Update to the code editor also brings an editor panel to the Agents window and the ability to run terminal commands directly from chat prompts.
Microsoft has released Visual Studio Code 1.129, an update to its free, popular code editor that features a dedicated agent host and an editor panel in the Agents window. The updated editor also allows users to run terminal commands from chat prompts with a !prefix and offers a preview of a modern UI for the workbench.
Released July 15, VS Code 1.129 can be downloaded from code.visualstudio.com for Windows, Linux, and Mac.
Microsoft is rearchitecting how agent sessions work in VS Code around the agent host — a dedicated process that runs agent harnesses such as Claude, Copilot, and Codex, based on the Agent Host Protocol (AHP). Since a session lives in its own process, the same session can be connected to and rendered from multiple VS Code windows at once. The agent host’s Copilot agent is powered by the Copilot SDK, which means that its behavior and functionality is aligned with the Copilot CLI, the standalone GitHub Copilot app, and other Copilot products. The agent host is being rolled out to users in the editor window and the Agents window. It’s enabled through the chat.agentHost.enabled setting.
The Agents window shows conversation with an agent next to a detail area for the files and changes it produces. This release introduces a redesigned editor panel that brings the editor and the detail area together into one docked pane with a shared tab bar, so reviewing an agent’s work feels like working in the main editor instead of switching between separate panels.
Other new features and improvements in VS Code 1.129:
- Users now can prefix chat messages with a
!to run their contents as terminal commands. This works in agent host sessions, both in the editor and in the Agents window. - Developers can now use Bring Your Own Key (BYOK) models in the Agents window when selecting the Copilot harness running on the agent host.
- Developers can preview a modernized VS Code UI that updates the look and feel of the editor workbench. This is currently an experimental feature that can be enabled with the
workbench.experimental.modernUIsetting.
VS Code 1.129 follows Visual Studio Code 1.128, released July 13. An update, VS Code 1.129.1, fixes three bugs including remote agent hosts failing to start.
