Visual Studio Code 1.130 landed on July 22, 2026, and it’s a release that’s quietly transformative for anyone living in the Agents window. While last week’s 1.129 release introduced the agent host itself, 1.130 is where it starts paying dividends — fewer approval interruptions, faster change reviews, and better visibility into what your agents are actually doing.

Let’s break down what shipped.

The Agent Host Matures

The agent host — a dedicated process for running agent sessions (Copilot, Claude, Codex) based on the Agent Host Protocol (AHP) — was introduced in 1.129 as a preview. In 1.130, it’s the foundation that several of this release’s headline features build on.

If you haven’t enabled it yet, turn on chat.agentHost.enabled and select an agent host harness from the dropdown. The agent host runs your agent sessions in their own process, which means the same session can be connected to and rendered from multiple VS Code windows simultaneously. The Copilot agent is powered by the Copilot SDK, so its behavior aligns with the Copilot CLI, the standalone GitHub Copilot app, and other Copilot products.

This matters because it decouples agent sessions from any single editor window. You can have an agent working in one window while you monitor its progress from another — or spin up parallel worktrees for different features without losing your place.

Assisted Tool Approvals: Fewer Interruptions

This is the feature that will make the biggest day-to-day difference for anyone running long agent tasks.

Setting: chat.assistedPermissions.enabled

Until now, every tool call during an agent session required explicit approval. If you’ve ever kicked off a multi-step refactoring task and walked away, only to come back and find the agent stalled on its third approval prompt, you know the pain.

With assisted permissions, the language model evaluates the risk of each tool call and decides whether it can run automatically or needs your sign-off. You enable the setting, and then pick “Assisted permissions” from the permissions picker for agents running on the agent host.

This isn’t autopilot — the model is making contextual risk assessments, not blindly approving everything. But it dramatically reduces the number of times you need to stop what you’re doing to click “Approve.”

Agents Window Improvements (Preview)

The Agents window gets several upgrades that make reviewing agent-generated changes faster and less cluttered:

File-Level Diff Statistics

Each file header in the Changes editor now shows live insertion and deletion counts next to the file path. When an agent touches a dozen files, you can quickly scan which ones had major changes and which were minor tweaks — without opening each diff.

Compact Multi-File Diff View

The multi-file diff gutter has been tightened up. Empty space before the code has been removed, and file headers, line numbers, and unchanged-region controls now share a consistent alignment. The practical result: more room for actually reviewing changes, especially in a narrow editor pane.

Compact Quick Chats

Quick chats — which run on the agent host and don’t require opening a workspace — now use compact single-line rows in the sessions list. Regular sessions keep their second line with change statistics, status, and timestamps. This makes quick chats easier to distinguish at a glance and frees up vertical space for your project sessions.

Worktree Support for All Agent Harnesses

Previously, Git worktree isolation was only available for the Copilot harness. In 1.130, Claude and Codex sessions running on the agent host also support worktree isolation. This means you can spin up parallel sessions for different features in the same workspace regardless of which agent harness you’re using — a significant win for teams that mix and match agents.

Chat Visibility

Chat Timestamps

Setting: chat.verbose

Chat requests and responses now display timestamps. Hover over the message toolbar to see the timestamp and elapsed time for each interaction. This is one of those small features that you didn’t know you needed — being able to see how long an agent spent on a response helps you understand where time is going in complex tasks.

Aggregate AI Credit Usage for Copilot Business and Enterprise

Copilot Business and Enterprise users can now see their aggregate AI credit usage for the current billing cycle directly in the Copilot status menu. Previously, credit usage was only surfaced when a user-level budget was configured, which left many organization-managed users with no visibility into their consumption.

Now, even without a user-level budget, the status menu displays the total credits used so far in the billing cycle. If your organization manages your Copilot access and you’ve been flying blind on usage, this fixes that.

If you use Git’s diff.mnemonicPrefix option, VS Code now recognizes the prefixes it produces and makes file links in terminal diff output clickable. The editor recognizes:

  • i/ — index
  • w/ — working tree
  • 1/ and 2/ — from git diff --no-index

The prefix is stripped from the link target, so clicking opens the correct file instead of looking for a literally-named i/src/main.ts.

This is a niche feature, but if you’ve enabled mnemonic prefixes for readability in your terminal diffs, you’ll appreciate not having to manually open files that the terminal is referencing.

Engineering: TypeScript 7

The VS Code repository is now compiled using the release version of TypeScript 7, and the TypeScript 7 extension has also switched to the release version. This is an infrastructure change that won’t be directly visible to most users, but it’s a meaningful signal: TypeScript 7 is production-ready, and VS Code is eating its own dog food.

You can read the TypeScript 7.0 release announcement for details on what’s new in the language itself.

Community Contributions

This release includes contributions from 13 community members — a testament to VS Code’s open-source ecosystem. Notable contributions include:

  • Arthur Cnops (@accnops): Multiple voice improvements including auto-narration opt-out, narration request sequencing, and NACK revalidation for dropped narration
  • Ahmad Awais (@ahmadawais): Detecting Command Code as an agent CLI for terminal tab titles
  • Antonio Lujano Luna (@AntonioLujanoLuna): Fixing BYOK Anthropic endpoints sending PDFs as image blocks
  • Shahrier Islam Arham (@arham766): Bumping windows-process-tree to 0.8.0 for UTF-8 command lines in Process Explorer
  • Clint Harrison (@clintharrison): Support for mnemonic prefixes in git diff parsing for terminal links
  • Lucas Ma (@pony-maggie): Simple dialog folder update fixes and nested folder creation
  • Ralph Feltis (@rfeltis): Fixing quota trajectory billing period calculation

Issue tracking contributions from John Murray, RedCMD, Andrii Dieiev, and Alberto Santini also helped triage and verify community reports.

Should You Update?

If you’re using the Agents window regularly, yes — immediately. Assisted tool approvals alone will save you significant time on multi-step tasks. The compact diff improvements and file-level statistics make reviewing agent changes noticeably faster.

If you’re not using agents yet, this release continues the trajectory of VS Code becoming a serious agent orchestration environment. The agent host architecture, combined with worktree isolation for all harnesses, means you can run parallel agent sessions against the same repo without them stepping on each other.

Enable chat.agentHost.enabled, try the assisted permissions, and see how much faster your agent workflows feel.

VS Code 1.130 was released on July 22, 2026. Download it via Check for Updates in VS Code, or get the nightly Insiders build for early access to upcoming features. Follow the conversation on X.