diff --git a/package.json b/package.json
index 5e73f0c479e..c1ddc682234 100644
--- a/package.json
+++ b/package.json
@@ -23,7 +23,9 @@
 		"changeset:version": "cp CHANGELOG.md src/CHANGELOG.md && changeset version && cp -vf src/CHANGELOG.md .",
 		"knip": "knip --include files",
 		"update-contributors": "node scripts/update-contributors.js",
-		"evals": "dotenvx run -f packages/evals/.env.development packages/evals/.env.local -- docker compose -f packages/evals/docker-compose.yml --profile server --profile runner up --build --scale runner=0"
+		"evals": "dotenvx run -f packages/evals/.env.development packages/evals/.env.local -- docker compose -f packages/evals/docker-compose.yml --profile server --profile runner up --build --scale runner=0",
+		"link-workspace-packages": "node scripts/link-packages.js",
+		"unlink-workspace-packages": "node scripts/link-packages.js --unlink"
 	},
 	"devDependencies": {
 		"@changesets/cli": "^2.27.10",
diff --git a/scripts/link-packages.js b/scripts/link-packages.js
new file mode 100755
index 00000000000..60ef3be8653
--- /dev/null
+++ b/scripts/link-packages.js
@@ -0,0 +1,105 @@
+#!/usr/bin/env node
+
+const { spawn, execSync } = require("child_process")
+const path = require("path")
+const fs = require("fs")
+
+// Package configuration - Add new packages here as needed.
+const config = {
+	packages: [
+		{
+			name: "@roo-code/cloud",
+			sourcePath: "../Roo-Code-Cloud/packages/sdk",
+			targetPath: "src/node_modules/@roo-code/cloud",
+			npmPath: "npm",
+			watchCommand: "pnpm build:development:watch",
+		},
+	],
+}
+
+const args = process.argv.slice(2)
+const packageName = args.find((arg) => !arg.startsWith("--"))
+const watch = !args.includes("--no-watch")
+const unlink = args.includes("--unlink")
+
+const packages = packageName ? config.packages.filter((p) => p.name === packageName) : config.packages
+
+if (!packages.length) {
+	console.error(`Package '${packageName}' not found`)
+	process.exit(1)
+}
+
+packages.forEach(unlink ? unlinkPackage : linkPackage)
+
+// After unlinking, restore npm packages with a single pnpm install.
+if (unlink && packages.length > 0) {
+	const srcPath = path.resolve(__dirname, "..", "src")
+	console.log("\nRestoring npm packages...")
+
+	try {
+		execSync("pnpm install", { cwd: srcPath, stdio: "inherit" })
+		console.log("Successfully restored npm packages")
+	} catch (error) {
+		console.error(`Failed to restore packages: ${error.message}`)
+		console.log("You may need to run 'pnpm install' manually in the src directory")
+	}
+}
+
+if (!unlink && watch) {
+	const watchers = packages.filter((pkg) => pkg.watchCommand).map(startWatch)
+
+	if (watchers.length) {
+		process.on("SIGINT", () => {
+			console.log("\nStopping...")
+			watchers.forEach((w) => w.kill())
+			process.exit(0)
+		})
+		console.log("\nWatching for changes. Press Ctrl+C to stop.\n")
+	}
+}
+
+function linkPackage(pkg) {
+	const sourcePath = path.resolve(__dirname, "..", pkg.sourcePath)
+	const targetPath = path.resolve(__dirname, "..", pkg.targetPath)
+
+	if (!fs.existsSync(sourcePath)) {
+		console.error(`Source not found: ${sourcePath}`)
+		process.exit(1)
+	}
+
+	// Install dependencies if needed.
+	if (!fs.existsSync(path.join(sourcePath, "node_modules"))) {
+		console.log(`Installing dependencies for ${pkg.name}...`)
+
+		try {
+			execSync("pnpm install", { cwd: sourcePath, stdio: "inherit" })
+		} catch (e) {
+			execSync("pnpm install --no-frozen-lockfile", { cwd: sourcePath, stdio: "inherit" })
+		}
+	}
+
+	// Create symlink.
+	fs.rmSync(targetPath, { recursive: true, force: true })
+	fs.mkdirSync(path.dirname(targetPath), { recursive: true })
+	const linkSource = pkg.npmPath ? path.join(sourcePath, pkg.npmPath) : sourcePath
+	fs.symlinkSync(linkSource, targetPath, "dir")
+	console.log(`Linked ${pkg.name}`)
+}
+
+function unlinkPackage(pkg) {
+	const targetPath = path.resolve(__dirname, "..", pkg.targetPath)
+	if (fs.existsSync(targetPath)) {
+		fs.rmSync(targetPath, { recursive: true, force: true })
+		console.log(`Unlinked ${pkg.name}`)
+	}
+}
+
+function startWatch(pkg) {
+	console.log(`Watching ${pkg.name}...`)
+	const [cmd, ...args] = pkg.watchCommand.split(" ")
+	return spawn(cmd, args, {
+		cwd: path.resolve(__dirname, "..", pkg.sourcePath),
+		stdio: "inherit",
+		shell: true,
+	})
+}
diff --git a/src/extension.ts b/src/extension.ts
index 1fee81a4823..2d95902295d 100644
--- a/src/extension.ts
+++ b/src/extension.ts
@@ -207,28 +207,54 @@ export async function activate(context: vscode.ExtensionContext) {
 
