diff --git a/README.md b/README.md
index bbd3d88..83eb988 100644
--- a/README.md
+++ b/README.md
@@ -304,6 +304,31 @@ vnoremap <leader>ec :!explain-code<CR>
 - Code/Prompt editors have DOS-style scrollbars with `▲` and `▼` arrow buttons.
 - In step dialogs, use `Tab` to cycle between File, Editor, and Output fields.
 
+## AI-Assisted Code Generation
+
+When adding or editing a **Code Step**, the dialog includes an AI assist panel:
+
+```
+┌─ Code ─────────────┐ ┌─ AI Assisted Auto-adjust ─────────────┐
+│ result = input...  │ │ Provider: [opencode-deepseek] [▼]    │
+│                    │ │ ┌─ Prompt ──────────────────────────┐ │
+│                    │ │ │ Modify this code to...           │ │
+│                    │ │ │ {code}                           │ │
+│                    │ │ └──────────────────────────────────┘ │
+│                    │ │ ┌─ Output & Feedback ───────────────┐ │
+│                    │ │ │ ✓ Code updated successfully!     │ │
+│                    │ │ └──────────────────────────────────┘ │
+│                    │ │         < Auto-adjust >              │
+└────────────────────┘ └───────────────────────────────────────┘
+```
+
+- **Provider**: Select any configured AI provider
+- **Prompt**: Fully editable template - use `{code}` placeholder for current code
+- **Output**: Shows status, success/error messages, and provider feedback
+- **Auto-adjust**: Sends prompt to AI and replaces code with response
+
+This lets you generate or modify Python code using AI directly within the tool builder.
+
 ## Philosophy
 
 SmartTools is a **personal power tool**: