Visual Studio Code update shines on coding agents

Microsoft has released Visual Studio Code 1.109, the latest update of the company’s popular code editor. The new release brings multiple enhancements for agents, including improvements for optimization, extensibility, security, and session management.

Released February 4 and also known as the January 2026 release, VS Code 1.109 can be downloaded for Windows, Linux, and macOS at code.visualstudio.com.

Microsoft with this release said it was evolving VS Code to become “the home for multi-agent development.” New session management capabilities allow developers to run multiple agent sessions in parallel across local, background, and cloud environments, all from a single view. Users can jump between sessions, track progress at a glance, and let agents work independently.

Agent Skills, now generally available and enabled by default, allow developers to package specialized capabilities or domain expertise into reusable workflows. Skill folders contain tested instructions for specific domains like testing strategies, API design, or performance optimization, Microsoft said.

A preview feature, Copilot Memory, allows developers to store and recall important information across sessions. Agents work smarter with Copilot Memory and experience faster code search with external indexing, according to Microsoft. Users can enable Copilot Memory by setting github.copilot.chat.copilotMemory.enabled to true.

VS Code 1.109 also adds Claude Agent support, enabling developers to leverage Anthropic’s agent SDK directly. The new release also adds support for MCP apps, which render interactive visualizations in chat. The update also introduces terminal sandboxing, an experimental capability that restricts file and network access for agent-executed commands, and auto-approval rules, which skip confirmation for safe operations.

VS Code 1.109 follows last month’s release of VS Code 1.108, which introduced support for agent skills. Other improvements in VS Code 1.109 include the following:

• For Chat UX, streaming improvements show progress as it happens, while support for thinking tokens in Claude models provide better visibility into what the model is thinking.
• For coding and editing, developers can customize the text color of matching brackets using the new editorBracketMatch.foreground color theme token.
• An integrated browser lets developers preview and inspect localhost sites directly in VS Code, complete with DevTools and authentication support. This is a preview feature.
• Terminal commands in chat now show richer details, including syntax highlighting and working directory. New options let developers customize sticky scroll and use terminals in restricted workspaces.
• A finalized Quick Input button APIs offer more control over input placement and toggle states. Proposed APIs would enable chat model providers to declare configuration schemas.