🚀 Foundry Toolkit for VS Code — August 2026 Update

This is the August round-up for the Foundry Toolkit for VS Code. Four releases shipped this month: 1.6.7, 1.6.8, 1.6.9, and 1.6.10.

August was about turning agent development into a workflow you can follow end to end — start from the right path, connect reusable tools and other agents, run with real user isolation, and inspect exactly where the time and tokens went.

Have feedback or hit a bug? File an issue on GitHub — the roadmap moves on what you tell us.

Highlights

• Prompt Agent toolboxes — attach a centrally managed toolbox, inspect its tools and skills, manage versions and approval policies, and configure nested tools without leaving Agent Builder. 1.6.10
• Agent-to-Agent connections (preview) — connect an Agent2Agent (A2A)-compatible agent from a configured connection, the Foundry account catalog, or a custom HTTPS endpoint. 1.6.10
• Agent Inspector Overview — read a latency waterfall and an ordered timeline of model, reasoning, and tool activity for all runs or one selected run. 1.6.9
• User-scoped Hosted Agent sessions — set a user identity so Responses conversations and session files stay isolated per user. 1.6.8
• A clearer Create Agent start — choose Microsoft Agent Framework, Copilot SDK, LangGraph, Copilot-assisted coding, Agent Builder, or the full sample catalog from one redesigned page. 1.6.9

🤖 Create Agents — start on the right path, then stay in context

Starting an agent shouldn't begin with choosing the wrong abstraction. The redesigned Create Agent page gives you direct routes to Microsoft Agent Framework, Copilot SDK, and LangGraph samples, Copilot-assisted coding, Agent Builder, and the complete sample catalog. You decide whether you want code, a guided build, or a prompt agent first — not after scaffolding the wrong project. 1.6.9

Hosted Agent setup is also less brittle. You can choose Skip for now during model setup even when existing deployments fail to load, then wire the model connection later. Administrator-connected Foundry models now appear alongside regular deployments in playgrounds and Hosted Agent creation, so the models your organization already configured are available where you build. 1.6.8 1.6.9

Once an agent is running, identity matters. The Hosted Agent Playground can now set a user identity for Responses conversations, keeping conversation state and session files isolated for each user instead of blending everyone into one test session. And when somebody sends you a Microsoft Foundry portal link, deep links can open that named Hosted Agent's Details or Optimization page directly in VS Code — not the portal home, not a search screen. 1.6.8 1.6.10

🔧 Toolboxes and A2A — connect capabilities once, reuse them

An agent with five tools can become five separate configurations, five approval stories, and five places to make the same update. Toolbox changes that shape: it packages centrally managed tools behind one Model Context Protocol (MCP)-compatible endpoint, with shared versioning and policy controls.

In August, Prompt Agents gained toolbox workflows inside Agent Builder. Open Add tools to browse toolboxes, or use Add to Prompt Agent from the Toolbox resource list. The attached toolbox appears as a collapsible card where you can inspect tools and skills, switch versions, configure approval policies and nested tools, replace or remove the toolbox, or opt out. You manage the collection — not a loose pile of one-off connections. 1.6.10

Agent-to-agent composition arrives in the same flow. Agent-to-Agent connections (preview) let you add an A2A-compatible agent from an existing connection, the Foundry account catalog, or a custom HTTPS endpoint. Attach it directly to a Prompt Agent or put it inside a toolbox for reuse across agents and runtimes. Your pipeline can now be agent → toolbox → specialist agent — with the connection managed as a real resource instead of buried in prompt text. 1.6.10

🔍 Agent Inspector — see the run, not just the answer

A final answer can look right while the run behind it is slow, expensive, or calling the wrong tool. Agent Inspector now gives you the sequence and the evidence.

