Visual Studio Code Makes AI Agent Workflows Faster

Visual Studio Code 1.130 is now available with agent host improvements, faster code review workflows, clearer chat visibility, and smarter terminal link handling.

Microsoft released the update one week after Visual Studio Code 1.129, continuing its focus on AI-assisted development and agent-based coding workflows.

Visual Studio Code 1.130 Introduces a Dedicated Agent Host

Microsoft is rearchitecting agent sessions around a dedicated agent host.

The agent host can run different AI harnesses, including Copilot, Claude, and Codex, through the Agent Host Protocol.

Agent sessions run in separate processes instead of remaining tied to a single editor window. Developers can also access the same sessions across multiple Visual Studio Code windows.

Microsoft is gradually rolling out the new architecture in both the main editor and the Agents window.

Agents Window Gets Clearer Review Tools

Visual Studio Code 1.130 improves how developers review changes made by coding agents.

File headers now display live insertion and deletion counts, making it easier to understand the size of each change.

Multi-file diffs use a more compact layout, allowing developers to review more changes without excessive scrolling.

Quick chats also appear as compact, single-line entries instead of occupying additional space in the session view.

Worktree Isolation Expands to More Agents

Worktree isolation now works across every agent harness running through the dedicated agent host.

This feature allows agents to work in isolated Git worktrees, reducing the risk of conflicts with files in the developer’s active workspace.

Developers can run multiple agent tasks without allowing one session to overwrite or interfere with another session’s changes.

Assisted Permissions Reduce Approval Interruptions

Visual Studio Code 1.130 introduces assisted permissions for long-running agent tasks.

Language models can evaluate the potential risk of individual tool calls before they run.

Lower-risk actions can proceed automatically, while higher-risk operations can continue to require explicit user approval.

Microsoft designed the feature to reduce repetitive permission prompts without removing protection for potentially sensitive actions.

Git Diff Links Now Open the Correct Files

The update also improves how Visual Studio Code handles clickable file links inside Git diffs and terminal output.

VS Code now recognizes mnemonic file prefixes such as:

• i/ for the Git index
• w/ for the working tree

It also supports numeric 1/ and 2/ prefixes generated by commands such as git diff –no-index.

Visual Studio Code automatically removes the prefix and opens the correct file instead of treating the full prefixed path as the file location.

This change should make it easier to navigate modified files directly from Git output.

Visual Studio Code 1.130 Availability

Visual Studio Code 1.130 is rolling out with improvements focused on agent reliability, code review visibility, permission management, and Git workflow navigation.

The dedicated agent host remains under gradual deployment, so some users may receive the new agent features before others.

In other Microsoft news, Microsoft is investigating an Exchange Online issue that incorrectly quarantines customer mailboxes. The company has also detailed recommended methods for hardening Windows Server against modern cyberattacks.