Ship production ready AI agents with unified experience across AI Toolkit and Foundry extension
March brings another milestone for AI Toolkit! Version 0.32.0 is packed with new capabilities designed to help you ship production ready AI agents. This release brings a unified tree view experience, Agent Builder enhancements, and streamlined GitHub Copilot integration for agent development.
🗂️ Streamlined User Experience across AI Toolkit and Foundry Extension
We've heard your feedback loud and clear: navigating between the AI Toolkit and Microsoft Foundry extensions could sometimes feel confusing. To simplify your workflow, we are consolidating the user experience. We've merged the Foundry sidebar directly into AI Toolkit, allowing you to access the power of both extensions.
- Unified My Resources View: The AI Toolkit and Foundry extension sidebar panels have been unified into a single My Resources view. Local resources (models, agents, tools) are grouped under a Local Resources node, with Foundry remote resources appearing right alongside them. All nodes are collapsed by default and preserve their state across sessions.
- Developer Tools View Mode: The Developer Tools panel now supports two switchable layouts, accessible from the panel title menu: Group by Lifecycle (organizes entries into Discover, Build, and Monitor stages) or Group by Resource (groups them into Agent Dev Tools and Model Tools).
- Foundry Visual Cues: Foundry agents and models now have dedicated icons to distinguish them from local resources at a glance. Additionally, Foundry Model Licenses are now displayed directly in the model catalog.
- Inline Setup: If Foundry is installed but not yet configured, a setup prompt is shown inline instead of an empty panel.
As part of the sidebar convergence between AI Toolkit and Foundry extension, The Foundry sidebar will retire on June 1st, 2026. All of its functionalities have been moved into AI Toolkit sidebar.
🛠️ Unified Create Agent Experience
We've introduced a Create Agent View, serving as a new unified entry point for creating AI agents. It offers two distinct paths side by side:
- Create in Code with Full Control: Scaffold a project from a template, or generate a single agent or multi-agent workflow using GitHub Copilot.
- Design an Agent Without Code: Launch Agent Builder directly to configure a prompt agent through the UI.
🤖 GitHub Copilot Agent Development: Build with Skills
Agent code generation, evaluation, and deployment now uses the open-source Microsoft foundry skill from —the same source used by GitHub Copilot for Azure. AI Toolkit automatically installs and keeps this skill up to date, requiring no manual setup.
It is more important than ever to build with skills. We've optimized the toolkit so you can seamlessly use skills to help you build agents directly within your workflow, taking full advantage of the deep Copilot integration.
🧱 Agent Builder Enhancements
Agent Builder continues to receive major usability and functional upgrades:
- Conversations View for Foundry Agents: A dedicated Conversations tab is now available, making it easier to review and manage conversation history when working with Foundry agents.
- Auto-Save: Draft agents are now automatically saved before running in the playground, preventing any accidental loss of unsaved changes.
- Seamless Foundry Integration: Open Foundry prompt agents directly in Agent Builder from the Foundry extension. You can also generate and refine agent instructions using the Foundry Prompt Optimizer.
- MCP Tool Approval: Configure auto or manual approval for MCP tool calls in Agent Builder, giving you complete control over how tool invocations are handled during agent runs.
- View Code for Workspace Scaffolding: Added View Code support to scaffold a workspace for Foundry agents, letting you quickly generate the project structure needed to get started.
🧪 Evaluation Framework Updates
- Updated the VS Code Skill to use the pytest-agent-evals SDK for running agent evaluations, perfectly aligned with the latest evaluation framework.
✨ Wrapping up
Version 0.32.0 is a big step forward for AI Toolkit. You can get started today with AI Toolkit:
- 📥 Download: Install the AI Toolkit from the Visual Studio Code Marketplace
- 📖 Learn: Explore our comprehensive AI Toolkit Documentation
As always, we'd love your feedback—keep it coming, and happy agent building! 🚀 Whether it's a feature request, bug report, or feedback on your experience, join the conversation and contribute directly on our GitHub repository.
Microsoft