TLDR: Microsoft’s Visual Studio Code September 2025 release (v1.105.0) introduces substantial AI-driven improvements across chat, agents, and the Model Context Protocol, alongside general productivity upgrades and enhanced accessibility. Key updates include expanded chat and agent support with fully-qualified tool names, improved editing controls for custom models, and faster session navigation.
Microsoft has rolled out its September 2025 release of Visual Studio Code (version 1.105.0), bringing a suite of major AI-driven enhancements to the popular code editor. This update focuses on deeply integrating artificial intelligence into developer workflows, refining chat functionalities, and bolstering the underlying Model Context Protocol (MCP).
Among the most notable improvements is the expanded support for AI chat and agents. Developers will now benefit from agents gaining fully-qualified tool names, offering more precise control and interaction. The release also features improved editing controls for custom models, allowing for greater flexibility in tailoring AI behavior. Navigation within chat sessions has been streamlined with new shortcuts and an enhanced Chat Sessions view, promising a more fluid user experience. The introduction of chain-of-thought display further aids in understanding the AI’s reasoning process.
Underpinning these advancements, the Model Context Protocol (MCP) has transitioned into preview-strength features. This includes an integrated MCP marketplace, providing easier discovery and installation of extensions and models. Autostart options, richer resource previews, and updated MCP defaults and icons are designed to facilitate seamless interoperability between extensions and AI models.
Beyond AI, the update also brings general productivity improvements. Quick Input shortcuts are now rebindable commands, offering greater customization. AI-assisted merge conflict resolution aims to simplify complex code integration. Chat-specific terminal profiles and experimental auto-reply to terminal prompts enhance the terminal experience. Persistent task terminal titles ensure better organization of ongoing tasks.
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Platform integration has also seen progress. Operating system notification toasts can now alert users to chat responses and long-running tasks, keeping developers informed without needing to constantly monitor the editor. macOS users will appreciate native broker authentication for Microsoft accounts, while GitHub authentication gains PKCE support, enhancing security.
