Set up your development environment for Microsoft 365 Copilot

You can build agents to extend, enrich, and customize Microsoft 365 Copilot for the unique way your customers work. This article describes how to set up your development environment to extend Microsoft 365 Copilot.

Microsoft 365 Copilot Chat is a broadly accessible AI chat interface that is available to all Microsoft 365 users. Copilot Chat users have access to agents that extend its capabilities and can be grounded on instructions or the web. Users in tenants that have Copilot Studio metering enabled and users with Microsoft 365 Copilot licenses have access to agents with enhanced capabilities, such as grounding with SharePoint data and Microsoft 365 Copilot connectors.

For Microsoft 365 Copilot license information, see License options.

Copilot development environment

You have the following options for a Copilot development environment:

• A Microsoft 365 Developer Program sandbox subscription (without a Microsoft 365 Copilot license). Microsoft 365 Developer Program members who qualify for a developer subscription can use their subscription to develop agents with limited capabilities.

  At this time, because the subscription doesn't support commerce, you can't ground your agent on organizational data or add other capabilities.

• An eligible Microsoft 365 or Office 365 production environment with a Microsoft 365 Copilot license.

  Note

  When you build agents in production environments, you might encounter admin-imposed limitations. For example, administrators can block sideloading of custom apps or might not grant the necessary permissions required to build Copilot connectors.

• A Microsoft 365 subscription without a Copilot license, such as Microsoft 365 Business Basic, if you want to build and test agents for Microsoft 365 Copilot Chat, with limited capabilities.

You can also purchase a Microsoft 365 Copilot license and set up a development environment independent of your production environment, where you can be your own administrator.

Organizations with Microsoft 365 Copilot licenses

You can develop Copilot extensibility solutions by working directly in a Microsoft 365 production environment with a Microsoft 365 Copilot license.

Contact your Microsoft representative to add Copilot to your Microsoft plan. Enterprise customers need to be on the Current Channel or Monthly Enterprise Channel for Microsoft 365 apps to have access to Copilot.

Organizations without Microsoft 365 Copilot licenses

You can develop Copilot extensibility solutions for users in organizations without Copilot licenses, with some limitations to your agent capabilities. If you want to take advantage of agent capabilities such as grounding on organizational data, you can enable Copilot Studio metering.

Requirements for Copilot extensibility options

You can extend Microsoft 365 Copilot with the intelligence of external services and data in several ways:

• By building agents to customize Copilot.
• By adding skills with Teams message extension plugins and Copilot Studio actions.
• By extending the knowledge in Copilot with Copilot connectors.

To learn more and choose the best extensibility path for your users, see Copilot extensibility planning guide and Agents overview.

Requirements for agents

To build agents, you need to complete prerequisites depending on the tool that you choose to use.

Microsoft 365 Agents Toolkit requirements

You can use Microsoft 365 Agents Toolkit to build agents without a Microsoft 365 Copilot license. If you want to build agents that are grounded on organizational data via SharePoint or Copilot connectors, you need to either set up billing in your tenant or purchase a Microsoft 365 Copilot license.

To build agents with Agents Toolkit and other IDEs, you must have your admin enable the ability to sideload a custom app to your tenant.

To enable sideloading, from Teams admin center, select Teams apps > Setup policies > Global (Org-wide default), and switch the Upload custom apps toggle to On.

To manage your sideloaded custom apps, including agents, from the Teams client, go to Apps > Manage your apps.

Copilot Studio requirements

Copilot Studio is available to all Microsoft 365 users. You can use Copilot Studio to create agents and actions. If you want to build agents that are grounded on organizational data via SharePoint or Copilot connectors, you need to either set up billing in your tenant or purchase a Copilot Studio license. For more information, see Manage message capacity.

The following steps are required for you to use Copilot Studio to build agents:

• Your Power Platform admin or Dynamics 365 admin must enable Generative AI features in Power Platform admin center.
• Your Microsoft 365 tenant admin must deploy the Copilot Studio app in the Microsoft 365 admin center.

Enabling developer mode

You can use developer mode in Copilot to test whether and how the orchestrator selects your plugin in response to a given prompt.

To enable developer mode, in Copilot Chat, type -developer on. To disable developer mode, type -developer off.

Developer mode is only available within Microsoft 365 Copilot (Copilot for Work) experiences. For more information, see Debugging agents.

Microsoft 365 Copilot developer licenses

Accounts used to test agents that are grounded on organizational data or that include enhanced capabilities need a Microsoft 365 Copilot Developer license. Admins can manage Microsoft 365 Copilot Developer licenses in the Microsoft 365 admin center (under Billing > Licenses). You can also use PowerShell to assign Microsoft 365 licenses to user accounts.

Agent capabilities and licensing models

Agents for Copilot are available through multiple licensing models, each offering different levels of functionality:

• Microsoft 365 with a Microsoft 365 Copilot add-on license - Users with a Microsoft 365 subscription and a Copilot add-on license have full access to Copilot agent experiences across supported apps and platforms.
• Usage-based billing (pay-as-you-go) - Tenants can enable agent access without a full license, with some limitations to agent configuration options.
• Microsoft 365 without a Copilot add-on license - Users might see Copilot Chat entry points in some apps, but access to agent experiences is limited or disabled based on tenant settings.

The following table summarizes agent access based on user licensing type.

The following table lists the agent types and agent capabilities that are available to users based on licensing and usage billing configuration in the tenant. For information about usage billing rates, see Billing rates and management.

* Usage limits apply to all included features.

* Users who are configured with usage billing in the Microsoft 365 admin center don't have access to embedded file content, SharePoint data, and Microsoft 365 Copilot connectors custom knowledge sources when they use the Copilot Studio lite experience to create agents.

Frequently asked questions

Can I use my Microsoft 365 Developer Program subscription to develop with Copilot?

You can use your Microsoft 365 Developer Program subscription to build agents with limited capabilities that are grounded on web search. Because Microsoft 365 Developer Program subscriptions don't support commerce, you can't purchase Microsoft 365 Copilot licenses or enable metering, so you can't use your subscription to build agents grounded on organizational data or add other capabilities.

I'm not an ISV and I don't have a Microsoft 365 Copilot license. Can I get a Microsoft 365 Copilot development environment?

If you have a Microsoft 365 subscription, you can build and test agents in Microsoft 365 Copilot Chat, with limited capabilities. You need to enable metering in your tenant or purchase a Microsoft 365 Copilot license if you want to build agents that are grounded in organizational data.

Security and privacy

Copilot uses existing permissions and policies to deliver the most relevant information, building on our existing commitments to data security and data privacy in the enterprise. For information about how Copilot uses and protects organizational data, see Data, Privacy, and Security for Microsoft 365 Copilot. For data privacy and security considerations for developing different Copilot extensibility solutions, see Data, Privacy, and Security considerations of extending Microsoft 365 Copilot.