Claude API Function Calling: Complete Guide to Tool Use (2026)

Anthropic's Claude API offers advanced capabilities including tool use, which allows the model to request specific code execution for database queries or calculations. To optimize costs, prompt caching reduces expenses by 90% for reused prompt prefixes in RAG apps. Additionally, streaming responses improve chat UI latency by delivering tokens incrementally rather than waiting for full completion. These features, implemented via Python and FastAPI, enable the creation of efficient, multi-tool agents and high-performance AI applications.