Running Claude Inside VS Code: The Agent Host and the Copilot Integration, Explained

Visual Studio Code now runs Anthropic's Claude as a first-party coding agent, reusing the Claude Agent SDK and running it in a dedicated Agent Host process, allowing a single GitHub Copilot subscription to drive Claude, Codex, or Copilot's own harness. The integration relies on the open Agent Host Protocol to keep sessions in sync across local, SSH, browser, or cloud environments, with settings to enable the picker, slash commands, and permission modes.

Member-only story Running Claude Inside VS Code: The Agent Host and the Copilot Integration, Explained How VS Code reuses the Claude Agent SDK, runs it in a dedicated Agent Host process, and lets one GitHub Copilot subscription drive any harness. This article explains how Visual Studio Code runs Claude as a first-party coding agent, and what actually happens under the hood when you choose it. You will see how the integration reuses Anthropic’s Claude Agent SDK, why the same subscription that pays for Copilot can also drive Claude, Codex, or Copilot’s own harness, and how a dedicated process called the Agent Host, together with the open Agent Host Protocol, lets a single session run locally, over SSH, in a browser, or fully in the cloud. By the end, you will understand the picker, the slash commands and permission modes, the protocol that keeps every client in sync, and the exact settings you flip to turn it all on. Reference here https://mediusdl.event.microsoft.com/video-7535303/d3ef252001/LIVE168 v1.mp4?sv=2018-03-28&sr=c&sig=%2FdhByR34nBSAbWxqloVbD%2BAvcHmc1RQarsbF99FA088%3D&se=2031-06-04T14%3A14%3A03Z&sp=r . Harness, agent, and model: fixing the vocabulary Three words get used interchangeably in this space, and the whole integration rests on keeping them apart.