Microsoft lands Visual Studio Code 1.130 with agent rearchitecturing

Visual Studio Code 1.130 brings some agent host rearchitecturing and an option to reduce approval interruptions during large agent tasks.

Another week has passed us by which means it is time for Microsoft to drop a new release of Visual Studio Code, this time it’s version 1.130. This week, the Redmond giant focused on agent host improvements, faster review workflows in the Agents window, better chat visibility, and smarter terminal link handling.

One of Microsoft’s latest efforts is to rearchitect agent sessions around the agent a host, a process that runs agent harnesses like Copilot, Claude, and Codex based on the Agent Host Protocol (AHP). A benefit of this is that sessions live in their own processes so they can be rendered from multiple VS Code windows at once. The firm is rolling the agent host out to users progressively in the editor window and the Agents window. Check out Microsoft’s instructions on opting-in if you can’t wait for the rollout.

Staying with agents, Microsoft has made some improvements to the Agents window (in preview right now) that make it easier to review changes and manage chats. Here are the improvements to the Agents window:

• File-level diff stats: Each file header in the Changes editor shows live insertion and deletion counts next to the file path.
• Compact multi-file diff view: The multi-file diff uses a more compact gutter that removes empty space before the code.
• Compact quick chats: Quick chats, which run on the agent host, use compact, single-line rows in the sessions list.
• Worktree support for all agent harnesses: Agent harnesses running on the agent host support worktree isolation. The New Worktree checkbox in the Agents window was previously only supported by the Copilot harness.

Another change in this update affects users who use long-running agent tasks. With the assisted permissions feature, the language model is able to evaluate the risk of each tool to decide whether it can run automatically or requires approval. Microsoft says that this feature helps you to reduce approval interruptions by letting the model evaluate the tool call risk during agent tasks.

Finally, Visual Studio Code 1.130 gives you clickable file links in Git diffs with mnemonic prefixes. The IDE recognizes prefixes like i/ for the index and w/ for the working tree, removes the prefix from the link target and opens the correct file. With mnemonic prefixes enabled, VS Code will also recognize numeric 1/ and 2/ prefixes produced by git diff –no-index.

The new update should be presented to you within VS Code automatically. If you don’t have VS Code, you can download this new version here.

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Posted Friday 24 July 2026 at 7:48 am AEST (my time).

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