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The war/ directory uses the WAR standard layout for bundling web applications. (WAR archive files are not yet supported by the SDK.) The Eclipse plugin uses this directory for running the development server, and for deploying the app to App Engine. When Eclipse builds your project, it creates a directory named classes/ in war/WEB-INF/, and puts compiled class files here. Eclipse also copies non-source files found in src/ to war/WEB-INF/classes/, including META-INF/ and the log4j.properties and logging.properties files. The final contents of the war/ directory make up your application for testing and deployment. For details about the new project that the plugin creates, see the Getting Started Guide.