The "think" tool provides Claude with a dedicated space for structured thinking during complex tasks, allowing it to pause and reflect, especially when processing tool outputs. This leads to significant improvements in Claude's ability to follow policies, make consistent decisions, and handle multi-step problems. Evaluations on τ-Bench showed dramatic performance gains in airline and retail customer service domains when the "think" tool was used. The tool is most useful in scenarios requiring careful tool output analysis, adherence to policies, and sequential decision making. Pairing the "think" tool with optimized prompting further enhances its effectiveness, especially in difficult domains.