Building MCP servers with VS Code — Level up your MCP

Microsoft Developer demonstrates how to build modern Model Context Protocol (MCP) servers in VS Code, moving beyond simple local tool calls to more production-ready agent integrations with notifications, elicitation, stateless HTTP, and plugin-based distribution.

Overview

The video walks through how MCP servers have evolved from basic local tool calls into richer, more production-oriented agent capabilities. Using a live VS Code demo, the presenter builds an agentic “achievement tracker” to show how to design, debug, and distribute MCP integrations.

Key capabilities covered include:

• Tool usage from an agent via an MCP server
• Elicitation flows (interactive prompts to gather missing information)
• Progress notifications (reporting ongoing work back to the client)
• An interactive MCP App experience
• Stateless HTTP support for MCP servers
• Agent Plugins for packaging/distribution

Reference

• VS Code docs: MCP servers (agent customization): https://code.visualstudio.com/docs/agent-customization/mcp-servers