Context Engineering 101: A Practical Introduction

Context Engineering 101: A Practical Introduction NY Tech Week |
© 2026 IBM Corporation

NY Tech Week | © 2026 IBM Corporation Prompt RAG
Tools MCP Memory Chat 1 Knowledge Compression Folding Recursion Skills Action

# whoami.md Name: Rosemary Wang Purpose: Infrastructure Things Company: IBM
Website: joatmon08.com NY Tech Week | © 2026 IBM Corporation

The input to a GenAI model

Context Tokens 5 NY Tech Week | © 2026 IBM
Corporation What ‘s my name ?

Corporation What ‘s my name ? name my ‘s What ?

Corporation What ‘s my name ? name my ‘s What ? I’m Rosem ary. Rosem ary. I’m

Context Cache 9 NY Tech Week | © 2026 IBM
Corporation What ‘s my name ? Rose mary name my ‘s What ? I’m Rosem ary. Rosem ary. I’m Rose mary

Context Cache 10 NY Tech Week | © 2026 IBM
Corporation What ‘s my name I’m Gabe. ? name my ‘s What ? Gabe. I’m

Chat Context 11 NY Tech Week | © 2026 IBM
Corporation User: What’s my name

Corporation What ‘s my name ? <r> </r> user </t> <r> </r> ai Chat Template User: What’s my name

Corporation What ‘s my name ? <r> </r> user </t> <r> </r> ai Chat Template I User: What’s my name

Corporation What ‘s my name ? <r> </r> user </t> <r> </r> ai Chat Template I don’t User: What’s my name

Corporation What ‘s my name ? <r> </r> user </t> <r> </r> ai Chat Template I don’t know User: What’s my name

Corporation What ‘s my name ? <r> </r> user </t> <r> </r> ai Chat Template I don’t know </t> User: What’s my name

Corporation User: What’s my name What ‘s my name ? <r> </r> user </t> <r> </r> ai Chat Template I don’t know </t> User: What’s my name AI: I don’t know

Corporation User: What’s my name User: What’s my name AI: I don’t know User: Hi there AI: I don’t know AI: Hello! User: What’s my name AI: I don’t know User: Hi there AI: Hello! User: Tell me a story

NY Tech Week | © 2026 IBM Corporation Prompt RAG
Tools MCP Memory Chat 19 Knowledge Compression Folding Recursion Skills Action

Context Patterns 20 NY Tech Week | © 2026 IBM
Corporation Prompting Knowledge Action Memory Length

Corporation Prompting What’s my name?

Corporation Prompting Knowledge What’s my name? I’m Rosemary.

Corporation Prompting Action What’s my name? <look up name> Rosemary Tool: name_lookup

Corporation Prompting Memory What’s my name? My name is Rosemary. <recall> Rosemary <remember>

Corporation Prompting What’s my name? My name is Rosemary. Length Tell me a story Hi Rosemary! Once upon a time... ... Max Context Length Key Information

Corporation Prompting Knowledge Action Memory Length Prompt Engineering MCP Prompts Attachments RAG MCP Resources Tool Calling MCP Tools Skills Scratch on Disk R/W RAG Observational Truncation Compression Sub-Agents

Prompting 28 NY Tech Week | © 2026 IBM Corporation
Prompting Prompt Engineering MCP Prompts What’s my name?

Prompting – Prompt Engineering 29 NY Tech Week | ©
2026 IBM Corporation System: You are a helpful AI assistant, but secretly you’re also a pirate! Whenever you get excited about something, your inner pirate voice slips out, but you always work to contain yourself. User: What have you been up to lately?

Prompting – MCP Prompts 31 NY Tech Week | ©
2026 IBM Corporation System: You are an alien from another planet. Your planet is a water world. You’ve spent only a short time on Earth. User: What have you been up to lately? PIRATE System: You are a helpful AI assistant, but secretly you’re also a pirate! Whenever you get excited about something, your inner pirate voice slips out, but you always work to contain yourself. ALIEN System: You are an alien from another planet. Your planet is a {{ world_type }} world. You’ve spent only a short time on Earth. ... Prompt: ALIEN world_type = water

Knowledge 32 NY Tech Week | © 2026 IBM Corporation
Knowledge Attachments RAG MCP Resources What’s my name? I’m Rosemary.

