diff --git a/.github/workflows/ci.yml b/.github/workflows/ci.yml
index 92b1591..5b688b0 100644
--- a/.github/workflows/ci.yml
+++ b/.github/workflows/ci.yml
@@ -33,6 +33,9 @@ jobs:
     - name: Compile
       run: npm run compile
 
-    - name: Run Tests
+    - name: Run Unit Tests
+      run: npm run test:unit
+
+    - name: Run Integration Tests
       # VS Code tests require a display server on Linux
-      run: xvfb-run -a npm test
+      run: xvfb-run -a npm run test:integration
diff --git a/.vscode-test.mjs b/.vscode-test.mjs
index b62ba25..f9c67eb 100644
--- a/.vscode-test.mjs
+++ b/.vscode-test.mjs
@@ -1,5 +1,5 @@
 import { defineConfig } from '@vscode/test-cli';
 
 export default defineConfig({
-	files: 'out/test/**/*.test.js',
+	files: 'out/test/integration/**/*.test.js',
 });
diff --git a/package.json b/package.json
index fb2c832..2ed00b3 100644
--- a/package.json
+++ b/package.json
@@ -113,12 +113,15 @@
     "pretest": "npm run compile-tests && npm run compile && npm run lint",
     "check-types": "node ./node_modules/typescript/bin/tsc --noEmit",
     "lint": "node ./node_modules/eslint/bin/eslint.js src",
-    "test": "node ./node_modules/@vscode/test-cli/out/bin.mjs",
+    "test": "npm run test:unit && npm run test:integration",
+    "test:unit": "npm run compile-tests && npx mocha out/test/unit/**/*.test.js --ui tdd",
+    "test:integration": "node ./node_modules/@vscode/test-cli/out/bin.mjs",
     "prepare": "husky"
   },
   "lint-staged": {
     "*.ts": [
-      "eslint --fix"
+      "eslint --fix",
+      "bash -c 'npm run test:unit'"
     ]
   },
   "devDependencies": {
diff --git a/src/ai/registry.ts b/src/ai/registry.ts
index 2affe81..ff06509 100644
--- a/src/ai/registry.ts
+++ b/src/ai/registry.ts
@@ -1,5 +1,5 @@
-import * as vscode from 'vscode';
-import type { PredicteCommitConfig } from '../core/config';
+import type * as vscode from 'vscode';
+import type { PredicteCommitConfig } from '../core/types';
 import type { ProviderClient } from './types';
 
 export interface ProviderDefinition {
diff --git a/src/ai/selector.ts b/src/ai/selector.ts
index 98214ca..8760a5c 100644
--- a/src/ai/selector.ts
+++ b/src/ai/selector.ts
@@ -1,6 +1,6 @@
 import type * as vscode from 'vscode';
-import type { PredicteCommitConfig } from '../core/config';
-import { getEffectiveProviderId } from '../core/config';
+import type { PredicteCommitConfig } from '../core/types';
+import { getEffectiveProviderId } from '../core/logic';
 import type { ProviderClient } from './types';
 import { getProviderDefinition } from './registry';
 
diff --git a/src/commands.ts b/src/commands.ts
index 1dafd1c..b95cf1e 100644
--- a/src/commands.ts
+++ b/src/commands.ts
@@ -1,5 +1,6 @@
 import * as vscode from 'vscode';
-import { getConfig, getEffectiveProviderId } from './core/config';
+import { getConfig } from './core/config';
+import { getEffectiveProviderId } from './core/logic';
 import { getGitExtension } from './modules/git/vscode';
 import { getTargetRepository } from './modules/git/repo';
 import { toRepoRelativePosixPath } from './utils/paths';
diff --git a/src/core/config.ts b/src/core/config.ts
index 42d7607..2782f97 100644
--- a/src/core/config.ts
+++ b/src/core/config.ts
@@ -1,16 +1,6 @@
 import * as vscode from 'vscode';
-
-export type PredicteCommitConfig = {
-  provider: string;
-  models: string[];
-  ignoredFiles: string[];
-  useLocal: boolean;
-  localBaseUrl: string;
-  localModel: string;
-  debugLogging: boolean;
-};
-
-export const DEFAULT_LOCAL_URL = '';
+import { PredicteCommitConfig } from './types';
+import { DEFAULT_LOCAL_URL } from './constants';
 