 	// Watch the core files and automatically reload the extension host.
 	if (process.env.NODE_ENV === "development") {
-		const pattern = "**/*.ts"
-
 		const watchPaths = [
-			{ path: context.extensionPath, name: "extension" },
-			{ path: path.join(context.extensionPath, "../packages/types"), name: "types" },
-			{ path: path.join(context.extensionPath, "../packages/telemetry"), name: "telemetry" },
+			{ path: context.extensionPath, pattern: "**/*.ts" },
+			{ path: path.join(context.extensionPath, "../packages/types"), pattern: "**/*.ts" },
+			{ path: path.join(context.extensionPath, "../packages/telemetry"), pattern: "**/*.ts" },
+			{ path: path.join(context.extensionPath, "node_modules/@roo-code/cloud"), pattern: "**/*" },
 		]
 
 		console.log(
-			`♻️♻️♻️ Core auto-reloading is ENABLED. Watching for changes in: ${watchPaths.map(({ name }) => name).join(", ")}`,
+			`♻️♻️♻️ Core auto-reloading: Watching for changes in ${watchPaths.map(({ path }) => path).join(", ")}`,
 		)
 
-		watchPaths.forEach(({ path: watchPath, name }) => {
-			const watcher = vscode.workspace.createFileSystemWatcher(new vscode.RelativePattern(watchPath, pattern))
+		// Create a debounced reload function to prevent excessive reloads
+		let reloadTimeout: NodeJS.Timeout | undefined
+		const DEBOUNCE_DELAY = 1_000
+
+		const debouncedReload = (uri: vscode.Uri) => {
+			if (reloadTimeout) {
+				clearTimeout(reloadTimeout)
+			}
 
-			watcher.onDidChange((uri) => {
-				console.log(`♻️ ${name} file changed: ${uri.fsPath}. Reloading host…`)
+			console.log(`♻️ ${uri.fsPath} changed; scheduling reload...`)
+
+			reloadTimeout = setTimeout(() => {
+				console.log(`♻️ Reloading host after debounce delay...`)
 				vscode.commands.executeCommand("workbench.action.reloadWindow")
-			})
+			}, DEBOUNCE_DELAY)
+		}
+
+		watchPaths.forEach(({ path: watchPath, pattern }) => {
+			const relPattern = new vscode.RelativePattern(vscode.Uri.file(watchPath), pattern)
+			const watcher = vscode.workspace.createFileSystemWatcher(relPattern, false, false, false)
+
+			// Listen to all change types to ensure symlinked file updates trigger reloads.
+			watcher.onDidChange(debouncedReload)
+			watcher.onDidCreate(debouncedReload)
+			watcher.onDidDelete(debouncedReload)
 
 			context.subscriptions.push(watcher)
 		})
+
+		// Clean up the timeout on deactivation
+		context.subscriptions.push({
+			dispose: () => {
+				if (reloadTimeout) {
+					clearTimeout(reloadTimeout)
+				}
+			},
+		})
 	}
 
 	return new API(outputChannel, provider, socketPath, enableLogging)
diff --git a/src/tsconfig.json b/src/tsconfig.json
index 6b7158c4ab3..90bdb860cd0 100644
--- a/src/tsconfig.json
+++ b/src/tsconfig.json
@@ -21,5 +21,12 @@
 		"useUnknownInCatchVariables": false
 	},
 	"include": ["."],
-	"exclude": ["node_modules"]
+	"exclude": ["node_modules"],
+	"watchOptions": {
+		"watchFile": "useFsEvents",
+		"watchDirectory": "useFsEvents",
+		"fallbackPolling": "dynamicPriority",
+		"synchronousWatchDirectory": true,
+		"excludeDirectories": ["**/node_modules", "**/dist", "**/.turbo"]
+	}
 }