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VS Code 1.101 Released with Tool Set, Custom Chat Mode & MCP Auth

Posted by warren June 14, 2025

Visual Studio Code announced new monthly 1.101 (aka May 2025) releases few days ago.

The new release of this free open-source code editor allows you to define tool sets through either the UI or a proposed API. Tool set can group related tools together, making it easier to use them in your chat.

image from visualstudio.com

The release also greatly improved the Model Context Protocol support. It now has authentication support, meaning that MCP server can behave as either an authorization server or a resource server.

Prompts now can be defined by MCP servers to generate reusable snippets or tasks for the language model. And, there are development mode, sampling (Experimental), as well as resources support.

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Besides “Ask”, “Edit”, and “Agent” modes, you can now define your own custom chat modes (preview feature), allowing to tailor the behavior of chat and specify which tools are available in that mode.

And, when you use chat session in floating window, there are 2 new header button allowing to dock back or start new chant session in the floating window.

VS Code 1.101 also contains many UX improvements. It makes the appearance of user messages more distinct, allows to use Delete shortcut or hover and select X button to undo request and any following requests.

Also, it added ability to disable find-as-you-type behavior, and specify menu style for menu bar and context menus in Windows and Linux or for context menus on MacOS.

For Windows, it supports shell environment discovery for PowerShell, meaning that VS code inherits any environment configured in the PowerShell profiles.

While for Linux, it uses native window context menu when right-click on app icon in custom toolbar.

The release also introduced some preview features, including settings search suggestions, seyboard suggestions in Search view, and semantic search behavior options, allowing to get search results based on the meaning of your query rather than just matching text.

And for code editing, it improved Next Edit Suggestions (NES) accuracy and reliability and expanded support for Python files as well.

Other changes include:

  • Chat agent is aware of any task errors of warnings identified by problem matchers, and it’s aware of current working directory when a terminal opened and shell integration is active.
  • Ability to enable / disable all built-in tools in agent or custom mode.
  • New follow mode for agent cell execution.
  • Added instancePolicy property to task runOptions, determines what happens when a task has reached its instanceLimit.
  • Added item details in source control history.
  • Fix with Github Copilot action to address configuration errors quickly and efficiently.
  • Support process explorer in web.
  • Language server based terminal suggest.
  • Added pyenv and poetry in the Python Environments extension.
  • Improve remote development with SSH pre-connection script and Remote Explorer improvements.
  • New chat tools in Python Extension.

Get VS Code 1.101

For more about the release and download links for Windows, MacOS, and Linux, go to its website via the link below:

VS Code 1.101

For Ubuntu, it provides official deb and snap packages, while there’s community maintained flatpak available for choice. See this guide for how to install them.

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