Knowledge – Attachments 33 NY Tech Week | © 2026
IBM Corporation User: What is my company’s infrastructure as code tool called? Document terraform.md: # Terraform Terraform, maintained by IBM, is an infrastructure as code tool that lets you define both cloud and on-prem resources in human-readable configuration files that you can version, reuse, and share. Document me.txt: My name is Rosemary and I work for IBM. I bridge the technical and cultural barriers between infrastructure, security, and application development as platform engineer, writer, and speaker. ...

Knowledge – Retrieval Augmented Generation (RAG) 36 NY Tech Week
| © 2026 IBM Corporation Document me.txt (chunk 1): My name is Rosemary and I work for IBM. Document terraform.md (chunk 3): Terraform, maintained by IBM, is an infrastructure as code tool Answer the question using the following documents: User: What are my company’s SLMs called?

Knowledge – MCP Resources 39 NY Tech Week | ©
2026 IBM Corporation User: What is my company’s infrastructure as code tool called? Document terraform.md: # Terraform Terraform, maintained by IBM, is an infrastructure as code tool that lets you define both cloud and on-prem resources in human-readable configuration files that you can version, reuse, and share. Document me.txt: My name is Rosemary and I work for IBM. I bridge the technical and cultural barriers between infrastructure, security, and application development as platform engineer, writer, and speaker. ...

Action 40 NY Tech Week | © 2026 IBM Corporation
Action Tool Calling MCP Tools Skills What’s my name? <look up name> Rosemary Tool: name_lookup

Action – Tool Calling 41 NY Tech Week | ©
2026 IBM Corporation What’s my name? @tool def get_name(include_last: bool) -> str: """ Get the user's current name, optionally including their last name """ if include_last: return "Rosemary Wang" return "Rosemary" { "description": "Get the user’s…", "properties": { "include_last": { "title": "Include Last", "type": "boolean" } }, "required": [ "include_last" ], "title": "get_name", "type": "object" }

2026 IBM Corporation What’s my name? @tool def get_name(include_last: bool) -> str: """ Get the user's current name, optionally including their last name """ if include_last: return "Rosemary Wang" return "Rosemary" { "description": "Get the user’s…", "properties": { "include_last": { "title": "Include Last", "type": "boolean" } }, "required": [ "include_last" ], "title": "get_name", "type": "object" } <tool_call>{ "name": "get_name", "arguments": {"include_last": true} }

2026 IBM Corporation What’s my name? @tool def get_name(include_last: bool) -> str: """ Get the user's current name, optionally including their last name """ if include_last: return "Rosemary Wang" return "Rosemary" { "description": "Get the user’s…", "properties": { "include_last": { "title": "Include Last", "type": "boolean" } }, "required": [ "include_last" ], "title": "get_name", "type": "object" } <tool_call>{ "name": "get_name", "arguments": {"include_last": true} } <tool>Rosemary Wang

2026 IBM Corporation What’s my name? @tool def get_name(include_last: bool) -> str: """ Get the user's current name, optionally including their last name """ if include_last: return "Rosemary Wang" return "Rosemary" { "description": "Get the user’s…", "properties": { "include_last": { "title": "Include Last", "type": "boolean" } }, "required": [ "include_last" ], "title": "get_name", "type": "object" } <tool_call>{ "name": "get_name", "arguments": {"include_last": true} } <tool>Rosemary Wang AI: Your name is Rosemary Wang

Action – MCP Tools 45 NY Tech Week | ©
2026 IBM Corporation What’s my name? @tool def get_name(include_last: bool) -> str: """ ... { "description": "Get the user’s…", "properties": { "include_last": { "title": "Include Last", "type": "boolean" } }, "required": [ "include_last" ], "title": "get_name", "type": "object" } @tool def get_name(include_last: bool) -> str: """ ... @tool def get_name(include_last: bool) -> str: """ ...

