diff --git a/src/extension.ts b/src/extension.ts
index 2445832..b894ae0 100644
--- a/src/extension.ts
+++ b/src/extension.ts
@@ -305,6 +305,9 @@ class ClaudeChatProvider {
 			case 'deleteCustomSnippet':
 				this._deleteCustomSnippet(message.snippetId);
 				return;
+			case 'enableYoloMode':
+				this._enableYoloMode();
+				return;
 		}
 	}
 
@@ -2038,15 +2041,39 @@ class ClaudeChatProvider {
 		});
 	}
 
+	private async _enableYoloMode(): Promise<void> {
+		try {
+			// Update VS Code configuration to enable YOLO mode
+			const config = vscode.workspace.getConfiguration('claudeCodeChat');
+			
+			// Clear any global setting and set workspace setting
+			await config.update('permissions.yoloMode', true, vscode.ConfigurationTarget.Workspace);
+			
+			console.log('YOLO Mode enabled - all future permissions will be skipped');
+			
+			// Send updated settings to UI
+			this._sendCurrentSettings();
+			
+		} catch (error) {
+			console.error('Error enabling YOLO mode:', error);
+		}
+	}
+
 	private async _updateSettings(settings: { [key: string]: any }): Promise<void> {
 		const config = vscode.workspace.getConfiguration('claudeCodeChat');
 		
 		try {
 			for (const [key, value] of Object.entries(settings)) {
-				await config.update(key, value, vscode.ConfigurationTarget.Global);
+				if (key === 'permissions.yoloMode') {
+					// YOLO mode is workspace-specific
+					await config.update(key, value, vscode.ConfigurationTarget.Workspace);
+				} else {
+					// Other settings are global (user-wide)
+					await config.update(key, value, vscode.ConfigurationTarget.Global);
+				}
 			}
 			
-			vscode.window.showInformationMessage('Settings updated successfully');
+			console.log('Settings updated:', settings);
 		} catch (error) {
 			console.error('Failed to update settings:', error);
 			vscode.window.showErrorMessage('Failed to update settings');
diff --git a/src/ui-styles.ts b/src/ui-styles.ts
index 7012630..9d1ce91 100644
--- a/src/ui-styles.ts
+++ b/src/ui-styles.ts
@@ -107,6 +107,86 @@ const styles = `
         font-size: 16px;
     }
 
+    .permission-menu {
+        position: relative;
+        margin-left: auto;
+    }
+
+    .permission-menu-btn {
+        background: none;
+        border: none;
+        color: var(--vscode-descriptionForeground);
+        cursor: pointer;
+        padding: 4px 8px;
+        border-radius: 4px;
+        font-size: 16px;
+        font-weight: bold;
+        transition: all 0.2s ease;
+        line-height: 1;
+    }
+
+    .permission-menu-btn:hover {
+        background-color: var(--vscode-list-hoverBackground);
+        color: var(--vscode-foreground);
+    }
+
+    .permission-menu-dropdown {
+        position: absolute;
+        top: 100%;
+        right: 0;
+        background-color: var(--vscode-menu-background);
+        border: 1px solid var(--vscode-menu-border);
+        border-radius: 6px;
+        box-shadow: 0 4px 12px rgba(0, 0, 0, 0.15);
+        z-index: 1000;
+        min-width: 220px;
+        padding: 4px 0;
+        margin-top: 4px;
+    }
+
+    .permission-menu-item {
+        display: flex;
+        align-items: flex-start;
+        gap: 10px;
+        padding: 12px 16px;
+        background: none;
+        border: none;
+        width: 100%;
+        text-align: left;
+        cursor: pointer;
+        color: var(--vscode-foreground);
+        transition: background-color 0.2s ease;
+    }
+
+    .permission-menu-item:hover {
+        background-color: var(--vscode-list-hoverBackground);
+    }
+
+    .permission-menu-item .menu-icon {
+        font-size: 16px;
+        margin-top: 1px;
+        flex-shrink: 0;
+    }
+
+    .permission-menu-item .menu-content {
+        display: flex;
+        flex-direction: column;
+        gap: 2px;
+    }
+
+    .permission-menu-item .menu-title {
+        font-weight: 500;
+        font-size: 13px;
+        line-height: 1.2;
+    }
+
+    .permission-menu-item .menu-subtitle {
+        font-size: 11px;
+        color: var(--vscode-descriptionForeground);
+        opacity: 0.8;
+        line-height: 1.2;
+    }
+
     .permission-content {
         font-size: 13px;
         line-height: 1.4;
diff --git a/src/ui.ts b/src/ui.ts
index 269162a..fd72be0 100644
--- a/src/ui.ts
+++ b/src/ui.ts
@@ -339,7 +339,7 @@ const html = `<!DOCTYPE html>
 						</button>
 						<div class="yolo-mode-section">
 							<input type="checkbox" id="yolo-mode" onchange="updateSettings(); updateYoloWarning();">
-							<label for="yolo-mode">Enable Yolo Mode (Skip All Permissions)</label>
+							<label for="yolo-mode">Enable Yolo Mode (Auto-allow all permissions)</label>
 						</div>
 					</div>
 				</div>
@@ -2786,6 +2786,18 @@ const html = `<!DOCTYPE html>
 				<div class="permission-header">
 					<span class="icon">🔐</span>
 					<span>Permission Required</span>
+					<div class="permission-menu">
+						<button class="permission-menu-btn" onclick="togglePermissionMenu('\${data.id}')" title="More options">⋮</button>
+						<div class="permission-menu-dropdown" id="permissionMenu-\${data.id}" style="display: none;">
+							<button class="permission-menu-item" onclick="enableYoloMode('\${data.id}')">
+								<span class="menu-icon">⚡</span>
+								<div class="menu-content">
+									<span class="menu-title">Enable YOLO Mode</span>
+									<span class="menu-subtitle">Auto-allow all permissions</span>
+								</div>
+							</button>
+						</div>
+					</div>
 				</div>
 				<div class="permission-content">
 					<p>Allow <strong>\${toolName}</strong> to execute the tool call above?</p>
@@ -2837,6 +2849,44 @@ const html = `<!DOCTYPE html>
 			}
 		}
 
+		function togglePermissionMenu(permissionId) {
+			const menu = document.getElementById(\`permissionMenu-\${permissionId}\`);
+			const isVisible = menu.style.display !== 'none';
+			
+			// Close all other permission menus
+			document.querySelectorAll('.permission-menu-dropdown').forEach(dropdown => {
+				dropdown.style.display = 'none';
+			});
+			
+			// Toggle this menu
+			menu.style.display = isVisible ? 'none' : 'block';
+		}
+
+		function enableYoloMode(permissionId) {
+			// Hide the menu
+			document.getElementById(\`permissionMenu-\${permissionId}\`).style.display = 'none';
+			
+			// Send message to enable YOLO mode
+			vscode.postMessage({
+				type: 'enableYoloMode'
+			});
+			
+			// Auto-approve this permission
+			respondToPermission(permissionId, true);
+			
+			// Show notification
+			addMessage('⚡ YOLO Mode enabled! All future permissions will be automatically allowed.', 'system');
+		}
+
+		// Close permission menus when clicking outside
+		document.addEventListener('click', function(event) {
+			if (!event.target.closest('.permission-menu')) {
+				document.querySelectorAll('.permission-menu-dropdown').forEach(dropdown => {
+					dropdown.style.display = 'none';
+				});
+			}
+		});
+
 		// Session management functions
 		function newSession() {
 			vscode.postMessage({