diff --git a/.env.example b/.env.example
index 6d3209b9..592f3c6a 100644
--- a/.env.example
+++ b/.env.example
@@ -1,8 +1,8 @@
 # API Keys (Required)
-ANTHROPIC_API_KEY=your_anthropic_api_key_here
+ANTHROPIC_API_KEY=your_anthropic_api_key_here  # Format: sk-ant-api03-...
 
 # Model Configuration
-MODEL=claude-3-7-sonnet-20250219  # Specify which Claude model to use
+MODEL=claude-3-7-sonnet-20250219  # Recommended models: claude-3-7-sonnet-20250219, claude-3-opus-20240229
 MAX_TOKENS=4000                   # Maximum tokens for model responses
 TEMPERATURE=0.7                   # Temperature for model responses (0.0-1.0)
 
diff --git a/README.md b/README.md
index fc152906..aa993ece 100644
--- a/README.md
+++ b/README.md
@@ -2,10 +2,16 @@
 
 A task management system for AI-driven development with Claude, designed to work seamlessly with Cursor AI.
 
+## Requirements
+
+- Node.js 14.0.0 or higher
+- Anthropic API key (Claude API)
+- Anthropic SDK version 0.39.0 or higher
+
 ## Installation
 
 ```bash
-npm install -g claude-task-master
+npm install claude-task-master
 ```
 
 ## Usage
@@ -13,25 +19,15 @@ npm install -g claude-task-master
 ### Initialize a new project
 
 ```bash
-# Navigate to your project directory
-mkdir my-new-project
-cd my-new-project
-
-# Initialize the project
-claude-task-init
+npx claude-task-init
 ```
 
-This will create the necessary file structure for your project, including:
+This will prompt you for project details and set up a new project with the necessary files and structure.
 
-- `.cursor/rules/dev_workflow.mdc` - Cursor rules for AI-driven development
-- `scripts/dev.js` - Task management script
-- `scripts/README.md` - Documentation for the script
-- `scripts/example_prd.txt` - Example PRD template
-- `.env.example` - Example environment variables
-- `.gitignore` - Git ignore file
-- `package.json` - Project configuration
-- `tasks.json` - Empty tasks file
-- `tasks/` - Directory for task files
+### Important Notes
+
+1. This package uses ES modules. Your package.json should include `"type": "module"`.
+2. The Anthropic SDK version should be 0.39.0 or higher.
 
 ## Integrating with Cursor AI
 
diff --git a/index.js b/index.js
index e50baf52..43a5618a 100644
--- a/index.js
+++ b/index.js
@@ -6,14 +6,22 @@
 // This file serves as the main entry point for the package
 // The primary functionality is provided through the CLI commands
 
+import { fileURLToPath } from 'url';
+import { dirname, resolve } from 'path';
+import { createRequire } from 'module';
+
+const __filename = fileURLToPath(import.meta.url);
+const __dirname = dirname(__filename);
+const require = createRequire(import.meta.url);
+
 // Export the path to the dev.js script for programmatic usage
-exports.devScriptPath = require.resolve('./scripts/dev.js');
+export const devScriptPath = resolve(__dirname, './scripts/dev.js');
 
 // Export a function to initialize a new project programmatically
-exports.initProject = async (options = {}) => {
-  const init = require('./scripts/init');
+export const initProject = async (options = {}) => {
+  const init = await import('./scripts/init.js');
   return init.initializeProject(options);
 };
 
