Today at Ignite, we announced the General Availability of Agent Loop in Logic Apps Standard—bringing production-ready agentic automation to every customer. But GA is just the beginning. We’re also releasing a broad set of new and powerful AI-first capabilities in Public Preview that dramatically expand what developers can build: run agents in the Consumption SKU ,bring your own models through APIM AI Gateway, call any tool through MCP, deploy agents directly into Teams, secure RAG with document-level permissions, onboard with Okta, and build in a completely redesigned workflow designer.
With these preview features layered on top of GA, customers can build AI applications that bring together secure tool calling, user identity, governance, observability, and integration with their existing systems—whether they’re running in Standard, Consumption, or the Microsoft 365 ecosystem.
Here’s a closer look at the new capabilities now available in Public Preview.
Public Preview of Agentic Workflows in Consumption SKU
Agent Loop is now available in Azure Logic Apps Consumption, bringing autonomous and conversational AI agents to everyone through a fully serverless, pay-as-you-go experience. You can now turn any workflow into an intelligent workflow using the agent loop action—without provisioning infrastructure or managing AI models.
This release provides instant onboarding, simple authentication, and a frictionless entry point for building agentic automation. Customers can also tap into Logic Apps’ ecosystem of 1,400+ connectors for tool calling and system integrations.
This update makes AI-powered automation accessible for rapid prototyping while still offering a clear path to scale and production-ready deployments in Logic Apps Standard, including BYOM, VNET integration, and enterprise-grade controls. Preview limitations include limited regions, no VS Code local development, and no nested agents or MCP tools yet.
Read more about this in our announcement blog!
Bring your Own Model
We’re excited to introduce Bring Your Own Model (BYOM) support in Agent Loop for Logic Apps Standard - making it possible to use any AI model in your agentic workflows from Foundry, and even on-prem or private cloud models.
The key highlight of this feature is the deep integration with the Azure API Management (APIM) AI Gateway, which now serves as the control plane for how Agent Loop connects to models. Instead of wiring agents directly to individual endpoints, AI Gateway creates a single, governed interface that manages authentication, keys, rate limits, and quotas in one place. It provides built-in monitoring, logging, and observability, giving you full visibility into every request. It also ensures a consistent API shape for model interactions, so your workflows remain stable even as backends evolve. With AI Gateway in front, you can test, upgrade, and refine your model configuration without changing your Logic Apps, making model management safer, more predictable, and easier to operate at scale.
Beyond AI Gateway, Agent Loop also supports:
- Direct external model integration when you want lightweight, point-to-point access to a third-party model API.
- Local/VNET model integration for on-prem, private cloud, or custom fine-tuned models that require strict data residency and private networking.
Together, these capabilities let you treat the model as a pluggable component - start with the model you have today, bring in specialized or cost-optimized models as needed, and maintain enterprise-grade governance, security, and observability throughout. This makes Logic Apps one of the most flexible platforms for building model-agnostic, production-ready AI agent workflows.
Ready to try this out? Go to http://aka.ms/agentloop/byom to learn more and get started.
MCP support for Agent Loop in Logic Apps Standard
Agent Loop in Azure Logic Apps Standard now supports the Model Context Protocol (MCP), enabling agents to discover and call external tools through an open, standardized interface. This brings powerful, flexible tool extensibility to both conversational and autonomous agents.
Agent Loop offers three ways to bring MCP tools into your workflows:
- Bring Your Own MCP connector – Point to any external MCP server using its URL and credentials, instantly surfacing its published tools in your agent.
- Managed MCP connector – Access Azure-hosted MCP servers through the familiar managed connector experience, with shared connections and Azure-managed catalogs.
- Custom MCP connector – Build and publish your own OpenAPI-based MCP connector to expose private or tenant-scoped MCP servers. Idea for reusability of MCPs across organization.
Managed and Custom MCP connectors support on-behalf-of (OBO) authentication, allowing agents to call MCP tools using the end user’s identity. This provides user-context-aware, permission-sensitive tool access across your intelligent workflows.
Want to learn more – check out our announcement blog and how-to documents.
Deploy Conversational Agents to Teams/M365
Workflows with conversational agents in Logic Apps can now be deployed directly into Microsoft Teams, so your agentic workflows show up where your users already live all day. Instead of going to a separate app or portal, employees can ask the agent questions, kick off approvals, check order or incident status, or look up internal policies right from a Teams chat or channel. The agent becomes just another teammate in the conversation—joining stand-ups, project chats, and support rooms as a first-class participant.
Because the same Logic Apps agent can also be wired into other Microsoft 365 experiences that speak to Bots and web endpoints, this opens the door to a consistent and personalized “organization copilot” that follows users across the M365 ecosystem: Teams for chat, meetings, and channels today, and additional surfaces over time. Azure Bot Service and your proxy handle identity, tokens, and routing, while Logic Apps takes care of reasoning, tools, and back-end systems. The result is an agent that feels native to Teams and Microsoft 365—secure, governed, and always just one @mention away.
Ready to bring your agentic workflows into Teams? Here’s how to get started.
Secure Knowledge Retrieval for AI Agents in Logic Apps
We’ve added native document-level authorization to Agent Loop by integrating Azure AI Search ACLs. This ensures AI agents only retrieve information the requesting user is permitted to access—making RAG workflows secure, compliant, and permission-aware by default.
Documents are indexed with user or group permissions, and Agent Loop automatically applies those permissions during search using the caller’s principal ID or group memberships. Only authorized documents reach the LLM, preventing accidental exposure of sensitive data.
This simplifies development, removes custom security code, and allows a single agent to safely serve users with different access levels—whether for HR, IT, or internal knowledge assistants.
Here is our blogpost to learn more about this feature.
Okta
Agent Loop now supports Okta as an identity provider for conversational agents, alongside Microsoft Entra ID. This makes it easy for organizations using Okta for workforce identity to pass authenticated user context—including user attributes, group membership, and permissions—directly into the agent at runtime. Agents can now make user-aware decisions, enforce access rules, personalize responses, and execute tools with proper user context. This update helps enterprises adopt Agent Loop without changing their existing identity architecture and enables secure, policy-aligned AI interactions across both Okta and Entra environments.
Setting up Okta as the identity provider requires a few steps and they are all explained in details here at Logic Apps Labs.
Designer makeover!
We’ve introduced a major redesign of the Azure Logic Apps designer, now in Public Preview for Standard workflows. This release marks the beginning of a broader modernization effort to make building, testing, and operating workflows faster, cleaner, and more intuitive.
The new designer focuses on reducing friction and streamlining the development loop. You now land directly in the designer when creating a workflow, with plans to remove early decisions like stateful/stateless or agentic setup. The interface has been simplified into a single unified view, bringing together the visual canvas, code view, settings, and run history so you no longer switch between blades.
A major addition is Draft Mode with auto-save, which preserves your work every few seconds without impacting production. Drafts can be tested safely and only go live when you choose to publish—without restarting the app during editing. Search has also been completely rebuilt for speed and accuracy, powered by backend indexing instead of loading thousands of connectors upfront.
The designer now supports sticky notes and markdown, making it easy to document workflows directly on the canvas. Monitoring is integrated into the same page, letting you switch between runs instantly and compare draft and published results. A new hierarchical timeline view improves debugging by showing every action executed in order.
This release is just the start—many more improvements and a unified designer experience across Logic Apps are on the way as we continue to iterate based on your feedback.
Learn more about the designer updates in our announcement blog !
What's Next
We’d love your feedback. Which capabilities should we prioritize, and what would create the biggest impact for your organization?
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