VS Code Agent Mode in 2026: Companion App and MCP

VS Code has been on a fast-moving trajectory toward what Microsoft calls "agent-native development." The April 2026 releases — versions 1.115 and 1.116 — represented the most significant step yet: a standalone Companion App for parallel agent sessions, deeper terminal control, Model Context Protocol (MCP) server bridging to external agents, and Copilot CLI remote steering from any device. If you have not revisited your VS Code setup since late 2025, a lot has changed. This guide covers what ship