A new update to one of the world’s most widely used code editors is reshaping how developers interact with AI, introducing smarter agents, smoother collaboration, and stronger controls directly inside the development environment.
The January 2026 release of Visual Studio Code v1.109 delivers significant enhancements to GitHub Copilot. The update focuses on agent-driven workflows, improved session management, and expanded model support within the IDE.
A key highlight is public preview support for a Claude agent. Developers can now delegate tasks to Claude using Anthropic’s official agent SDK, accessed through a GitHub Copilot subscription. This expands agent extensibility across models and integrations.
Copilot chat interactions have also been upgraded. Support for MCP apps enables more interactive, tool-driven experiences inside VS Code. Chat performance is faster, with improved streaming responsiveness and higher-quality reasoning for more reliable answers and task execution. Developers also get better visibility into model reasoning through thinking tokens and agents that ask clarifying questions instead of making assumptions.
The inline editor chat has been redesigned to feel more natural and effective during in-context coding.
Multiagent development has seen major improvements. Enhanced session management allows developers to distribute work across Copilot, Claude, local agents, background agents, and cloud agents. Work can be handed off seamlessly, with the ability to step in when needed without breaking focus. A new agent status indicator highlights sessions requiring attention, while subagents can run in parallel to speed up completion.
Customization is another focus area. Agent orchestrations let teams build repeatable workflows tailored to projects. Agent Skills and organisation-wide settings help deliver more consistent results across developers and environments.
Several optimisations improve speed and intelligence. Copilot Memory allows agents to retain relevant context across interactions. Faster external indexing improves code search performance, especially in large repositories.
Security and trust controls have also been strengthened. Terminal command sandboxing, available experimentally on macOS and Linux, adds confidence when agents suggest or run commands. Auto-approval rules improve safety while reducing unnecessary prompts. Terminal lifecycle controls now support timeout, await, and kill actions.
Alongside Copilot updates, VS Code introduces broader productivity improvements. These include an integrated browser for testing apps inside the editor, terminal quality-of-life enhancements, refined coding and editor flows, and new APIs for extension developers.
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