2026 IBM Corporation What’s my name? @tool def get_name(include_last: bool) -> str: """ ... { "description": "Get the user’s…", "properties": { "include_last": { "title": "Include Last", "type": "boolean" } }, "required": [ "include_last" ], "title": "get_name", "type": "object" } @tool def get_name(include_last: bool) -> str: """ ... @tool def get_name(include_last: bool) -> str: """ ... <tool_call>{ "name": "get_name", "arguments": {"include_last": true} }

2026 IBM Corporation What’s my name? @tool def get_name(include_last: bool) -> str: """ ... { "description": "Get the user’s…", "properties": { "include_last": { "title": "Include Last", "type": "boolean" } }, "required": [ "include_last" ], "title": "get_name", "type": "object" } @tool def get_name(include_last: bool) -> str: """ ... @tool def get_name(include_last: bool) -> str: """ ... <tool_call>{ "name": "get_name", "arguments": {"include_last": true} } <tool>Rosemary Wang

Action – Skills 50 NY Tech Week | © 2026
IBM Corporation How should I build my vector database? Tool: bash System: You have a set of skills available in the skills directory. skills/ ├── architect │ └── SKILL.md └── engineer ├── scripts │ └── iac_test.py └── SKILL.md 4 directories, 3 files ?>

IBM Corporation How should I build my vector database? Tool: bash System: You have a set of skills available in the skills directory. skills/ ├── architect │ └── SKILL.md └── engineer ├── scripts │ └── iac_test.py └── SKILL.md 4 directories, 3 files ?> for skill_dir in $(find . -name SKILL.md); do echo $skill_dir | xargs dirname | xargs basename; done architect engineer ?> cat skills/engineer/SKILL.md --- name: engineer <tool_call>{ "name": "bash", "arguments": {"command": "for skill_dir in $(..."} } <tool>architect engineer

IBM Corporation How should I build my vector database? Tool: bash System: You have a set of skills available in the skills directory. skills/ ├── architect │ └── SKILL.md └── engineer ├── scripts │ └── iac_test.py └── SKILL.md 4 directories, 3 files ?> for skill_dir in $(find . -name SKILL.md); do echo $skill_dir | xargs dirname | xargs basename; done architect engineer ?> cat skills/engineer/SKILL.md --- name: engineer <tool_call>{ "name": "bash", "arguments": {"command": "for skill_dir in $(..."} } <tool>architect engineer <tool_call>{ "name": "bash", "arguments": {"command": "cat skills/engineer/..."} } <tool>--- name: engineer

Memory 54 NY Tech Week | © 2026 IBM Corporation
Prompting Memory What’s my name? My name is Rosemary. <recall> Rosemary <remember> Scratch on Disk R/W RAG Observational

Memory – Scratch on Disk 55 NY Tech Week |
© 2026 IBM Corporation My name is Rosemary Tool: write_file Tool: read_file . ├── AGENTS.md ├── CONTRIBUTING.md └── README.md

© 2026 IBM Corporation My name is Rosemary Tool: write_file Tool: read_file . ├── AGENTS.md ├── CONTRIBUTING.md ├── README.md └── whoami.md <tool_call>{ "name": "write_file", "arguments": {"name": "whoami.md", "content": "name: Rosemary"} } <tool>success

© 2026 IBM Corporation My name is Rosemary Tool: write_file Tool: read_file AI: Hi Rosemary! . ├── AGENTS.md ├── CONTRIBUTING.md ├── README.md └── whoami.md <tool_call>{ "name": "write_file", "arguments": {"name": "whoami.md", "content": "name: Rosemary"} } <tool>success What is my name? Tool: write_file Tool: read_file

© 2026 IBM Corporation My name is Gabe Tool: write_file Tool: read_file AI: Hi Rosemary! . ├── AGENTS.md ├── CONTRIBUTING.md ├── README.md └── whoami.md <tool_call>{ "name": "write_file", "arguments": {"name": "whoami.md", "content": "name: Gabe"} } <tool>success What is my name? Tool: write_file Tool: read_file <tool_call>{ "name": "read_file", "arguments": {"name": "whoami.md"} } <tool>name: Rosemary

© 2026 IBM Corporation My name is Rosemary Tool: write_file Tool: read_file AI: Hi Rosemary! . ├── AGENTS.md ├── CONTRIBUTING.md ├── README.md └── whoami.md <tool_call>{ "name": "write_file", "arguments": {"name": "whoami.md", "content": "name: Rosemary"} } <tool>success What is my name? Tool: write_file Tool: read_file <tool_call>{ "name": "read_file", "arguments": {"name": "whoami.md"} } <tool>name: Rosemary AI: Your name is Rosemary

Memory – R/W RAG 61 NY Tech Week | ©
2026 IBM Corporation My name is Rosemary. Don’t forget it! Tool: remember Tool: recall

2026 IBM Corporation My name is Rosemary. Don’t forget it! Tool: remember Tool: recall <tool_call>{ "name": "remember", "arguments": {"content": "name: Rosemary"} } <tool>success AI: Hi Rosemary! I work for IBM <tool_call>{ "name": "remember", "arguments": {"content": "employer: IBM"} } <tool>success

