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What Is Context Engineering? Why Smart AI Still Makes Mistakes

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What is Context Engineering? Why can the same AI, on the same coding task, produce completely different results?

Context Engineering is the practice of designing and managing context. It focuses on selecting, organizing and providing the right information to the AI at each step. Unlike Prompt Engineering, which mainly optimizes instructions, Context Engineering also manages documents, conversation history, tools and data within the context window.

In 2020, Retrieval-Augmented Generation (RAG) research laid an important foundation for combining models with retrieved information. In 2025, Harrison Chase of LangChain helped popularize the term Context Engineering.

You will explore:

  • How Context Engineering differs from Prompt Engineering.
  • Why an AI agent needs the right source code, error messages and testing tools.
  • What the 2024 Lost in the Middle study revealed about the limits of long context windows.
  • Four context-management strategies: write, select, compress and isolate.

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