diff --git a/VARIABLES.md b/VARIABLES.md
index 554d4b6..7614e48 100644
--- a/VARIABLES.md
+++ b/VARIABLES.md
@@ -59,9 +59,18 @@ These MUST be configured before deployment:
 - **Format:** `ghp_xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx`
 - **Scopes:** `repo`
 
+### Anthropic API Key
+- **Variable:** `ANTHROPIC_API_KEY`
+- **File:** Kubernetes Secret (referenced by `envSecretName`)
+- **Type:** String (Anthropic API key)
+- **Description:** API key for Claude Code / Happy Coder authentication. Browser-based OAuth login does not work inside the VNC session, so this key is **required** for Happy Coder to function.
+- **Required:** Yes (for Happy Coder / Claude Code)
+- **Format:** `sk-ant-api03-...`
+- **How to get:** https://console.anthropic.com/settings/keys
+
 ### VNC Password
 - **Variable:** `vnc-password`
-- **File:** Sealed Secret
+- **File:** Kubernetes Secret (referenced by `envSecretName`)
 - **Type:** String
 - **Description:** Password for VNC web interface
 - **Required:** Recommended for security
@@ -286,8 +295,9 @@ hostnames:
 ### With Secrets
 ```bash
 kubectl create secret generic antigravity-secrets \
-  --from-literal=github-token='CHANGE_ME' \
-  --from-literal=vnc-password='CHANGE_ME' \
+  --from-literal=GITHUB_TOKEN='CHANGE_ME' \
+  --from-literal=VNC_PASSWORD='CHANGE_ME' \
+  --from-literal=ANTHROPIC_API_KEY='sk-ant-api03-...' \
   --dry-run=client -o yaml | \
   kubeseal --format=yaml > k8s/sealedsecrets.yaml
 ```
diff --git a/chart/values.yaml b/chart/values.yaml
index 37627ee..58d9929 100644
--- a/chart/values.yaml
+++ b/chart/values.yaml
@@ -38,6 +38,9 @@ resources:
     memory: "8Gi"
     cpu: "4000m"
 
-# Name of existing Secret containing env vars (GITHUB_TOKEN, VNC_PASSWORD, etc.)
-# Defaults to: devcontainer-{name}-secrets-env
+# Name of existing Secret containing env vars. Defaults to: devcontainer-{name}-secrets-env
+# Recognized keys:
+#   GITHUB_TOKEN      — PAT for private repo access
+#   VNC_PASSWORD      — password for the VNC web UI
+#   ANTHROPIC_API_KEY — required for Claude Code / Happy Coder auth (browser login won't work in VNC)
 envSecretName: ""
diff --git a/scripts/init-repo.sh b/scripts/init-repo.sh
index 6a707a0..59bc873 100644
--- a/scripts/init-repo.sh
+++ b/scripts/init-repo.sh
@@ -59,6 +59,13 @@ chown -R "$RUN_UID:$RUN_GID" "$WORKSPACE_DIR"
 mkdir -p "$HOME"
 chown "$RUN_UID:$RUN_GID" "$HOME"
 
+# Warn if ANTHROPIC_API_KEY is not set — browser-based Claude login won't work in VNC
+if [ -z "$ANTHROPIC_API_KEY" ]; then
+    echo "WARNING: ANTHROPIC_API_KEY is not set."
+    echo "  Claude Code cannot authenticate via browser inside this container."
+    echo "  Add ANTHROPIC_API_KEY to your Kubernetes secret to enable Happy Coder."
+fi
+
 # Start Happy Coder daemon
 echo "Starting Happy Coder..."
 cd "$WORKSPACE_DIR"