Part 6 — Getting Started with VS Code and Microsoft Foundry (Beginner-Friendly Guid -1)

In the previous parts of this series, we built and tested AI agents and workflows entirely inside the Microsoft Foundry Portal, using a no-code/low-code approach.

Now, in Part 6, we begin the transition to a code-first experience.

This part focuses purely on environment setup:

• Installing the required tools
• Signing in correctly
• Connecting Visual Studio Code to Microsoft Foundry

No coding yet.

We are preparing a clean and correct development environment so everything works smoothly in the next part.

Purpose of This Guide

This guide explains how to set up Visual Studio Code (VS Code) to work with:

• AI Toolkit for Visual Studio Code
• Microsoft Foundry

After completing this setup, your local environment will be ready to:

• Connect to Foundry projects
• Interact with agents and workflows from code
• Deploy and manage AI resources securely

What You Need Before Starting

• A Microsoft account with access to Azure
• Access to Microsoft Foundry
• Permission to install VS Code extensions
• Internet access

No prior Azure or AI development experience is required.

Phase 1 — Install Visual Studio Code

Why this matters

VS Code is the primary development environment we’ll use to interact with Foundry from code.

Steps

1. Download VS Code from: https://code.visualstudio.com
2. Install it using default settings
3. Launch VS Code

Recommended version: Use the latest stable release of VS Code.

Phase 2— Install Required VS Code Extensions

Why this matters

VS Code needs extensions to connect to Azure and Foundry resources.

VS code Extensions

Steps

1. Open VS Code
2. Open the Extensions panel
3. Install the following:

1. Azure Resources extension

2. AI Toolkit for Visual Studio Code (this includes Microsoft Foundry integration)

3. Microsoft Foundry

Restart VS Code if prompted.

Phase 3 — Create or Select a Microsoft Foundry Project

Why this matters

Microsoft Foundry is where your:

• Agents
• Workflows
• Models
• Tools

are created and managed. VS Code will connect directly to this project.

Note: Foundry projects can be created in the portal or in VS Code. In this guide, we create the project using the Foundry Portal.

Steps

Note — This section includes the required Phase 3 steps. If you are new to Microsoft Foundry or prefer more detailed, step-by-step visuals, the following article provides a deeper walkthrough of how to create and configure these steps:— Part 1 — A Step-by-step walkthrough of the Microsoft Foundry portal | by alpa buddhabhatti | Dec, 2025 | Medium

1. Open the Microsoft Foundry Portal
2. Enable the New Foundry Experience (toggle at the top)
3. Choose one:

Select an existing project

Or click Create New Project

4. When creating a new project:

Project name: e.g., FoundryDem

Subscription: select the correct Azure subscription

Resource group: create new or reuse

Region: choose a suitable region (e.g., East US)

5. Click Create

Wait for provisioning to complete

You should land on the Foundry welcome screen

Tip — Always confirm the subscription and region to avoid access or quota issues later.

Phase 4 — Sign in to Azure from VS Code

Why this matters

Signing in links VS Code securely to:

• your Azure account
• your Foundry projects

Steps

1. Open the Azure Resources extension in VS Code
2. Click Sign in to Azure

1. Sign in using your Microsoft account
2. Complete multi-factor authentication if required
3. Choose Sign in for this app only (recommended)

After signing in, your subscriptions will appear in VS Code.

Phase 5 — Set the Default Microsoft Foundry Project

Why this matters

VS Code must know which Foundry project to use when:

• Calling agents
• Running workflows
• Interacting with AI resources

After successfully completing Phase 4, VS Code will be connected to your Azure account.

Steps

1. In VS Code, open Azure Resources
2. Expand your Azure Subscription
3. Navigate to Microsoft Foundry
4. Locate your Foundry project (for example, project-default)
5. Right-click → Open in Microsoft Foundry Extension

End State — What You’ve Achieved

After completing these steps:

✔ Visual Studio Code is installed ✔ AI Toolkit is installed ✔ Azure authentication is complete ✔ Microsoft Foundry project is linked ✔ Your environment is ready for code-first AI development

You haven’t written any code yet — and that’s intentional.

What’s Next (Part 6 — Part 2)

In the next part, we will:

• Call a Microsoft Foundry agent from VS Code
• Send input programmatically
• Receive structured output

This is where code meets Foundry.