 // Export version information
-exports.version = require('./package.json').version; 
\ No newline at end of file
+export const version = require('./package.json').version; 
\ No newline at end of file
diff --git a/package.json b/package.json
index b013c944..ea23e387 100644
--- a/package.json
+++ b/package.json
@@ -1,10 +1,11 @@
 {
   "name": "claude-task-master",
-  "version": "1.0.1",
+  "version": "1.0.2",
   "description": "A task management system for AI-driven development with Claude",
   "main": "index.js",
+  "type": "module",
   "bin": {
-    "claude-task-init": "./scripts/init.js"
+    "claude-task-init": "scripts/init.js"
   },
   "scripts": {
     "test": "echo \"Error: no test specified\" && exit 1",
@@ -23,7 +24,7 @@
   "author": "Eyal Toledano",
   "license": "MIT",
   "dependencies": {
-    "@anthropic-ai/sdk": "^0.10.0",
+    "@anthropic-ai/sdk": "^0.39.0",
     "chalk": "^4.1.2",
     "commander": "^11.1.0",
     "dotenv": "^16.3.1"
@@ -43,6 +44,7 @@
     "scripts/init.js",
     "scripts/dev.js",
     "templates/**",
-    "README.md"
+    "README.md",
+    "index.js"
   ]
 }
diff --git a/scripts/dev.js b/scripts/dev.js
index 0004e47b..77450fb1 100755
--- a/scripts/dev.js
+++ b/scripts/dev.js
@@ -42,6 +42,11 @@
 import fs from 'fs';
 import path from 'path';
 import dotenv from 'dotenv';
+import { fileURLToPath } from 'url';
+import { dirname } from 'path';
+
+const __filename = fileURLToPath(import.meta.url);
+const __dirname = dirname(__filename);
 
 // Load environment variables from .env file
 dotenv.config();
@@ -169,9 +174,17 @@ async function callClaude(prdContent, prdPath, numTasks) {
   log('debug', `Response length: ${textContent.length} characters`);
   
   try {
-    // Try to parse the response as JSON
+    // Check if the response is wrapped in a Markdown code block and extract the JSON
     log('info', "Parsing response as JSON...");
-    const parsedJson = JSON.parse(textContent);
+    let jsonText = textContent;
+    const codeBlockMatch = textContent.match(/```(?:json)?\s*([\s\S]*?)\s*```/);
+    if (codeBlockMatch) {
+      log('debug', "Detected JSON wrapped in Markdown code block, extracting...");
+      jsonText = codeBlockMatch[1];
+    }
+    
+    // Try to parse the response as JSON
+    const parsedJson = JSON.parse(jsonText);
     log('info', `Successfully parsed JSON with ${parsedJson.tasks?.length || 0} tasks`);
     return parsedJson;
   } catch (error) {
diff --git a/scripts/init.js b/scripts/init.js
index c069bd74..72e3ec65 100755
--- a/scripts/init.js
+++ b/scripts/init.js
@@ -1,9 +1,14 @@
 #!/usr/bin/env node
 
-const fs = require('fs');
-const path = require('path');
-const { execSync } = require('child_process');
-const readline = require('readline');
+import fs from 'fs';
+import path from 'path';
+import { execSync } from 'child_process';
+import readline from 'readline';
+import { fileURLToPath } from 'url';
+import { dirname } from 'path';
+
+const __filename = fileURLToPath(import.meta.url);
+const __dirname = dirname(__filename);
 
 // Create readline interface for user input
 const rl = readline.createInterface({
@@ -143,6 +148,7 @@ function createProjectStructure(projectName, projectDescription, projectVersion,
     version: projectVersion,
     description: projectDescription,
     author: authorName,
+    type: "module",
     scripts: {
       "dev": "node scripts/dev.js",
       "list": "node scripts/dev.js list",
@@ -150,7 +156,7 @@ function createProjectStructure(projectName, projectDescription, projectVersion,
       "parse-prd": "node scripts/dev.js parse-prd"
     },
     dependencies: {
-      "@anthropic-ai/sdk": "^0.10.0",
+      "@anthropic-ai/sdk": "^0.39.0",
       "chalk": "^4.1.2",
       "commander": "^11.1.0",
       "dotenv": "^16.3.1"
@@ -230,7 +236,7 @@ function createProjectStructure(projectName, projectDescription, projectVersion,
 }
 
 // Run the initialization if this script is executed directly
-if (require.main === module) {
+if (process.argv[1] === fileURLToPath(import.meta.url)) {
   (async function main() {
     try {
       await initializeProject();
@@ -242,7 +248,7 @@ if (require.main === module) {
 }
 
 // Export functions for programmatic use
-module.exports = {
+export {
   initializeProject,
   createProjectStructure,
   log
diff --git a/scripts/prepare-package.js b/scripts/prepare-package.js
index 306ce5cf..873d3c79 100755
--- a/scripts/prepare-package.js
+++ b/scripts/prepare-package.js
@@ -5,9 +5,14 @@
  * It ensures all necessary files are included and properly configured.
  */
 
