Muhammad Hamid Raza

Posted on Apr 23

VS Code 1.117 Is Here — And It's Making AI Coding Feel Way Smoother 🚀

#productivity #vscode #typescript #webdev

You know that feeling when your code editor gets an update and you're half-excited, half-scared everything's going to break? VS Code 1.117 is one of those updates where the excitement wins.

Released on April 22, 2026, this version ships with features that directly improve how you work with Copilot, the terminal, and AI-assisted coding in general. If you've been using VS Code as your daily driver — and honestly, who isn't — this update is worth your attention.

So what changed, and why should you care? Let's dig in. 👀

What Is VS Code 1.117?

Visual Studio Code 1.117 is the latest monthly release from Microsoft, and this one leans hard into making the AI-powered developer experience faster, more flexible, and less annoying.

The headline features? Bring Your Own Key (BYOK) for Copilot Business and Enterprise users, smoother chat response rendering, better terminal awareness for agent CLIs, and a bunch of polish to the VS Code Agents experience.

In short: VS Code is getting smarter about how it works with AI tools — and it's making sure you stay in control while it does.

Why This Release Matters

AI-assisted coding has gone from "cool demo" to "daily workflow" for a huge number of developers. That shift means the tools supporting it need to grow up fast.

VS Code 1.117 addresses three real pain points:

Model flexibility — Teams often need specific models for compliance or cost reasons, but switching tools to use them was a hassle. Not anymore.
Response fluidity — Chunky, stuttery chat responses break your focus. Incremental rendering fixes that.
Terminal clarity — When Claude Code, Copilot CLI, and Gemini CLI all show up as "node" in your terminal tabs, things get confusing fast. That's now fixed too.

These aren't flashy features. They're the kind of polish that makes your daily work feel less friction-y — and that matters a lot.

Key Features and What They Mean for You

🔑 Bring Your Own Key (BYOK) — Finally

If your team is on Copilot Business or Enterprise, you can now connect your own API keys for providers like OpenRouter, Ollama, Google, OpenAI, and more — right inside VS Code chat.

This is huge for teams that have compliance requirements, cost constraints, or just prefer a specific model for certain tasks. No more bouncing between tools or browser tabs to use the model you actually want.

Real-life example: Your team uses a fine-tuned model through OpenRouter for internal documentation generation. Previously, someone had to copy-paste between VS Code and a separate chat interface. Now it's all in one place.

Admins still have control — BYOK is enabled by default, but org admins can restrict it via the Copilot policy settings on GitHub.com.

⚡ Incremental Chat Rendering — Smoother Streaming

If you've ever watched a long Copilot response load line-by-line in a way that felt jerky, this one's for you.

Incremental rendering streams chat responses block-by-block, with optional animations as the tokens arrive. It makes the experience feel more natural and fluid — less like watching a typewriter, more like reading in real time.

You get a few settings to customize it:

chat.experimental.incrementalRendering.enabled — Turn it on or off (default: on)
chat.experimental.incrementalRendering.animationStyle — Choose from fade, rise, blur, scale, slide, reveal, or none
chat.experimental.incrementalRendering.buffering — Control how much content is buffered before rendering (off, word, or paragraph)

It's experimental, but it's on by default. Try the fade style first — it feels the most natural.

🗂️ Sort Agent Sessions by Recent Activity

Been running multiple Copilot agent sessions and lost track of which one you were working in? The Agent Sessions view now lets you sort sessions by when they were created or last updated.

It sounds simple. It's incredibly useful when you're juggling multiple tasks across a long workday.

🖥️ Terminal Title for Agent CLIs

This one made a quiet but real difference. Before 1.117, running Claude Code, Copilot CLI, or Gemini CLI in your terminal would just show "node" as the title. Every. Single. Time.

Now VS Code detects these agent CLIs as a distinct shell type and uses the actual CLI name as the terminal title. So instead of three anonymous "node" tabs, you see Claude Code, Copilot CLI, Gemini CLI — exactly what they are.

This is enabled by default. You can toggle it with terminal.integrated.tabs.allowAgentCliTitle if needed.

📡 System Notifications for Background Terminal Commands

When an agent runs a long terminal command in the background, VS Code now surfaces it as a system notification in the chat response. You don't have to keep switching to the terminal to check whether something finished or failed.

It's a small thing that saves a surprising amount of interruption.

🧩 VS Code Agents App (Insiders Preview)

If you're running VS Code Insiders, the VS Code Agents companion app got a few nice updates:

Sub-sessions — Fork a new session from the current one for parallel tasks like research or code review without losing your place
Inline change rendering — Cleaner diff visualization when the agent edits your code
Smoother update flow — Less friction keeping the app current

This is still in preview, but it's moving fast.

🔷 TypeScript 6.0.3

A quick but important note: this release bundles TypeScript 6.0.3, which is a recovery release fixing a few import bugs and regressions from the 6.0 series. If you had any weird import behavior creeping in, this should clean it up.

Comparison: Chat Rendering Before vs After 1.117

Experience	Before 1.117	After 1.117
Chat response feel	Timer-based, chunky	Block-by-block, fluid
Animation support	None	fade, rise, blur, slide, and more
Long response wait	Noticeable lag feel	Reduced perceived wait
Customization	None	3 configurable settings

Best Tips for Getting the Most Out of 1.117

✅ Do:

Try incremental rendering with fade animation — it's the most polished out of the box
Set up BYOK immediately if your team uses a preferred model through OpenRouter or Ollama
Sort your agent sessions by "updated" so your most active work is always at the top
Switch to VS Code Insiders if you want to try the Agents app — sub-sessions are genuinely useful

❌ Don't:

Don't set buffering to paragraph if you want faster rendering — off renders content as soon as each block is ready
Don't forget that BYOK has an admin toggle — if you're on a managed org and it's not showing up, check with your org admin
Don't ignore the TypeScript 6.0.3 update — those import bug fixes matter if you're on a TypeScript-heavy project

Common Mistakes to Avoid

Leaving incremental rendering on default and never customizing it
The default off buffering is fast, but if responses feel incomplete mid-stream, try word or paragraph buffering. A small tweak makes a big difference.

Ignoring BYOK because it sounds like an enterprise-only feature
If you're an individual dev on Copilot Business, BYOK applies to you too. Adding your OpenRouter or Ollama key means more model flexibility without leaving VS Code.

Running too many unnamed agent CLI tabs
Before 1.117, you'd just get a pile of "node" tabs and guess which was which. Now the titles are clear — but old habits die hard. Make it a habit to actually read the tab names now that they mean something.

Skipping the VS Code Agents app just because it's in preview
Yes, it's Insiders-only and still evolving — but sub-sessions alone are worth trying. Being able to spin off a parallel research branch without losing your main session context is a real workflow upgrade.

Wrapping Up

VS Code 1.117 is one of those releases that doesn't reinvent the wheel — it just makes the wheel spin better. BYOK gives teams real model flexibility, incremental rendering makes AI chat feel smoother, terminal title detection removes a daily annoyance, and the VS Code Agents app keeps getting more capable.

None of these features are dramatic on their own. But together, they chip away at the small frictions that add up over a full workday of AI-assisted coding.

Update VS Code now (Help > Check for Updates) and take five minutes to configure incremental rendering. You'll notice the difference right away.

For more practical dev content, tutorials, and tool breakdowns, check out hamidrazadev.com — there's a lot more where this came from. 😊

If this post helped you, share it with a fellow developer who lives in VS Code. It takes two seconds and might save them a lot of clicking around.

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