diff --git a/server/main.py b/server/main.py
index f48e9f2..5efd4af 100644
--- a/server/main.py
+++ b/server/main.py
@@ -120,9 +120,11 @@ async def setup_status():
     # Check for Claude CLI
     claude_cli = shutil.which("claude") is not None
 
-    # Check for credentials file
-    credentials_path = Path.home() / ".claude" / ".credentials.json"
-    credentials = credentials_path.exists()
+    # Check for Claude CLI configuration directory
+    # Note: Claude CLI no longer stores credentials in ~/.claude/.credentials.json
+    # The existence of ~/.claude indicates the CLI has been configured
+    claude_dir = Path.home() / ".claude"
+    credentials = claude_dir.exists() and claude_dir.is_dir()
 
     # Check for Node.js and npm
     node = shutil.which("node") is not None
diff --git a/server/services/process_manager.py b/server/services/process_manager.py
index d2b4f0b..31352fc 100644
--- a/server/services/process_manager.py
+++ b/server/services/process_manager.py
@@ -36,6 +36,47 @@ SENSITIVE_PATTERNS = [
     r'aws[_-]?secret[=:][^\s]+',
 ]
 
+# Patterns that indicate Claude CLI authentication errors
+AUTH_ERROR_PATTERNS = [
+    r"not\s+logged\s+in",
+    r"not\s+authenticated",
+    r"authentication\s+(failed|required|error)",
+    r"login\s+required",
+    r"please\s+(run\s+)?['\"]?claude\s+login",
+    r"unauthorized",
+    r"invalid\s+(token|credential|api.?key)",
+    r"expired\s+(token|session|credential)",
+    r"could\s+not\s+authenticate",
+    r"sign\s+in\s+(to|required)",
+]
+
+
+def is_auth_error(text: str) -> bool:
+    """Check if text contains Claude CLI authentication error messages."""
+    if not text:
+        return False
+    text_lower = text.lower()
+    for pattern in AUTH_ERROR_PATTERNS:
+        if re.search(pattern, text_lower):
+            return True
+    return False
+
+
+AUTH_ERROR_HELP = """
+================================================================================
+  AUTHENTICATION ERROR DETECTED
+================================================================================
+
+Claude CLI requires authentication to work.
+
+To fix this, run:
+  claude login
+
+This will open a browser window to sign in.
+After logging in, try starting the agent again.
+================================================================================
+"""
+
 
 def sanitize_output(line: str) -> str:
     """Remove sensitive information from output lines."""
@@ -185,6 +226,9 @@ class AgentProcessManager:
         if not self.process or not self.process.stdout:
             return
 
+        auth_error_detected = False
+        output_buffer = []  # Buffer recent lines for auth error detection
+
         try:
             loop = asyncio.get_running_loop()
             while True:
@@ -198,6 +242,18 @@ class AgentProcessManager:
                 decoded = line.decode("utf-8", errors="replace").rstrip()
                 sanitized = sanitize_output(decoded)
 
+                # Buffer recent output for auth error detection
+                output_buffer.append(decoded)
+                if len(output_buffer) > 20:
+                    output_buffer.pop(0)
+
+                # Check for auth errors
+                if not auth_error_detected and is_auth_error(decoded):
+                    auth_error_detected = True
+                    # Broadcast auth error help message
+                    for help_line in AUTH_ERROR_HELP.strip().split('\n'):
+                        await self._broadcast_output(help_line)
+
                 await self._broadcast_output(sanitized)
 
         except asyncio.CancelledError:
@@ -209,6 +265,12 @@ class AgentProcessManager:
             if self.process and self.process.poll() is not None:
                 exit_code = self.process.returncode
                 if exit_code != 0 and self.status == "running":
+                    # Check buffered output for auth errors if we haven't detected one yet
+                    if not auth_error_detected:
+                        combined_output = '\n'.join(output_buffer)
+                        if is_auth_error(combined_output):
+                            for help_line in AUTH_ERROR_HELP.strip().split('\n'):
+                                await self._broadcast_output(help_line)
                     self.status = "crashed"
                 elif self.status == "running":
                     self.status = "stopped"
diff --git a/start_ui.sh b/start_ui.sh
index 644db74..895c4dd 100644
--- a/start_ui.sh
+++ b/start_ui.sh
@@ -9,6 +9,27 @@ echo "  AutoCoder UI"
 echo "===================================="
 echo ""
 
+# Check if Claude CLI is installed
+if ! command -v claude &> /dev/null; then
+    echo "[!] Claude CLI not found"
+    echo ""
+    echo "    The agent requires Claude CLI to work."
+    echo "    Install it from: https://claude.ai/download"
+    echo ""
+    echo "    After installing, run: claude login"
+    echo ""
+else
+    echo "[OK] Claude CLI found"
+    # Note: Claude CLI no longer stores credentials in ~/.claude/.credentials.json
+    # We can't reliably check auth status without making an API call
+    if [ -d "$HOME/.claude" ]; then
+        echo "     (If you're not logged in, run: claude login)"
+    else
+        echo "[!] Claude CLI not configured - run 'claude login' first"
+    fi
+fi
+echo ""
+
 # Check if Python is available
 if ! command -v python3 &> /dev/null; then
     if ! command -v python &> /dev/null; then