Release Date: June 17, 2026 | Version: 1.125.0

Microsoft shipped VS Code 1.125 yesterday, and while it’s not a headline-grabbing “agents everywhere” release, it quietly fixes real problems that enterprise teams have been dealing with. Let’s dig into what matters.

🧭 Integrated Browser: Finally Useful for Remote Work

The integrated browser has been around, but it always felt like a toy. 1.125 changes that in three meaningful ways:

Web search from the address bar. Just type a query into the browser’s address bar and it runs against your configured search engine. The setting workbench.browser.searchEngine lets you pick your default. Small quality-of-life win, but one less reason to tab out of your editor.

Browse over remote connections (Preview). This is the big one. When you’re working in an SSH, dev container, or remote server workspace, HTTP/S traffic from the integrated browser can now be proxied through the remote connection itself. Enable workbench.browser.enableRemoteProxy and you can access services that are only accessible from the remote machine — internal dashboards, local development servers, you name it — without leaving VS Code.

This is preview for a reason (expect some rough edges), but the direction is right. For developers who live on remote machines, this closes a real workflow gap.

Smarter agentic port forwarding. Previously, agents working with forwarded ports could trip over mismatched port numbers. Now if an agent requests a forwarded port (and the remote proxy isn’t enabled), VS Code rewrites the URL and tells the agent. Clean, invisible, done.

🏢 Enterprise Copilot: Native MDM Delivery

This is the headline enterprise feature in 1.125, and it’s a genuinely important one.

Administrators can now deliver managed GitHub Copilot settings through native MDM channels — Microsoft Intune, Active Directory Group Policy, and macOS MDM solutions. This builds on the enterprise-managed Copilot plugin policies introduced in 1.124, but removes a critical dependency.

The old model required users to sign in to GitHub for policy enforcement. If you’re managing 500 developer workstations and need to enforce Copilot configuration before someone logs in, that was a problem. Now MDM-delivered settings appear as policy-enforced in VS Code and cannot be overridden locally — no sign-in gate required.

For enterprise IT teams rolling out Copilot across their organization, this is the kind of infrastructure that makes a real difference. Policy enforcement that works like every other managed setting in your device management stack. Microsoft has confirmed they’ll expand the set of supported policy keys in future releases.

⚙️ Extension Updates: You Get More Control

Two settings changes here that matter more than they sound like they do:

extensions.autoUpdate has been simplified to a clean on/off toggle. Previous values (true, false, onlyEnabledExtensions, delayed) are migrated automatically. When auto-update is on, only enabled extensions get updated — disabled extensions sit tight until you re-enable them.

extensions.autoUpdateDelay lets you configure how long VS Code waits before installing updates. Default is 2 hours. This builds on the delayed auto-update feature that shipped in 1.123. If you’ve ever been mid-flow and had an extension update reload your editor, you’ll appreciate having a buffer.

Both settings can be centrally managed via enterprise policies if you’re an admin.

🤖 Language Models: Easier Provider Discovery

If you use BYOK models or third-party model providers, the Language Models editor now has an Install Model Providers button. This opens the Extensions view pre-filtered to extensions that contribute model providers — no more hunting through the marketplace with the right tag name. Install a provider and its models appear in the model picker alongside everything else.

📜 LSP 3.18 for Extension Authors

Language Server Protocol 3.18 ships with this release. Corresponding packages: vscode-languageclient@10.0.0 and vscode-languageserver@10.0.0. If you build or maintain language server extensions, the full protocol additions and breaking changes are in the vscode-languageserver-node changelog.

💰 Copilot Spend Dashboard

The Copilot status dashboard now shows what percentage of your additional spend budget you’ve consumed. Useful for teams managing Copilot costs — you can see where you stand before hitting your configured limit. Detailed usage and spend management is available via your Copilot settings on GitHub.

💭 The Big Hat Take

1.125 isn’t flashy, but it’s useful. The remote proxy browser and MDM Copilot policies address real friction points for two different audiences:

  • For developers (especially remote/SSH/container users): the integrated browser is no longer ornamental. You can search the web and access remote-only services from inside your editor.
  • For IT administrators: Copilot policy enforcement without user sign-in is a genuine blocker removed. If you’ve been holding back on a broader Copilot rollout because you couldn’t enforce configuration through your existing MDM stack, that excuse is gone now.

The extension update delay is a nice touch — small annoyance fixes add up. And the Copilot spend visibility helps teams that are watching budgets.

Bottom line: Update. The integrated browser improvements alone are worth it for remote developers, and the MDM Copilot story makes 1.125 a must-have for enterprise shops.

What’s your take on 1.125? Are MDM-delivered Copilot policies enough to move your organization toward a broader rollout? Drop a comment below or reach out — we’re running through this ourselves at Big Hat Group and would love to compare notes.