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, 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 . 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 , released July 13. An update, VS Code 1.129.1, fixes three bugs including remote agent hosts failing to start.
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