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Visual Studio Code 1.142, released on 14 October 2026, adds shared AI Canvases, lets you move an active Copilot chat between folders or Git worktrees, and substantially improves Markdown authoring. The release also changes how policy-managed sessions run and expands controls in the model picker.
What is new in VS Code 1.142
Version 1.142 is a feature release centered on collaborative agent work. Instead of keeping every interaction inside a chat transcript, Canvases provide an interactive surface beside chat where you and an agent can inspect and update the same artifact. The release also preserves conversation history when work moves to another workspace and makes Markdown editing more like a structured source editor.
| Area | Before this release | VS Code 1.142 |
|---|---|---|
| Agent collaboration | Chat transcript as the primary surface | Shared Canvas artifact beside chat |
| Workspace changes | Starting a new chat could lose conversational context | Existing chat can move to another folder or Git worktree with its transcript |
| Markdown authoring | Plain source editing with fewer navigation and insertion controls | One visual line per source line, image paste, file-link renaming, Outline and breadcrumbs, and hover-to-copy code buttons |
| Governance | Local permission and sandbox behavior | Policy-managed sessions can run on Copilot Agent Host with enforced settings |
How shared AI Canvases work
Microsoft describes Canvases as “interactive interfaces to collaborate with an agent.” A Canvas sits beside chat and represents a live artifact that both the developer and agent can inspect or change. A Kanban Canvas, for example, supports creating and moving cards while an agent decomposes work into tasks and updates progress.
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- Inspect an artifact without relying on a long transcript to understand its current state.
- Ask the agent to update the same artifact while you continue editing or rearranging it.
- Use a Kanban-style board to create cards, move them between states and track agent-generated tasks.
- Work from either the normal VS Code editor window or the Agents window.
Canvases are supplied by Canvas extensions. You can type /create-canvas to generate one, or install a chat plugin that includes a Canvas extension. Community sample extensions are also available, so the exact Canvas types depend on the extension you use.
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How to enable Canvases
Canvases are a preview feature and require the Copilot harness for local desktop sessions. The Copilot harness is being progressively rolled out as the default harness for new VS Code sessions.
- Open VS Code Settings and search for
chat.canvases.enabled. - Enable the
chat.canvases.enabledsetting. - Start a new session using the Copilot harness. Existing sessions do not automatically become Canvas sessions.
- In chat, enter
/create-canvas, or install and invoke a chat plugin that provides a Canvas extension.
If the command is unavailable, check that the setting is enabled, the Copilot harness is selected and the extension or plugin providing the Canvas is installed. Because the feature is in preview, availability can vary during the progressive rollout.
Move a Copilot chat to another folder or worktree
Version 1.142 lets you change the workspace for an existing chat without discarding its conversation. The Agents window performs the move, allowing the agent to continue in the destination folder or new Git worktree.
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- Open the chat in the Agents window.
- Choose the command to move the chat and select the target folder or Git worktree.
- Let the agent finish its current turn. VS Code then moves the chat and continues automatically in the destination workspace.
- Review subsequent edits and commands in the new location. The original checkout remains unchanged.
The transcript is preserved, so the agent retains the prior discussion when it resumes. The move changes where later edits and commands run; it does not copy uncommitted work from the original checkout into the destination.
Markdown editing improvements
The Markdown editor now exposes source more clearly and adds controls that reduce repetitive file-management work.
Source-line display
Each Markdown source line appears on its own visual line, making line-oriented editing and review closer to the underlying file.
Paste images directly
You can paste screenshots and other images directly into a Markdown document. This is useful when documenting a bug, recording a design decision or adding a visual example without manually creating an image reference first.
Rename file links safely
Rename Symbol now works with Markdown file links. Renaming a linked file can update references throughout the document instead of leaving stale paths behind.
Navigate headings with Outline and breadcrumbs
The Outline view and breadcrumbs expose the document’s heading structure, making it easier to jump through long README files, specifications and guides.
Copy code blocks on hover
Code blocks now show a copy button when you hover over them, so readers can copy commands or examples without selecting the block manually.
These changes affect Markdown editing and navigation. Read-only Markdown rendering is unchanged in this release.
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Policy-managed chats and sandbox changes
Enterprise administrators get stricter enforcement for chats with managed permissions or sandbox settings. A chat with a nonempty permissions object or with sandbox.enabled: true uses Copilot Agent Host for full policy-managed operation.
Existing chats are migrated with their transcript and unsent draft preserved. Nothing is sent automatically during migration. Administrators can restrict permitted permission modes so agent behavior matches organizational policy.
Windows terminal sandboxing for Local-harness terminal commands is deprecated in 1.142. Teams relying on that Local-harness behavior should review their policy configuration and plan a transition to the managed hosting path where required.
Model picker changes
The model picker now separates Copilot providers from bring-your-own-key (BYOK) providers. Hovering over a model exposes its thinking-level and context-window controls, making it easier to see which reasoning setting and context capacity will apply before starting a task.
What the update means for different users
Individual developers
Canvases offer a visual alternative to a chat-only workflow, while chat movement prevents a workspace change from forcing you to restate requirements. Markdown improvements are immediately useful for README and documentation work.
Teams using Git worktrees
Moving a chat into a new worktree keeps the original checkout untouched and carries the transcript into the destination, which suits parallel feature branches and isolated agent tasks.
Enterprise administrators
Review permission and sandbox policies before rollout. Managed chats may move to Copilot Agent Host, and Local-harness Windows terminal sandboxing is deprecated.
Availability and limitations
VS Code 1.142 is dated 14 October 2026 in Microsoft’s release archive. Canvases are preview functionality, require a Copilot-harness local desktop session and depend on Canvas-providing extensions. The release documentation reports features and prerequisites but does not publish an independent performance benchmark, so speed or quality improvements should not be inferred from this update alone.
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