 export function getConfig(): PredicteCommitConfig {
   const cfg = vscode.workspace.getConfiguration('predicteCommit');
@@ -26,18 +16,3 @@ export function getConfig(): PredicteCommitConfig {
     debugLogging: cfg.get<boolean>('debugLogging', false),
   };
 }
-
-export const DIFF_CAPS: { maxCharsPerFile: number; maxCharsTotal: number } = {
-  maxCharsPerFile: 8000,
-  maxCharsTotal: 32000,
-};
-
-export const TRUNCATION_MARKER = '...TRUNCATED...';
-
-export function getEffectiveProviderId(cfg: PredicteCommitConfig): string {
-  // Backwards compatibility: existing users may rely on useLocal.
-  if (cfg.useLocal) {
-    return 'ollama';
-  }
-  return cfg.provider;
-}
diff --git a/src/core/constants.ts b/src/core/constants.ts
new file mode 100644
index 0000000..7e65d52
--- /dev/null
+++ b/src/core/constants.ts
@@ -0,0 +1,8 @@
+export const DEFAULT_LOCAL_URL = '';
+
+export const DIFF_CAPS: { maxCharsPerFile: number; maxCharsTotal: number } = {
+  maxCharsPerFile: 8000,
+  maxCharsTotal: 32000,
+};
+
+export const TRUNCATION_MARKER = '...TRUNCATED...';
diff --git a/src/core/logic.ts b/src/core/logic.ts
new file mode 100644
index 0000000..ba3afe1
--- /dev/null
+++ b/src/core/logic.ts
@@ -0,0 +1,9 @@
+import { PredicteCommitConfig } from './types';
+
+export function getEffectiveProviderId(cfg: PredicteCommitConfig): string {
+  // Backwards compatibility: existing users may rely on useLocal.
+  if (cfg.useLocal) {
+    return 'ollama';
+  }
+  return cfg.provider;
+}
diff --git a/src/core/types.ts b/src/core/types.ts
new file mode 100644
index 0000000..561bc4a
--- /dev/null
+++ b/src/core/types.ts
@@ -0,0 +1,9 @@
+export type PredicteCommitConfig = {
+  provider: string;
+  models: string[];
+  ignoredFiles: string[];
+  useLocal: boolean;
+  localBaseUrl: string;
+  localModel: string;
+  debugLogging: boolean;
+};
diff --git a/src/providers/local/index.ts b/src/providers/local/index.ts
index bfe3426..7767521 100644
--- a/src/providers/local/index.ts
+++ b/src/providers/local/index.ts
@@ -1,7 +1,7 @@
 import { postChatCompletion } from '../../ai/http';
 import type { GenerateRequest, GenerateResult, ProviderClient } from '../../ai/types';
 import { registerProvider } from '../../ai/registry';
-import { DEFAULT_LOCAL_URL } from '../../core/config';
+import { DEFAULT_LOCAL_URL } from '../../core/constants';
 
 export class LocalProvider implements ProviderClient {
   constructor(
diff --git a/src/test/config.test.ts b/src/test/integration/config.test.ts
similarity index 88%
rename from src/test/config.test.ts
rename to src/test/integration/config.test.ts
index 8f0e58e..59d95e3 100644
--- a/src/test/config.test.ts
+++ b/src/test/integration/config.test.ts
@@ -1,5 +1,8 @@
 import * as assert from 'assert';
-import { getEffectiveProviderId, getConfig, PredicteCommitConfig, DEFAULT_LOCAL_URL } from '../core/config';
+import { getConfig } from '../../core/config';
+import { PredicteCommitConfig } from '../../core/types';
+import { getEffectiveProviderId } from '../../core/logic';
+import { DEFAULT_LOCAL_URL } from '../../core/constants';
 
 suite('Config Test Suite', () => {
     test('getEffectiveProviderId', () => {
diff --git a/src/test/extension.test.ts b/src/test/integration/extension.test.ts
similarity index 83%
rename from src/test/extension.test.ts
rename to src/test/integration/extension.test.ts
index 3147783..b433856 100644
--- a/src/test/extension.test.ts
+++ b/src/test/integration/extension.test.ts
@@ -3,10 +3,10 @@ import * as assert from 'assert';
 // You can import and use all API from the 'vscode' module
 // as well as import your extension to test it
 import * as vscode from 'vscode';
-// import * as myExtension from '../../extension';
+// import * as myExtension from '../../../extension';
 
