diff --git a/examples/sample-action-client/package.json b/examples/sample-action-client/package.json
index 70ef1956..6643b428 100644
--- a/examples/sample-action-client/package.json
+++ b/examples/sample-action-client/package.json
@@ -46,6 +46,10 @@
         "title": "BAS Toolkit: has Fiori capabilities (hasFioriCapabilities)",
         "command": "has.fiori.capabilities"
       },
+      {
+        "title": "BAS Toolkit: has Cap capabilities (hasCapCapabilities)",
+        "command": "has.cap.capabilities"
+      },
       {
         "title": "BAS Toolkit: Is Opened For Action (isOpenedForAction)",
         "command": "is.opened.for.action"
@@ -88,6 +92,7 @@
     "onCommand:get.parameter",
     "onCommand:lcap.enabled",
     "onCommand:has.fiori.capabilities",
+    "onCommand:has.cap.capabilities",
     "onCommand:is.opened.for.action",
     "onCommand:fileaction.scheduled",
     "onCommand:executeaction.display.error",
diff --git a/examples/sample-action-client/src/extension.ts b/examples/sample-action-client/src/extension.ts
index c68100b2..2920bb5c 100644
--- a/examples/sample-action-client/src/extension.ts
+++ b/examples/sample-action-client/src/extension.ts
@@ -154,6 +154,15 @@ export function activate(context: ExtensionContext) {
     })
   );
 
+  context.subscriptions.push(
+    commands.registerCommand("has.cap.capabilities", async () => {
+      const enabledValue = await basAPI.hasCapCapabilities();
+      void window.showInformationMessage(
+        `has Cap capabilities? ${enabledValue}`
+      );
+    })
+  );
+
   context.subscriptions.push(
     commands.registerCommand("is.opened.for.action", async () => {
       const isOpenedForActionValue = await basAPI.isOpenedForAction();
diff --git a/packages/app-studio-toolkit-types/api.d.ts b/packages/app-studio-toolkit-types/api.d.ts
index a3b78c72..157349ad 100644
--- a/packages/app-studio-toolkit-types/api.d.ts
+++ b/packages/app-studio-toolkit-types/api.d.ts
@@ -110,6 +110,11 @@ export interface BasToolkit {
    */
   hasFioriCapabilities: () => Promise<boolean>;
 
+  /**
+   * Is environment Cap or not
+   */
+  hasCapCapabilities: () => Promise<boolean>;
+
   /**
    * Determine whether BAS is opened for running action or editing a project
    *
diff --git a/packages/app-studio-toolkit/src/apis/validateCapCapabilities.ts b/packages/app-studio-toolkit/src/apis/validateCapCapabilities.ts
new file mode 100644
index 00000000..4afc0f6e
--- /dev/null
+++ b/packages/app-studio-toolkit/src/apis/validateCapCapabilities.ts
@@ -0,0 +1,15 @@
+import { getLogger } from "@sap/artifact-management";
+import { extensions } from "vscode";
+
+export const CAP_EXTENSION_ID = "SAPSE.vscode-cds";
+
+// eslint-disable-next-line @typescript-eslint/require-await -- the new implementation does not require await.
+export async function hasCapCapabilities(): Promise<boolean> {
+  const logger = getLogger().getChildLogger({ label: "hasCapCapabilities" });
+
+  // Cap mode is determined by the existence of the Cap extension
+  const hasCapCapabilities = !!extensions.getExtension(CAP_EXTENSION_ID);
+  logger.trace("Has Cap Capabilities", { hasCapCapabilities });
+
+  return hasCapCapabilities;
+}
diff --git a/packages/app-studio-toolkit/src/public-api/base-bas-api.ts b/packages/app-studio-toolkit/src/public-api/base-bas-api.ts
index 89d98974..ef099402 100644
--- a/packages/app-studio-toolkit/src/public-api/base-bas-api.ts
+++ b/packages/app-studio-toolkit/src/public-api/base-bas-api.ts
@@ -11,6 +11,7 @@ import {
 import { getLogger } from "../logger/logger";
 import { isLCAPEnabled, isLCAPEnabledSync } from "../apis/validateLCAP";
 import { hasFioriCapabilities } from "../apis/validateFioriCapabilities";
+import { hasCapCapabilities } from "../apis/validateCapCapabilities";
 import { isOpenedForAction } from "../apis/isOpenedForAction";
 
 /**
@@ -48,6 +49,7 @@ export const baseBasToolkitAPI: Omit<BasToolkit, "workspaceAPI"> = {
   isLCAPEnabled,
   isLCAPEnabledSync,
   hasFioriCapabilities,
+  hasCapCapabilities,
   isOpenedForAction,
 
   actions: {
diff --git a/packages/app-studio-toolkit/test/apis/validateCapabilities.spec.ts b/packages/app-studio-toolkit/test/apis/validateCapabilities.spec.ts
index b40c3738..c1d9d881 100644
--- a/packages/app-studio-toolkit/test/apis/validateCapabilities.spec.ts
+++ b/packages/app-studio-toolkit/test/apis/validateCapabilities.spec.ts
@@ -10,11 +10,16 @@ const testVscode = {
 mockVscode(testVscode, "dist/src/logger/logger.js");
 mockVscode(testVscode, "dist/src/apis/validateLCAP.js");
 mockVscode(testVscode, "dist/src/apis/validateFioriCapabilities.js");
+mockVscode(testVscode, "dist/src/apis/validateCapCapabilities.js");
 import { isLCAPEnabled, LACP_EXTENSION_ID } from "../../src/apis/validateLCAP";
 import {
   hasFioriCapabilities,
   FIORI_EXTENSION_ID,
 } from "../../src/apis/validateFioriCapabilities";
+import {
+  hasCapCapabilities,
+  CAP_EXTENSION_ID,
+} from "../../src/apis/validateCapCapabilities";
 
 describe("validate capabilities API", () => {
   it("should return false", async () => {
@@ -79,5 +84,23 @@ describe("validate capabilities API", () => {
       const parameterValue = await hasFioriCapabilities();
       expect(parameterValue).to.be.true;
     });
+    it("should return false when Cap extension does not exist", async () => {
+      extensionsMock
+        .expects("getExtension")
+        .withExactArgs(CAP_EXTENSION_ID)
+        .returns(undefined);
+      const parameterValue = await hasCapCapabilities();
+      expect(parameterValue).to.be.false;
+    });
+
+    it("should return true when Cap extension exists", async () => {
+      const extension = { id: CAP_EXTENSION_ID };
+      extensionsMock
+        .expects("getExtension")
+        .withExactArgs(CAP_EXTENSION_ID)
+        .returns(extension);
+      const parameterValue = await hasCapCapabilities();
+      expect(parameterValue).to.be.true;
+    });
   });
 });