What’s new in Microsoft 365 Copilot | July 2025

 

Welcome to the July 2025 edition of What's new in Microsoft 365 Copilot! Every month, we highlight new features and enhancements to keep Microsoft 365 admins up to date with Copilot features that help your users be more productive and efficient in the apps they use every day.

Let’s take a closer look at what’s new this month:

Copilot Control System: 

• New reports and controls in Microsoft 365 admin center
• Enhanced group drilldown in Copilot Dashboard
• Govern agents with embedded knowledge sources
• More visibility and control of Copilot and agents with Microsoft Purview

User capabilities: 

• Voice interaction in Copilot Chat on mobile
• Enhancements to conversation history, access, and grounding sources in Copilot Chat
• New webpart and functionality for SharePoint agents
• Interpreter availability in Teams
• Use Copilot without transcription or recording in Copilot in Teams
• Create new content with Copilot Notebooks
• Creating, grounding and writing code with Copilot Pages
• Rewrite with Microsoft 365 Copilot in Edge
• Use agents within Copilot in classic Outlook
• Reference an Excel file with Copilot in PowerPoint
• Audio overview, formatting and prompt history with Copilot in Word

Copilot Control System

New reports and controls in Microsoft 365 admin center

A new agents usage report in the Microsoft 365 admin center will include agents in Microsoft 365 Copilot and Copilot Chat with usage by both Microsoft 365 Copilot licensed and unlicensed users. The report will include total active agent users, total active agents, active users segmentation by licensed and unlicensed users, and active users and active agents segmentation by publisher type (i.e. user-created agents, agents built by your org, agents built by Microsoft, agents built by Microsoft partners). The report will also include usage details per user, agent, and user-agent pair. This feature is available in preview in late July and rolling out in September.

 

Now, organizations can enable SharePoint agents through a flexible pay-as-you-go (PAYG) model directly in the Microsoft 365 admin center. The option can be enabled under Copilot > Billing & usage > Pay-as-you-go services. Admins can configure departmental billing policies linked to the SharePoint agents PAYG service in Microsoft 365, enabling access to SharePoint agents for users without a full Microsoft 365 Copilot license. This feature rolled out in July. 

 

The Microsoft 365 Copilot PAYG billing model enables flexible usage-based access to AI-powered capabilities in Microsoft 365 for users without a full Microsoft 365 Copilot license. With the introduction of budgets, organizations can now define, monitor and enforce spending across departments or user groups. These new capabilities include per-billing-policy configurable budget thresholds with customizable alerting and reset frequencies, enabling precise department-level cost governance and accountability for PAYG services. This feature rolled out in July.

 

Copilot Search in Microsoft 365 Copilot delivers a unified, AI-powered search experience that helps users find, understand, and act on information across Microsoft 365 and connected third-party systems. By leveraging Microsoft Graph, organizational context, and natural language understanding, it transforms traditional search into a personalized, task-oriented assistant, bridging the gap between discovery and execution. Additionally, a new management experience in the Microsoft 365 admin center provides AI admins with centralized tools to configure and customize the Copilot Search experience. This includes options such as using curated bookmarks and acronyms, maximizing the value of Copilot Search for both users and the organization. This feature rolled out in July.

 

Pinning Microsoft 365 Copilot to the Windows taskbar for enterprises just got a lot easier and is now a separate setting in the Copilot Control System. This change helps IT admins minimize disruption to existing settings while providing an easy tenant-wide opt-in solution. Users still retain the flexibility to pin or unpin the Microsoft 365 Copilot app. The setting is available in the Copilot Control System section of the Microsoft 365 admin center. This feature rolled out in July.

 

Enhanced group drilldown in Copilot Dashboard

Soon, leaders and managers using the Copilot Dashboard can explore metrics within their direct teams and also across indirect groups—specifically, those one level below in their organizational structure.

This capability enables side-by-side comparisons of groups within a leader’s chain of command, unlocking a new layer of visibility into Copilot adoption and impact. This feature rolled out in July.

 

Govern agents with embedded knowledge sources

To ensure data protection and compliance, each agent created using Copilot Studio agent builder inherits the highest sensitivity label among all its referenced knowledge sources. If any file used for grounding is labeled “Confidential,” the agent will operate under that same classification, ensuring consistent enforcement of Microsoft Purview policies. Under Agents & connectors, admins can also filter and view agents that use embedded knowledge sources, review agent metadata including sensitivity labels and file containers, and take lifecycle actions such as blocking or deleting agents. By enforcing the most restrictive sensitivity label across all agent interactions, organizations can prevent data leakage and ensure compliance with internal and regulatory standards. Learn more about managing agents with embedded file content. This feature rolled out in June.