-import { truncateWithMarker } from '../utils/truncate';
-import { isTransientStatus, isAuthOrConfigStatus } from '../ai/errors';
+import { truncateWithMarker } from '../../utils/truncate';
+import { isTransientStatus, isAuthOrConfigStatus } from '../../ai/errors';
 
 suite('Extension Test Suite', () => {
   vscode.window.showInformationMessage('Start all tests.');
diff --git a/src/test/ai.test.ts b/src/test/unit/ai.test.ts
similarity index 92%
rename from src/test/ai.test.ts
rename to src/test/unit/ai.test.ts
index ae903a1..f83d7b2 100644
--- a/src/test/ai.test.ts
+++ b/src/test/unit/ai.test.ts
@@ -1,8 +1,8 @@
 import * as assert from 'assert';
-import { selectProvider } from '../ai/selector';
-import { registerProvider } from '../ai/registry';
-import { PredicteCommitConfig } from '../core/config';
-import { ProviderClient, GenerateRequest, GenerateResult } from '../ai/types';
+import { selectProvider } from '../../ai/selector';
+import { registerProvider } from '../../ai/registry';
+import { PredicteCommitConfig } from '../../core/types';
+import { ProviderClient, GenerateRequest, GenerateResult } from '../../ai/types';
 
 suite('AI Selector Test Suite', () => {
     test('selectProvider selects correct provider', async () => {
diff --git a/src/test/http_error.test.ts b/src/test/unit/http_error.test.ts
similarity index 93%
rename from src/test/http_error.test.ts
rename to src/test/unit/http_error.test.ts
index 6a4d22c..f63e9a8 100644
--- a/src/test/http_error.test.ts
+++ b/src/test/unit/http_error.test.ts
@@ -1,6 +1,6 @@
 import * as assert from 'assert';
-import { postChatCompletion } from '../ai/http';
-import { ProviderError } from '../ai/errors';
+import { postChatCompletion } from '../../ai/http';
+import { ProviderError } from '../../ai/errors';
 
 suite('HTTP Error Handling', () => {
     test('ECONNREFUSED returns friendly message', async () => {
diff --git a/src/test/utils.test.ts b/src/test/unit/utils.test.ts
similarity index 96%
rename from src/test/utils.test.ts
rename to src/test/unit/utils.test.ts
index fa6c65d..83e46c8 100644
--- a/src/test/utils.test.ts
+++ b/src/test/unit/utils.test.ts
@@ -1,7 +1,7 @@
 import * as assert from 'assert';
-import { isIgnored } from '../utils/ignore';
-import { truncateWithMarker, capDiffsByFileAndTotal } from '../utils/truncate';
-import { DIFF_CAPS, TRUNCATION_MARKER } from '../core/config';
+import { isIgnored } from '../../utils/ignore';
+import { truncateWithMarker, capDiffsByFileAndTotal } from '../../utils/truncate';
+import { DIFF_CAPS, TRUNCATION_MARKER } from '../../core/constants';
 
 suite('Utils Test Suite', () => {
     test('isIgnored', () => {
diff --git a/src/utils/truncate.ts b/src/utils/truncate.ts
index 38dcde6..0af0aa8 100644
--- a/src/utils/truncate.ts
+++ b/src/utils/truncate.ts
@@ -1,4 +1,4 @@
-import { DIFF_CAPS, TRUNCATION_MARKER } from '../core/config';
+import { DIFF_CAPS, TRUNCATION_MARKER } from '../core/constants';
 
 export function truncateWithMarker(input: string, maxChars: number): string {
   if (input.length <= maxChars) {