diff --git a/core/llm/rules/alwaysApply.vitest.ts b/core/llm/rules/alwaysApply.vitest.ts
new file mode 100644
index 0000000000..f8d6e11601
--- /dev/null
+++ b/core/llm/rules/alwaysApply.vitest.ts
@@ -0,0 +1,186 @@
+import { describe, expect, it } from "vitest";
+import {
+  ContextItemId,
+  ContextItemWithId,
+  RuleWithSource,
+  UserChatMessage,
+} from "../..";
+import { getApplicableRules } from "./getSystemMessageWithRules";
+
+describe("alwaysApply Behavior", () => {
+  // Common test fixtures
+  const testFile = "src/app.ts";
+  const matchingFile = "src/components/Button.tsx";
+  const nonMatchingFile = "src/utils/helper.js"; // Not matching *.tsx glob
+
+  // File context items
+  const matchingFileContext: ContextItemWithId = {
+    id: { providerTitle: "file", itemId: "match1" } as ContextItemId,
+    uri: { type: "file", value: matchingFile },
+    content: "export const Button = () => {...}",
+    name: "Button.tsx",
+    description: "Component file",
+  };
+
+  const nonMatchingFileContext: ContextItemWithId = {
+    id: { providerTitle: "file", itemId: "nonmatch1" } as ContextItemId,
+    uri: { type: "file", value: nonMatchingFile },
+    content: "export const helper = () => {...}",
+    name: "helper.js",
+    description: "Helper file",
+  };
+
+  // Message with no file references
+  const messageWithoutFile: UserChatMessage = {
+    role: "user",
+    content: "Can you help me understand how this works?",
+  };
+
+  it("alwaysApply: true - Always include the rule, regardless of file context", () => {
+    // Rule with alwaysApply: true
+    const alwaysApplyRule: RuleWithSource = {
+      name: "Always Apply Rule",
+      rule: "This rule should always be applied",
+      alwaysApply: true,
+      globs: "**/*.tsx", // Should be ignored since alwaysApply is true
+      source: "rules-block",
+      ruleFile: ".continue/rules.md",
+    };
+
+    // Test with no file context
+    let applicableRules = getApplicableRules(
+      messageWithoutFile,
+      [alwaysApplyRule],
+      [],
+    );
+    expect(applicableRules).toHaveLength(1);
+    expect(applicableRules[0].name).toBe("Always Apply Rule");
+
+    // Test with matching file
+    applicableRules = getApplicableRules(
+      undefined,
+      [alwaysApplyRule],
+      [matchingFileContext],
+    );
+    expect(applicableRules).toHaveLength(1);
+    expect(applicableRules[0].name).toBe("Always Apply Rule");
+
+    // Test with non-matching file
+    applicableRules = getApplicableRules(
+      undefined,
+      [alwaysApplyRule],
+      [nonMatchingFileContext],
+    );
+    expect(applicableRules).toHaveLength(1);
+    expect(applicableRules[0].name).toBe("Always Apply Rule");
+  });
+
+  it("alwaysApply: false - Only include if globs exist AND match file context", () => {
+    // Rule with alwaysApply: false and globs
+    const conditionalRule: RuleWithSource = {
+      name: "Conditional Rule",
+      rule: "Apply only to matching files",
+      alwaysApply: false,
+      globs: "**/*.tsx",
+      source: "rules-block",
+      ruleFile: ".continue/rules.md",
+    };
+
+    // Rule with alwaysApply: false and no globs
+    const neverApplyRule: RuleWithSource = {
+      name: "Never Apply Rule",
+      rule: "This rule should never apply",
+      alwaysApply: false,
+      // No globs
+      source: "rules-block",
+      ruleFile: ".continue/rules.md",
+    };
+
+    // Test with no file context
+    let applicableRules = getApplicableRules(
+      messageWithoutFile,
+      [conditionalRule, neverApplyRule],
+      [],
+    );
+    expect(applicableRules).toHaveLength(0); // No rules should apply
+
+    // Test with matching file
+    applicableRules = getApplicableRules(
+      undefined,
+      [conditionalRule, neverApplyRule],
+      [matchingFileContext],
+    );
+    expect(applicableRules).toHaveLength(1);
+    expect(applicableRules[0].name).toBe("Conditional Rule");
+    expect(applicableRules.map((r) => r.name)).not.toContain(
+      "Never Apply Rule",
+    );
+
+    // Test with non-matching file
+    applicableRules = getApplicableRules(
+      undefined,
+      [conditionalRule, neverApplyRule],
+      [nonMatchingFileContext],
+    );
+    expect(applicableRules).toHaveLength(0); // No rules should apply
+  });
+
+  it("alwaysApply: undefined - Default behavior: include if no globs exist OR globs exist and match", () => {
+    // Rule with undefined alwaysApply and no globs (should behave like a global rule)
+    const defaultNoGlobsRule: RuleWithSource = {
+      name: "Default No Globs Rule",
+      rule: "Default rule with no globs",
+      source: "rules-block",
+      ruleFile: ".continue/rules.md",
+      // No alwaysApply, no globs
+    };
+
+    // Rule with undefined alwaysApply and globs
+    const defaultWithGlobsRule: RuleWithSource = {
+      name: "Default With Globs Rule",
+      rule: "Default rule with globs",
+      globs: "**/*.tsx",
+      source: "rules-block",
+      ruleFile: ".continue/rules.md",
+      // No alwaysApply, with globs
+    };
+
+    // Test with no file context
+    let applicableRules = getApplicableRules(
+      messageWithoutFile,
+      [defaultNoGlobsRule, defaultWithGlobsRule],
+      [],
+    );
+    expect(applicableRules).toHaveLength(1);
+    expect(applicableRules[0].name).toBe("Default No Globs Rule");
+    expect(applicableRules.map((r) => r.name)).not.toContain(
+      "Default With Globs Rule",
+    );
+
+    // Test with matching file
+    applicableRules = getApplicableRules(
+      undefined,
+      [defaultNoGlobsRule, defaultWithGlobsRule],
+      [matchingFileContext],
+    );
+    expect(applicableRules).toHaveLength(2);
+    expect(applicableRules.map((r) => r.name)).toContain(
+      "Default No Globs Rule",
+    );
+    expect(applicableRules.map((r) => r.name)).toContain(
+      "Default With Globs Rule",
+    );
+
+    // Test with non-matching file
+    applicableRules = getApplicableRules(
+      undefined,
+      [defaultNoGlobsRule, defaultWithGlobsRule],
+      [nonMatchingFileContext],
+    );
+    expect(applicableRules).toHaveLength(1);
+    expect(applicableRules[0].name).toBe("Default No Globs Rule");
+    expect(applicableRules.map((r) => r.name)).not.toContain(
+      "Default With Globs Rule",
+    );
+  });
+});