 

More visibility and control of Copilot and agents with Microsoft Purview

Microsoft Purview is making it easier for organizations to use AI responsibly - keeping sensitive data safe while still getting the benefits of Copilot.

• Transparent web search: To help organizations maintain visibility and control over how Copilot uses web search, Microsoft has introduced transparency features for IT administrators. Previously, admins could track Copilot’s web search activity using tools like Microsoft Purview Audit and eDiscovery. Now administrators can view the actual web search terms Copilot used, right alongside the original prompt, the response, and any supporting resources. This information is available in Activity Explorer within Microsoft Purview Data Security Posture Management (DSPM) for AI. This feature rolled out in July.

 

• Activity Explorer filter for Copilot web search: Additionally, there’s a new filter in Activity Explorer that lets admins quickly find and review interactions where Copilot used a web search. This makes it simpler to monitor how web content is being used to inform responses and ensure that everything aligns with an organization’s data security policies. Learn more about web queries in DSPM for AI activity explorer. This feature rolled out in July.

 

• Data Loss Prevention (DLP) now available: DLP for Microsoft 365 Copilot and Agents is now generally available, enabling businesses to prevent Copilot from accessing, processing, or even mentioning files that have specified sensitivity labels. This includes new tools to help security teams such as alerts when something needs attention, and a safe “simulation mode” to test DLP settings in before enabling them. Learn more about how to protect your data with Data Loss Prevention (DLP) for Microsoft 365 Copilot and Agents. This feature rolled out in June.

 

• Restrict Copilot processing on emails with sensitivity labels: DLP for M365 Copilot policies have been expanded to also prevent Copilot from processing emails with sensitivity labels. Like files, this feature prevents Copilot from accessing, processing, or even mentioning files that have specified sensitivity labels. This feature is available now in Public Preview and rolling out in August.

 

• Copilot page in Data Security Posture Management (DSPM) for AI: Now IT admins have a new, dedicated page in DSPM for AI. This page gives a clear view of how data is being used, along with helpful insights into trends and potential risks. It also includes tailored reports and recommendations designed specifically for Microsoft 365 Copilot. These resources make it easier to govern and protect the use of Copilot responsibly. This feature rolled out in July.

 

• Oversharing checks for OneDrive: As more organizations start using Microsoft 365 Copilot, it’s easier than ever for sensitive information to show up where it shouldn’t — in prompts, responses, or shared files. This often happens because someone has the wrong access permissions. That’s where DSPM for AI Oversharing Assessments come in. This tool helps you stay in control by finding places where too much information is being shared and showing you how to fix it. Originally launched to scan SharePoint sites, oversharing assessments now also work with OneDrive for Business. This means you can identify and address risks in even more of your cloud storage, keeping your data safer and your team more confident. This feature is available in Preview now and rolling out in September.

 

User capabilities

Voice interaction in Copilot Chat on mobile

Users can soon interact with Copilot in a new way—with voice. In the Microsoft 365 Copilot mobile app on iOS, voice interaction will unlock a faster, more intuitive way to work on the go. Whether catching up between meetings, brainstorming aloud, or navigating complex tasks, voice interaction helps users stay productive without breaking the flow. This feature is rolling out first to Microsoft 365 Copilot users in August.

 

Enhancements to conversation history, access, and grounding sources in Copilot Chat

Conversation history in Copilot Chat will soon have several improvements to make it easier to find past conversations. Users can access conversation history by selecting it from the nested options underneath Chat in the left navigation of the Microsoft 365 Copilot app. Additionally, users can filter their history on different workflows to find the conversations that matter to them most. Finally, for better context recall, they can filter conversations by Agents used or if the conversation included content added to a Page. These features are rolling out in August.

 

Copilot Chat is unifying conversation history to make it easier to find conversations. Previously, chats had distinct conversation histories, so users needed to remember the conversation they were looking for. Now a user’s conversation history includes all their past conversations across all Microsoft apps, so they can easily find conversations and pick up where they left off. This feature is rolling out in August.

