pin specific files, (3) .cursorignore to exclude irrelevant files, and (4) the active file plus recent files as implicit context. For large monorepos, using @mention liberally and keeping your context focused on the relevant subdirectory produces the best results.