Three different jobs
Prompt files, skills, and project memory get conflated, but they solve different problems. Memory is about persistent facts; prompt files are about reusable instructions; skills are about callable capabilities.
Knowing which is which keeps your setup clean and your context lean.
Project memory
Memory holds the durable facts the agent should know every session — architecture, conventions, decisions, constraints. It's always-on context, read at the start of work.
Use it for things that are true across many tasks, not for one-off instructions.
Prompt files
A prompt file is a reusable instruction set for a recurring task — 'review this PR', 'write a migration', 'generate release notes' — that you invoke when you need it.
It keeps repeatable workflows consistent without bloating always-on memory.
Skills
Skills are packaged capabilities the agent can call to actually do something — a procedure plus the knowledge to run it. They're invoked when relevant rather than always loaded.
Use a skill when you want the agent to perform a defined task well, on demand.
How they work together
A healthy setup uses all three: memory for durable context, prompt files for recurring instructions, and skills for callable capabilities. The art is putting each fact or instruction in the right place.
Misplacing them — stuffing one-off instructions into memory, for example — just adds noise and wastes context.