 

When using the ContextIQ menu in Copilot Chat, users can ground their prompts on new sources. When a user types a forward slash (/) or selects the “Add content” button in the prompt box, they can select content from different sources. Soon, users can ground their prompts on Loop workspaces, Teams chats, and Teams channels.

• Copilot Notebooks: With Copilot Notebooks, users collaborate in real time and keep tasks and content organized. Now users can bring that information into Copilot Chat by adding a Notebook to their prompt using the ContextIQ menu. This feature is rolling out in August.

 

• Teams Chats: Soon users will see a new category called Chats in the ContextIQ menu. This will enable Copilot Chat to include the context of Teams chats, so users can ask questions, get insights, or recap a chat right from Copilot Chat. This feature is rolling out in August.

Additionally, Copilot Chat will support even more file types when users ground their prompts, letting them bring AI into even more of their workflows. Newly supported files include email stored as files in SharePoint, CAD files, XMLs, and even transcripts from videos not recorded in Teams. With this change, the supported file types in Copilot Chat will match those of the Microsoft Search experience. This feature is rolling out in August.

 

New webpart and functionality for SharePoint agents

The new agents webpart for SharePoint now makes it easier than ever to connect users with the right AI agent, right where they need it. SharePoint site editors can now link to agents directly on SharePoint sites. When selected, the agent opens in the side pane of the page, enabling seamless, in-context assistance. Editors can search for agents by name or pick recent ones, customize the link’s size and title, and publish in just a few clicks. This feature is rolling out in August.

 

Teams group chats are getting smarter with the help of SharePoint agents. Users can add multiple SharePoint agents into a single group chat. Whether working across specs, planning content, or just reviewing documents, each agent can bring its own knowledge and capabilities into the conversation. This feature is rolling out in August.

 

The power of agents built in SharePoint will soon be available directly in Teams channels. This capability lets users interact with document-grounded agents via simple @mentions, surfacing summaries, answers, and file insights without ever leaving the channel. Adding agents to Teams Channels is just like adding them to a group chat: users simply copy the link to the agent from SharePoint and drop it into a channel post or reply. This feature is rolling out in August.

 

Interpreter availability in Teams

With Interpreter, users can now speak and listen in their preferred language, thanks to advanced real-time speech-to-speech interpretation. Designed for seamless collaboration across global teams, Interpreter eliminates language barriers in meetings. Whether presenting in English while colleagues listen in Japanese, or collaborating in Spanish while responding in French, each participant can engage naturally in the language of their choice. Interpreter currently supports nine languages including Chinese (Mandarin), English, French, German, Italian, Japanese, Korean, Portuguese (Brazil), and Spanish. Two hours of interpretation are included per user per month with a Microsoft 365 Copilot subscription license. Usage exceeding two hours per user per month may incur additional charges. Usage limits and additional terms may apply. Interpreter rolled out in July.

 

Use Copilot without transcription or recording in Copilot in Teams

Now, users can benefit from Copilot during live Teams call sessions with sensitive conversations where a persistent record is not desired. When the admin enables this option, users can initiate Copilot without transcription or recording simply through clicking the Copilot button in the header menu, so they can use important Copilot administrative tasks such as capturing key points, task owners, and next steps, enabling participants to stay focused on the content of the call. This feature rolled out in July.

 

Users can now access Copilot Chat with web grounding directly from Teams Chat. Copilot Chat is now pinned at the top of the Chat list just above the “Discover” option. This update simplifies navigation and enhances discoverability, helping users explore Microsoft 365 Copilot in the context of everyday conversations. This feature rolled out in June.

 

Create new content with Copilot Notebooks

With the new Brief button in Copilot Notebooks, users can generate a brief from their notebook content with a single click. By using existing notes, documents, and artifacts, they can organize key information and prepare for their next meeting. This feature is rolling out in August.

 

Copilot Notebooks users can look forward to a one-click FAQ Page feature, which enables them to create FAQ pages from their notebook content quickly. This feature helps users organize key information and provide clear answers to common questions. This feature is rolling out in August.

 

Now users can open and interact with their web-created notebooks directly from their mobile devices, making it easier to stay connected to their work wherever they are. Whether reviewing notes between meetings or referencing grounded content on the go, Copilot Notebooks on mobile brings added flexibility and convenience to your workflow. This feature rolled out in July on the Microsoft 365 mobile app.