The new default Overview tab shows every run or one selected run through two synchronized views: a latency waterfall and an ordered timeline of model, reasoning, and tool activity. Response footers add the model, duration, total tokens, and timestamp; hover over the token total to split input from output. Raw reasoning and reasoning summaries appear in separate collapsible sections when the agent provides them. 1.6.9

Tool inspection goes deeper in 1.6.10. Calls are grouped by response run, with status, call ID, arguments, and results, and each Responses event can show when it reached Agent Inspector. The Overview waterfall and timeline now scroll independently, while long streaming responses and Details views update more smoothly. You can move from "the tool failed" to the exact call and payload without reconstructing the run from chat bubbles. 1.6.10

The conversation itself is easier to drive: press Up or Down to recall and edit earlier requests without losing your unsent draft, or choose Clear Chat to reset the conversation plus Events and Details state. Pending MCP approvals and OAuth consent requests stay pinned above the input, with bulk actions and expandable details, until every decision is resolved. 1.6.7 1.6.9

🎯 Models and resources — faster to open, steadier when you return

Resource pages should remember your work, not reset it. Models and Tools now load the selected tab first and show core rows before fetching the extra details. When you return to Agents, Models, Tools, Knowledge, or Evaluations, the toolkit preserves rows, search, filters, and pagination while refreshing the active view in the background. A manual refresh still gets the latest service state when you ask for it. 1.6.7

The sidebar does less work too. Collapsed My Resources sections load only when you open them, while Search and Recent Agents remain available. Evaluations, Routines, Tools, Skills, and Toolboxes now share consistent loading feedback, and a direct link to Tools or Skills opens the requested tab without loading Toolboxes first. The result isn't a new destination — it's less waiting on the way there. 1.6.7 1.6.8

Model deployment guidance got one sharp fix as well: quota errors now open the token quota page for your current Foundry project, so the recovery path lands on the project that actually needs capacity. 1.6.10

💻 Activity protocol agents — debugging that matches the agent

Activity Protocol agents target Microsoft 365 channels, so local debugging should speak the same language. Newly scaffolded Python projects now open Microsoft 365 Agents Playground inside VS Code for local debugging. You stay in the editor and test the activity-shaped conversation before deployment instead of forcing it through an incompatible playground. 1.6.7

Copilot-assisted creation also follows the current Hosted Agent path: current Foundry project and model setup, a managed Python environment, workspace-root debugging, and the latest local run and deployment flow. When you reuse the selected Foundry project, Copilot no longer asks you to choose its Azure location again. 1.6.10

🪲 Fixes and polish

• Agent Inspector — streamed response and reasoning text stays complete; response text, reasoning, tool calls, and permission decisions keep their original order; replacement turns reject obsolete stream events; and unmatched tool calls or results no longer appear in Details. 1.6.9 1.6.10
• Approvals and consent — human-in-the-loop pauses no longer duplicate tool or approval cards, Clear Chat remains available while a turn waits, and continuation responses retain pending approvals until every request is resolved. 1.6.8 1.6.9
• Activity Protocol deployment — Azure Bot settings are validated before submission, compatible Bots are reused, identity and application ID conflicts get recovery guidance, and successful deployments no longer open an unsupported Agent Playground. 1.6.7 1.6.8
• Agent Builder and MCP OAuth — reopening a Foundry Prompt Agent preserves its selected version and tool configuration, while authorization callbacks complete only the matching connection request. 1.6.8
• Accessibility — screen readers announce Model Catalog actions, collapsible Agent Builder and Model Preference controls, and project and model fields with their labels and state; prompt placeholders also meet minimum contrast requirements. 1.6.10

⚠️ Breaking change and migration

• GitHub Models has been removed from the Model Catalog, playground, model comparison, Agent Builder, and evaluations following the service's retirement. If a saved workflow or evaluation references GitHub Models, open it and select another available model before running it again. 1.6.7

🚀 Get it and tell us what to build next

August connected the whole agent loop: choose the right starting point, reuse governed tools, compose agents through A2A, isolate real users, and inspect the run down to timing, tokens, arguments, and results.

• Install or update from the Visual Studio Code Marketplace.
• Read the docs — Foundry Toolkit for Visual Studio Code and the Microsoft Foundry documentation.
• Explore samples in the Microsoft Foundry samples repository.
• Browse the full changelog in WHATS_NEW.md.
• File issues and feature requests at github.com/microsoft/foundry-toolkit/issues.
• Join the Microsoft Foundry community on Discord.

Try a toolbox with your next Prompt Agent, open the run in Agent Inspector, and tell us where the workflow still slows you down.

Happy building. 🚀