-const fs = require('fs');
-const path = require('path');
-const { execSync } = require('child_process');
+import fs from 'fs';
+import path from 'path';
+import { execSync } from 'child_process';
+import { fileURLToPath } from 'url';
+import { dirname } from 'path';
+
+const __filename = fileURLToPath(import.meta.url);
+const __dirname = dirname(__filename);
 
 // Define colors for console output
 const COLORS = {
diff --git a/templates/README.md b/templates/README.md
index 75304ee9..8ea6a766 100644
--- a/templates/README.md
+++ b/templates/README.md
@@ -34,6 +34,12 @@ This project uses the Claude Task Master system to manage development tasks in a
    npm run generate
    ```
 
+### Important Notes
+
+1. This project uses ES modules. The package.json includes `"type": "module"`.
+2. The Anthropic SDK version should be 0.39.0 or higher.
+3. If you encounter JSON parsing errors, make sure your Anthropic API key is valid and your environment is set up correctly.
+
 ## Integrating with Cursor AI
 
 This project includes Cursor AI integration through the `.cursor/rules/dev_workflow.mdc` file, which provides the AI with knowledge about the task management system.
diff --git a/templates/dev.js b/templates/dev.js
index 0004e47b..77450fb1 100644
--- a/templates/dev.js
+++ b/templates/dev.js
@@ -42,6 +42,11 @@
 import fs from 'fs';
 import path from 'path';
 import dotenv from 'dotenv';
+import { fileURLToPath } from 'url';
+import { dirname } from 'path';
+
+const __filename = fileURLToPath(import.meta.url);
+const __dirname = dirname(__filename);
 
 // Load environment variables from .env file
 dotenv.config();
@@ -169,9 +174,17 @@ async function callClaude(prdContent, prdPath, numTasks) {
   log('debug', `Response length: ${textContent.length} characters`);
   
   try {
-    // Try to parse the response as JSON
+    // Check if the response is wrapped in a Markdown code block and extract the JSON
     log('info', "Parsing response as JSON...");
-    const parsedJson = JSON.parse(textContent);
+    let jsonText = textContent;
+    const codeBlockMatch = textContent.match(/```(?:json)?\s*([\s\S]*?)\s*```/);
+    if (codeBlockMatch) {
+      log('debug', "Detected JSON wrapped in Markdown code block, extracting...");
+      jsonText = codeBlockMatch[1];
+    }
+    
+    // Try to parse the response as JSON
+    const parsedJson = JSON.parse(jsonText);
     log('info', `Successfully parsed JSON with ${parsedJson.tasks?.length || 0} tasks`);
     return parsedJson;
   } catch (error) {
diff --git a/templates/env.example b/templates/env.example
index 8cca52cc..2bae4f48 100644
--- a/templates/env.example
+++ b/templates/env.example
@@ -1,13 +1,13 @@
 # Required
-ANTHROPIC_API_KEY=your-api-key-here
+ANTHROPIC_API_KEY=your-api-key-here  # Format: sk-ant-api03-...
 
 # Optional - defaults shown
-MODEL=claude-3-7-sonnet-20250219
-MAX_TOKENS=4000
-TEMPERATURE=0.7
-DEBUG=false
-LOG_LEVEL=info
-DEFAULT_SUBTASKS=3
-DEFAULT_PRIORITY=medium
-PROJECT_NAME={{projectName}}
-PROJECT_VERSION={{projectVersion}} 
\ No newline at end of file
+MODEL=claude-3-7-sonnet-20250219  # Recommended models: claude-3-7-sonnet-20250219, claude-3-opus-20240229
+MAX_TOKENS=4000                   # Maximum tokens for model responses
+TEMPERATURE=0.7                   # Temperature for model responses (0.0-1.0)
+DEBUG=false                       # Enable debug logging (true/false)
+LOG_LEVEL=info                    # Log level (debug, info, warn, error)
+DEFAULT_SUBTASKS=3                # Default number of subtasks when expanding
+DEFAULT_PRIORITY=medium           # Default priority for generated tasks (high, medium, low)
+PROJECT_NAME={{projectName}}      # Project name for tasks.json metadata
+PROJECT_VERSION={{projectVersion}} # Project version for tasks.json metadata 
\ No newline at end of file