News
Dedicated Python Environments Tool Rolls Out in VS Code Update
The Python team at Microsoft is continuing its overhaul of environment management in Visual Studio Code, with the August 2025 release advancing the controlled rollout of the new Python Environments extension. First previewed earlier this year, the tool is now installed for 20% of stable channel users, with wider adoption expected in coming months.
Microsoft's dev team for Python in VS code handles the Python, Pylance and Jupyter extensions, by far the most popular extension in the editor's marketplace, totalling more than 421 million installs.
The Python Environments extension is designed to simplify one of the trickier parts of Python development: managing the different setups developers use to run code. In practice, Python projects often need their own isolated environments to avoid conflicts between libraries or versions. This tool brings those environments into a single view in VS Code, making it easier to create, select, and switch between them without leaving the editor.
As the screenshot from today shows, it has been installed nearly 1.7 million times:
[Click on image for larger view.] The Python Environments Extension (source: Microsoft).
When we reported on the preview in January, it had only 486 installs:
[Click on image for larger, animated GIF view.] Environments Management in Animated Action (source: Microsoft).
Managing Python Environments
Instead of relying on the main Python extension to handle everything, the new extension takes over the job of creating and managing environments. Developers can use it to spin up a fresh environment, remove one they no longer need, or switch a project to run in a different interpreter. It works with common setups like global Python installs, venv, and Conda, and it also provides hooks so that community-built tools like Pixi, Hatch, or uv can plug in and work seamlessly inside VS Code.
"As the Python environment manager ecosystem is evolving with new environment managers, new capabilities to existing environment managers, we want to make it easier for the community to get these newer features," the team said. "This extension provides an API surface for extensions to integrate with the existing features of the Python Extension, this was asked for by the community that wanted to build newer features for their favorite environment managers."
Rollout Details
At present, only one in five stable channel users sees the extension enabled by default. Developers can opt in early by setting "python.useEnvironmentsExtension": true in settings.json. Those encountering issues can disable it by flipping the setting to false.
The new tooling provides an Environments panel in VS Code where users can:
- Create and delete virtual environments with Quick Create or custom configuration
- Install and uninstall packages using pip or conda
- Assign environments to individual projects, including multi-root workspaces
- Scaffold new Python projects from templates
Integration and Dependencies
Execution-related functionality such as debugging, linting and formatting now requires the Environments extension, while the main Python extension alone is sufficient for language features like hover and IntelliSense. The design ensures that tools like Pylance can still operate in limited scenarios, but most runtime features are moving to the dedicated extension.
Other August Updates
Alongside the environments rollout, the August 2025 release introduced several additional improvements:
- Shell integration support for Python 3.13 and above, providing richer REPL and terminal features
- Enhanced terminal suggestions with inline documentation powered by language servers
- Jupyter support for uv virtual environments, automatically handling dependencies when running notebooks,
Development of the main Python tool, with Python Environments, is carried out in the microsoft vscode-python GitHub repo.
About the Author
David Ramel is an editor and writer at Converge 360.