The initial state of the embedded assembler, ARM or Thumb state, is determined by the initial state of the compiler, as specified on the command line. This means that:

The embedded assembler state at the start of each function is as set by the invocation of the compiler, as modified by #pragma arm and #pragma thumb pragmas.

You can change the state of the embedded assembler within a function by using explicit ARM, THUMB, or CODE16 directives in the embedded assembler function. Such a directive within an __asm function does not affect the ARM or Thumb state of subsequent __asm functions.

If you are compiling for a Thumb-2 capable processor, you can use Thumb-2 instructions when in Thumb state.