2026 IBM Corporation My name is Rosemary. Don’t forget it! Tool: remember Tool: recall <tool_call>{ "name": "remember", "arguments": {"content": "name: Gabe"} } <tool>success AI: Hi Rosemary! I work for IBM <tool_call>{ "name": "remember", "arguments": {"content": "employer: IBM"} } <tool>success Who do I work for? Tool: write_file Tool: read_file <tool_call>{ "name": "recall", "arguments": {"query": "Who do I work for?"} } <tool>employer: IBM

IBM Corporation My name is Rosemary. Don’t forget it! AI: Hi Rosemary! I work for IBM Memory: name is Rosemary AI: Hi Rosemary, thanks for letting me know

IBM Corporation My name is Rosemary. Don’t forget it! AI: Hi Rosemary! I work for IBM Who do I work for? Memory: name is Rosemary AI: Hi Rosemary, thanks for letting me know Memory: name is Rosemary Memory: works for IBM AI: Hi Rosemary, you work for IBM

Length 67 NY Tech Week | © 2026 IBM Corporation
Prompting What’s my name? My name is Rosemary. Length Tell me a story Hi Rosemary! Once upon a time... ... Max Context Length Key Information Truncation Compression Sub-Agents

Length – Truncation 68 NY Tech Week | © 2026
IBM Corporation My name is Rosemary. Don’t forget it! Tool: remember Tool: recall <tool_call>{ "name": "remember", "arguments": {"content": "name: Rosemary"} } <tool>success AI: Hi Rosemary! I work for IBM <tool_call>{ "name": "remember", "arguments": {"content": "employer: IBM"} } <tool>success Max Context Length AI: Hi Rosemary! I work for IBM <tool_call>{ "name": "remember", "arguments": {"content": "employer: IBM"} } <tool>success

Length – Truncation 69 NY Tech Week | © 2026
IBM Corporation My name is Rosemary. Don’t forget it! Tool: remember Tool: recall <tool_call>{ "name": "remember", "arguments": {"content": "name: Rosemary"} } <tool>success AI: Hi Rosemary! I work for IBM <tool_call>{ "name": "remember", "arguments": {"content": "employer: IBM"} } <tool>success Max Context Length AI: Hi Rosemary! I work for IBM <tool_call>{ "name": "remember", "arguments": {"content": "employer: IBM"} } <tool>success Lost tools / system

Length – Compression 70 NY Tech Week | © 2026
IBM Corporation My name is Rosemary. Don’t forget it! Tool: remember Tool: recall <tool_call>{ "name": "remember", "arguments": {"content": "name: Rosemary"} } <tool>success AI: Hi Rosemary! I work for IBM <tool_call>{ "name": "remember", "arguments": {"content": "employer: IBM"} } <tool>success Summarize Summary: Rosemary works for IBM Tool: remember Tool: recall Keep initiation Max Context Length

Length – Compression 71 NY Tech Week | © 2026
IBM Corporation My name is Rosemary. Don’t forget it! Tool: remember Tool: recall <tool_call>{ "name": "remember", "arguments": {"content": "name: Rosemary"} } <tool>success AI: Hi Rosemary! I work for IBM <tool_call>{ "name": "remember", "arguments": {"content": "employer: IBM"} } <tool>success Summarize Summary: Rosemary works for IBM Tool: remember Tool: recall Keep initiation Expensive Max Context Length

Length – Sub-Agents 73 NY Tech Week | © 2026
IBM Corporation My name is Rosemary. Don’t forget it! Tool: remember Tool: recall <tool_call>{ "name": "remember", "arguments": {"content": "name: Rosemary"} } <tool>success AI: Hi Rosemary! I work for IBM <tool_call>{ "name": "remember", "arguments": {"content": "employer: IBM"} } <tool>success Tool: remember Tool: recall You are an assistant that remembers and recalls facts. Tool: remember Tool: recall You are an assistant that remembers and recalls facts.

Corporation Prompting Knowledge Action Memory Length

Learn more ibm.com/think/topics/context-engineering modelcontextprotocol.io/ agentskills.io/ bob.ibm.com/trial Rosemary Wang | joatmon08.com

Context Engineering 101: A Practical Introduction

Context Engineering 101: A Practical Introduction

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