We’re excited to share what’s new for Foundry Toolkit for Visual Studio Code at //build 2026. Since going generally available, the toolkit has kept moving fast, and this release is a big one. The headline: a complete, end-to-end Hosted Agent experience, scaffold, run, deploy, and observe without ever leaving VS Code. On top of that, we’ve expanded the Toolbox with native enterprise integrations and shipped a wave of LangGraph samples so every developer has a clear path from idea to production. From your first prompt to a production-grade, observable agent, Foundry Toolkit meets you where you are. 

Hosted Agents, End to End 

Building an agent is the easy part; getting it from a first draft to a production-grade, observable service is what matters. This release makes the full Hosted Agent lifecycle available in VS Code, and it follows the way you actually work — scaffold, run, deploy, observe.

Scaffold — start from a rich set of samples

Hosted Agent creation now opens with a refreshed scaffolding experience and a rich sample selection, so you start from a working, framework-appropriate template instead of a blank file. Creation is smarter, too: we auto-select your subscription when there’s only one, gate tabs more clearly, and tightened spacing for a cleaner setup flow. 

Run (F5) — inspect as you build

Press F5 and your agent runs locally with the Agent Inspector, now aligned with the rest of the extension and featuring Copilot SDK visualization so you can see what the Inspector visualizes as the agent executes. It’s the fastest loop from change to verification before anything leaves your machine. 

Deploy — a new UX and new ways to ship

Different teams ship differently, so deployment got a refreshed UX and two new options for Hosted Agents: 

• ZIP Code Deploy: Package your agent source as a ZIP and deploy it directly to Microsoft Foundry Agent Service. 

• Bring-Your-Own-Image (BYOI): Already have a pre-built container in your own Azure Container Registry? Deploy straight from it. 

Observe — know it works in production

Once deployed, the full observability story is now available: 

• Hosted Agent Tracing: Inspect end-to-end traces of Hosted Agent invocations directly from VS Code — tool calls, delegation chains, and timing for real debugging instead of guesswork. 

• Continuous Evaluation Settings: A new page to configure ongoing evaluation for deployed Hosted Agents, so quality is measured continuously — not just at ship time. 

• Evaluations Node: One-click access to evaluation runs and results right from the Foundry project tree. 

A Smarter, More Connected Toolbox 

What it is, and why it matters 

A Toolbox is how your agent gets its capabilities — the curated set of tools, knowledge sources, and integrations it can call at runtime. Instead of hand-wiring each connection, you assemble a Toolbox once and your agent consumes it consistently across local runs and production. The result: agents that can act on real enterprise data and systems, with the connections managed in one place. 

From what to how: create, connect, consume 

• Create: Start a new Toolbox from the Foundry Toolkit sidebar “Tools Catalog” and pick the capabilities your agent needs. 

• Connect: Configure and wire in enterprise systems through native, first-class connections once, and use it for all your agents.

• Consume: Reference the Toolbox from your Hosted Agent so its tools are available the moment the agent runs, locally (F5) and once deployed. 

New this release 

Building on that flow, the Toolbox is now richer and more enterprise-ready: 

• WorkIQ as a Built-in Tool: A first-class WorkIQ experience powered by A2A connections — no MCP fallback required. End-to-end toolbox creation with WorkIQ works out of the box. 

• Fabric IQ (OneLake Catalog) Integration: Connect your agents to Microsoft Fabric OneLake catalogs directly from the Toolbox. 

• Toolbox Guardrails: Apply content-safety guardrails to your Toolbox for safer agent execution. 

• Faster discovery: A new Toolbox Search Toggle and Agent Tool Multi-Select let you find and wire in multiple tools in a single action. 

LangGraph Reaches Parity 

LangGraph developers, this one is for you. We’ve added five new Hosted Agent samples that bring LangGraph to full parity with the Agent Framework Responses learning path — so you get an equivalent, end-to-end walkthrough no matter which framework you prefer: 

• MCP — tool loading from a remote MCP server (defaults to GitHub Copilot MCP) via MultiServerMCPClient. 

• Workflows — a custom StateGraph chaining three specialized LLM nodes: slogan writer, legal reviewer, and formatter. 

• Files — local filesystem tools plus the Foundry-Toolbox code_interpreter working over session-uploaded files. 

• Human-in-the-Loop — a StateGraph that drafts a proposal and pauses for approval via langgraph.types.interrupt. 

• Observability — GenAI OpenTelemetry tracing with enable_auto_tracing(); spans, metrics, and logs flow to Application Insights. 

We’ve also refreshed the existing bring-your-own LangGraph samples against the new hosting layer (chat with local tools, Foundry-managed Toolbox loading, and SSE-streamed multi-turn sessions backed by a MemorySaver checkpointer), so every sample reflects how Hosted Agents work today. 

Polish Across the Board 

A release is more than headline features. This one also includes a redesigned Prompt Builder “Improve an Instruction” dialog for faster iteration, fixes for MCP toolbox tool icons, clearer ZIP-deploy error surfacing, and assorted Agent Builder and Playground regression fixes — the whole experience feels tighter end to end. 

Get Started Today 

• Install: Foundry Toolkit on the VS Code Marketplace 

• Quick Start: Follow our getting-started tutorial to build your first Hosted Agent 

• Deep Dive: Explore the documentation, samples, and LangGraph parity walkthroughs 

Join the Community 

Share your projects, file issues, or suggest features on our GitHub repository. We can’t wait to see what you build. 

Welcome to the next chapter of AI development!