Microsoft announced that the Copilot Studio extension for the Visual Studio Code (VS Code) integrated development environment is now available to all users.

Developers can use it to build and manage Copilot Studio agents directly from VS Code using standard software development workflows.

The VS Code cross-platform code editor is used by a large number of developers worldwide to write and review code, with Git integration and support for CI/CD pipelines.

It comes with support for extensions that extend the core capabilities of the IDE, such as more integration choices for tools and services, or modification and customization options.

The Copilot Studio extension enables developers to treat Copilot Studio agents as code, integrating them into the development workflow.

Microsoft says that opens up the following capabilities:

1. Developers can pull the full agent definition from Microsoft Copilot Studio into a local workspace, making the full context of the agent available.
2. Agent components can be modified in VSCode using a structured definition format; IDE features like syntax highlighting and IntelliSense-style completion are available to reduce errors.
3. Changes can be previewed and compared against the cloud version, helping teams resolve conflicts and avoid overwriting each other’s work.
4. Updates are synced to the cloud to test agent behavior and evaluate iterations
5. Agent definitions can be versioned in Git and integrated into standard deployment pipelines, allowing agents to move through environments with the same rigor as code.

Microsoft says that the extension is designed for development teams managing complex or collaborative agent projects, supporting standard Git integration, request-based review pulling, modification history, and commonly used keyboard shortcuts.

It also integrates with AI coding assistants such as GitHub Copilot and Claude Code, enabling faster drafting, updating, and troubleshooting of agent definitions.

The Copilot Studio extension is available for free on the VSCode Marketplace and has already been downloaded more than 13,000 times.

In July 2025, Microsoft announced that it would open-source the GitHub Copilot Chat extension for VS Code, giving the developer community access to the full implementation of the chat-based coding assistant, including the "agent mode."

While the two serve different purposes, as Copilot Chat focuses on AI-assisted coding inside the editor, while Copilot Studio targets the development and lifecycle management of AI agents, both moves reinforce VSCode’s role as Microsoft’s primary surface for AI-driven development workflows, moving away from browser-centric AI tools.