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Prerequisites

Before wiring Zed to Factory Droid, make sure you have:
  1. Factory account and API key
  2. Factory CLI installed (supported on all operating systems except Windows ARM machines)
    • Install via: 
      curl -fsSL https://app.factory.ai/cli | sh
  • Set the FACTORY_API_KEY environment variable in your shell (for example, add export FACTORY_API_KEY=your_key_here to your shell profile).
  • Ensure droid is on your PATH, or note its full path.
  1. Zed installed
    • Zed on macOS, Linux, or x86_64 Windows.
    • Access to ~/.config/zed/settings.json.
You cannot create a Factory account or manage billing from inside Zed. All account setup happens in the Factory web app.

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Configure Factory Droid as an Agent (agent_servers)

Edit ~/.config/zed/settings.json and add a Factory Droid entry under agent_servers: 
"agent_servers": {
  "Factory Droid": {
    "type": "custom",
    "command": "*path/to/droid/cli*",
    "args": ["exec", "--output-format", "acp"],
    "env": {
      "FACTORY_API_KEY": "$FACTORY_API_KEY"
    }
  }
}
  • type: "custom" – tells Zed this is a user-defined agent
  • command – full path to the droid binary
  • args – run Droid in exec mode and speak ACP to Zed
  • FACTORY_API_KEY – pulled from your shell environment or replaced with a literal key

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Start a Droid Session in Zed

Once agent_servers and context_servers are configured, you can start chatting with Droid from the Agent Panel.

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Open the Agent Panel

  • macOS: Cmd + ?
  • Linux/Windows: Ctrl + ?

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Start a New Chat with Factory Droid

  1. Open the Agent Panel.
  2. Click the + button in the top-right corner.
  3. In the agent dropdown, select Factory Droid.
  4. Start chatting.
Zed Agent Panel with + button highlighted and Factory Droid selected in the agent dropdown

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Resume Existing Sessions

Zed does not currently provide a way to reload or restore past Factory Droid sessions from the Agent Panel.
  • Each Agent Panel conversation is effectively a fresh session.
  • For longer work streams, keep the panel open or start new chats with a brief recap so Droid can quickly reorient.

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Editor Context and Limitations

There is no dedicated Factory Droid plugin for Zed yet, but Zed supports @-tagging files inside agent chats.
  • Use @ to reference relevant files when you ask Droid to inspect or modify code.
  • Combine @-tags with plain-language instructions, just as you would in the CLI.
Example: 
Refactor the state management in @src/components/TodoList.tsx to use a reducer instead of multiple useState hooks.
Zed Agent Panel showing a message with an @-tagged file reference

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Models and Autonomy

Model selection and autonomy behavior inside Zed follow the same rules as the Droid CLI.
  • Choose your model and reasoning level using the same patterns described in Choosing Your Model.
  • Use lower autonomy for planning and higher autonomy once you trust the plan.
  • Zed supports Shift+Tab for switching autonomy modes, matching the default shortcut in the Droid CLI.

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(Optional) Configure MCP Servers (context_servers)

Zed’s context_servers section is where you configure MCP servers. Each entry is a real MCP server that exposes tools and context, which Factory Droid can call while you chat. For example, to add a Chrome DevTools MCP server: 
"context_servers": {
  "chrome-devtools": {
    "command": "npx",
    "args": ["-y", "chrome-devtools@latest"]
  }
}
  • chrome-devtools – server name used inside Zed
  • command – executable to run (here, npx)
  • args – how to launch the MCP server; update the package name to the actual server you want to use
You can define multiple MCP servers under context_servers for internal tools, data sources, or other services. When you chat with Factory Droid in Zed, it can call any of these MCP servers as tools.

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Troubleshooting

If Factory Droid does not appear or respond in Zed:
  • Verify the CLI:
    • Run droid exec --output-format acp in a regular terminal to ensure the CLI and API key work.
  • Check settings.json:
    • Confirm the agent_servers and context_servers blocks are valid JSON (including commas and quotes).
    • Ensure the command and args for both Droid and your MCP servers run successfully outside Zed.
  • Confirm your OS:
    • Make sure you are not running on Windows on ARM.
If an MCP server is failing, try launching it manually with the same command and args used in context_servers to debug configuration or dependency issues.