Agent Builder lets you make a small helper by describing it in words. You tell it what to do and what to read, and it answers people's questions that way every time.
Agent Builder is the simple, no-code way to make an agent inside Copilot. You describe what it should do, add instructions and some files or websites for it to use, test it and share it. It can't connect to other systems or take actions; for that you move up to Copilot Studio.
Agent Builder authors declarative agents in Microsoft 365 Copilot (web and Teams clients; mobile isn't supported): instructions, knowledge sources (web, SharePoint, OneDrive, Teams, Outlook, connectors, embedded files) and conversation starters, running on Copilot's orchestrator. No external actions; copy to Copilot Studio for connectors, flows or actions. Processed by Copilot Studio; no Dataverse storage consumed.
The idea
Microsoft describes Agent Builder as "an easy way to build declarative agents for Microsoft 365", suited to "quick and straightforward projects". A declarative agent is Copilot with a fixed job: a set of instructions, some chosen knowledge sources and a few suggested prompts. It runs on Copilot's own reasoning, so you're shaping how Copilot behaves rather than building a new system.
Microsoft's own examples are a writing or presentation coach that follows organisational standards, and a team onboarding agent that answers questions about a new starter's team.
How you build one
You open Agent Builder from the Copilot app on the web or in Teams (it isn't available on mobile) and choose New agent. You can describe the agent in plain language and let Agent Builder fill in the configuration, or skip straight to configuring it by hand. Then you test it on the Try it tab and share it.
Knowledge sources can include public websites, SharePoint and OneDrive content, Teams chats and meetings, Outlook email, files uploaded from your device, and Copilot connectors your admin has enabled. Each has its own limit, which I cover in Agent Builder limits worth knowing before you start.
Where it stops
Microsoft's documentation is clear: "Agent Builder doesn't support authoring actions that integrate external services." If the agent needs to update a system, run a workflow or call an API, Microsoft says to copy the agent to Copilot Studio. That's the line I use to decide which tool to start in, explained in When to move from Agent Builder to Copilot Studio.
Licensing affects what you can build. Microsoft says access to Agent Builder and the capabilities you can add depend on the licences in your tenant. For people using an agent without a Copilot licence, knowledge from shared tenant data such as SharePoint is metered in Copilot Credits, while instructions and public websites are included, as covered in Agents in Copilot Chat: included or metered.
Why it's useful for decisions
A lot of everyday decisions are about applying a rule consistently: does this expense need approval, which template applies, who should handle this request? The rule is usually written down somewhere, but people don't read it. An agent that has the rule as its knowledge and is told to answer only from it can make that rule easier to apply.
The important limit is that the agent advises and doesn't act. A person still makes the decision. For a first agent that's a sensible place to start.
A worked example
This scenario is illustrative. A regional office has a two-page policy on which purchases need a second quote. Staff often ask the office manager instead of reading it.
She builds an agent with these settings:
| Setting | Value |
|---|---|
| Name | Second quote checker |
| Instructions | "Answer only from the purchasing policy. Ask for the item and the amount if they're missing. Say which section of the policy applies. If the policy doesn't cover the case, say so and suggest contacting the office manager." |
| Knowledge | The purchasing policy, from the office SharePoint site |
| Starter prompts | "Do I need a second quote for this?" and "What counts as a single purchase?" |
She tests it with five past questions she knows the answers to, fixes one instruction, and shares it with the office. The decision still belongs to the person buying. The agent just makes the rule quicker to check.
What I'm still checking
Microsoft notes that auto-sharing SharePoint files with an agent only works when sharing with specific security groups, so file permissions might need updating by hand. I'd like to test what a user sees when the agent can't open its own knowledge file for them.
Sources
- Microsoft Learn, Agent Builder overview, accessed 11 October 2026.
- Microsoft Learn, Build agents in Agent Builder, accessed 11 October 2026.
- Microsoft Learn, Add knowledge sources to an agent in Agent Builder, accessed 11 October 2026.
- Microsoft Learn, Plan licensing and cost for Microsoft 365 Copilot extensibility, accessed 11 October 2026.