 

Copilot Notebooks now supports grounding on up to 100 files. This enhancement allows users to bring significantly more context into their notebooks without compromising response quality. Whether you're working across multiple documents or assembling insights from a broad set of sources, this update makes Copilot Notebooks even more powerful for deep, multi-source work. This feature rolled out in July.

 

Creating, grounding and writing code with Copilot Pages

Soon users can create a new Copilot Page simply by telling Copilot how they'd like to get started. Copilot will open a Page automatically, and AI-generated content will stream in real time. Users will experience smooth, dynamic drafting that keeps up with their creativity and eliminates extra steps. This will make creating and collaborating on content faster, smarter, and more intuitive than ever. This feature is rolling out in August.  

 

Copilot can soon ground on a user’s open Page to continue editing and adding content with Copilot Chat. This lets users collaborate in real time with Copilot and their colleagues, with everybody's changes seamlessly merged. Users maintain privacy and control of their material by selecting "Keep it" before adding content to a shared Copilot Page, so they can brainstorm, ask questions, and be bold without the fear of sharing ideas before they are ready. This feature is rolling out in August.

 

Developers can soon access a rich, code-only canvas to generate and refine code with Copilot. Whether drafting content, writing code, or co-editing with teammates, Copilot Pages will help get the job done. This feature is rolling out in August.

 

Rewrite with Microsoft 365 Copilot in Edge

Writing at work should feel effortless. But getting the tone, format, or length just right can slow users down. That’s where Rewrite with Microsoft 365 Copilot comes in. Built directly into Microsoft Edge, this in-line AI writing assistant helps users revise content in seconds. They simply highlight text, right-click, and choose “Rewrite with Microsoft 365 Copilot” (or press Alt + I). Whether they're drafting an email, blog post, or white paper, Copilot offers suggestions tailored to their tone (professional, casual, enthusiastic, and more), format, and length. Their message lands exactly how they want it to. Rewrite is fast, intuitive, and keeps the user’s authentic voice intact. With enterprise-grade data protection and seamless integration into your workflow, Rewrite helps users stay in flow and avoid getting stuck in edits. This feature rolled out in July.

 

Use agents within Copilot in classic Outlook

Users can soon use agents within Copilot Chat in classic Outlook for Windows and on Mac without leaving Outlook to access the power of agents for automating and executing business processes. From within the Outlook app, they simply select the Copilot icon to access agents from the M365 Copilot menu (similar to how users access agents using the Microsoft 365 Copilot app). This feature is rolling out in August for classic Outlook for Windows and Mac.

 

Reference an Excel file with Copilot in PowerPoint

Now when users create a new PowerPoint presentation using Microsoft 365 Copilot, they can use Excel files as a source. This enables them to bring in key existing tables and insights from the Excel file to create a polished, branded first draft. This feature rolled out in July.

 

Audio overview, formatting and prompt history with Copilot in Word

Now users can ask Copilot to generate an audio overview of a Word document right from the document snapshot. This podcast-style summary helps users absorb key insights hands-free, whether they’re multitasking or on the move. This feature rolled out in July in English in Word on web and Windows desktop.

 

Users can now preserve content formatting when generating text with Copilot in Word, ensuring a seamless and professional authoring experience. Copilot understands and respects more contextual formatting—whether the user is writing in a list, table, heading, or styled paragraph. This includes support for bold, italic, underline, and links, and ensures the generated text will better match the structure and basic formatting of the document. The result is a smoother authoring experience with less need for manual reformatting. This feature rolled out in web in June and is rolling out for Windows and Mac this fall.

 

Now users can pick up right where they left off by using the new “recent prompts” feature in the on-canvas prompt box. With this feature, the user’s previous prompt history is surfaced directly in the drafting experience—making it easier to revisit, reuse, or refine earlier ideas. Whether the user is iterating on a proposal or building out a report, Copilot helps them stay in flow and build on their momentum. This feature rolled out on Web in July.

 

Did you know? The Microsoft 365 Roadmap is where you can get the latest updates on productivity apps and intelligent cloud services. Microsoft 365 Copilot release notes is where you can see the Microsoft 365 Copilot features that are generally available (Current Channel for Microsoft 365 apps) and specific to each platform. Check back regularly to see what features are in development, coming soon and generally available. Please note that the dates mentioned in this article are tentative and subject to change.