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VS Code December 2025 Update Puts AI 'Agent Skills' Front and Center
Visual Studio Code's December 2025 release (version 1.108) is one of the most AI-focused editor updates yet -- boosting how developers interact with built-in chat and AI agents, including a key experimental feature that lets Copilot be taught new skills.
[Click on image for larger view.] VS Code 1.108 (source: Microsoft).
At the core of the December 2025 update is support for Agent Skills, a capability that allows you to "teach the coding agent new capabilities and provide domain-specific knowledge."
VS Code "automatically detects skills from the .github/skills/ folder in your workspace (or .claude/skills/ for backwards compatibility)" and loads them into chat context only when they are relevant to a user request.
For a detailed hands-on look at how these new Agent Skills work in practice with GitHub Copilot, see the Visual Studio Magazine article, "Hands On with New Experimental GitHub Copilot 'Agent Skills' in VS Code."
Beyond skills themselves, v1.108 enhances how you manage and interact with AI sessions:
- Keyboard access support for actions such as archiving, marking read state, and opening a session
- Grouping of sessions based on state and age when shown side by side
- Information on changed files and associated pull requests for a session
- Support for archiving multiple sessions at once from group sections
- General accessibility improvements
Chat Enhancements
The AI-driven chat system now leans more heavily on agent sessions as its foundation.
- The chat picker now reflects the same underlying session data as the Agent Sessions view, making previous conversations easier to find and manage
- Chat titles are shown more consistently regardless of Activity Bar configuration
- On restart, the Chat panel opens empty by default instead of restoring previous sessions, configurable via the
chat.restoreLastPanelSession setting
Terminal Tool Improvements
VS Code expands controls around terminal tools, including how AI-driven actions are approved and recorded.
- Default terminal tool auto-approve rules now include safe Git and search commands such as
git ls-files and rg, along with workspace npm scripts
- A new setting prevents terminal tool commands from being added to shell history
- Informational messages are shown when auto-approval rules are denied, improving transparency
Accessibility Updates
The release includes several accessibility-focused improvements across chat and window management.
- Chat responses now stream live in Accessible View as they are generated
- MCP server output is excluded from Accessible View by default to reduce noise
- A new
${activeEditorLanguageId} variable can be used in the window title
Editor Experience and Code Editing
Everyday editing workflows receive a set of targeted usability enhancements.
- Settings profiles stored as
.code-profile files can now be imported via drag and drop
- The breadcrumbs path can be copied to the clipboard with a configurable separator
- Go to Symbol in Workspace now correctly handles queries containing the
# character
- New snippet transformations support
snakecase and kebabcase
Source Control Enhancements
Git-related workflows see incremental improvements.
- New git blame settings allow ignoring whitespace changes and disabling hover decorations
- Commit message authoring in the editor has been refined
- An experimental Worktrees node appears in the Source Control Repositories view
Terminal and Performance Updates
Terminal usability and performance continue to be refined.
- Terminal IntelliSense now requires explicit invocation with Ctrl+Space by default
- Performance and stability fixes address paste handling, layout behavior, and font-related crashes
- Support for nearly 800 built-in custom glyphs expands terminal rendering capabilities
Debugging and Testing
Debugging and testing tools receive small but practical updates.
- The Breakpoints view can be displayed as a tree organized by file
- Test coverage tooling now allows navigation between uncovered regions
Extension and API Updates
The extension ecosystem sees continued investment.
- The GitHub Pull Requests extension adds support for changing the base branch, converting pull requests to draft, and generating descriptions for existing pull requests
- Quick Pick APIs gain new properties, including
prompt and resourceUri
Engineering and Quality Work
The VS Code team also highlighted ongoing maintenance and cleanup.
- Thousands of open GitHub issues were closed or triaged as part of the December housekeeping effort
- An experimental capability allows extensions to be authored directly in TypeScript without a build step
About the Author
David Ramel is an editor and writer at Converge 360.