microsoft-agent-framework-azure-ai-py

name	microsoft-agent-framework-azure-ai-py
description	Build Azure AI Foundry agents using the Microsoft Agent Framework Python SDK (agent-framework-azure-ai). Use when creating persistent agents with AzureAIAgentsProvider, using hosted tools (code interpreter, file search, web search), integrating MCP servers, managing conversation threads, or implementing streaming responses. Covers function tools, structured outputs, and multi-tool agents.
license	MIT
metadata	{"author":"Microsoft","version":"1.0.0","package":"agent-framework-azure-ai"}

Agent Framework Azure Hosted Agents

Build persistent agents on Azure AI Foundry using the Microsoft Agent Framework Python SDK.

Architecture

User Query → AzureAIAgentsProvider → Azure AI Agent Service (Persistent)
                    ↓
              Agent.run() / Agent.run_stream()
                    ↓
              Tools: Functions | Hosted (Code/Search/Web) | MCP
                    ↓
              AgentThread (conversation persistence)

Installation

# Full framework (recommended)
pip install agent-framework --pre

# Or Azure-specific package only
pip install agent-framework-azure-ai --pre

Environment Variables

export AZURE_AI_PROJECT_ENDPOINT="https://<project>.services.ai.azure.com/api/projects/<project-id>"  # Required for all auth methods
export AZURE_AI_MODEL_DEPLOYMENT_NAME="gpt-4o-mini"  # Required for all auth methods
export BING_CONNECTION_ID="your-bing-connection-id"  # For web search
export AZURE_TOKEN_CREDENTIALS=prod # Required only if DefaultAzureCredential is used in production

Authentication & Lifecycle

🔑 Two rules apply to every code sample below:

1. Prefer DefaultAzureCredential. It works locally (Azure CLI / VS Code / Developer CLI) and in Azure (managed identity, workload identity) with no code change. Avoid connection strings, account/API keys — they bypass Entra audit and rotation.
   • Local dev: DefaultAzureCredential works as-is.
   • Production: set AZURE_TOKEN_CREDENTIALS=prod (or AZURE_TOKEN_CREDENTIALS=<specific_credential>) to constrain the credential chain to production-safe credentials.
2. Wrap every client in a context manager so HTTP transports, sockets, and token caches are released deterministically:
   • Sync: with <Client>(...) as client:
   • Async: async with <Client>(...) as client: and async with DefaultAzureCredential() as credential: (from azure.identity.aio)

Snippets may abbreviate this setup, but production code should always follow both rules.

from azure.identity.aio import AzureCliCredential, DefaultAzureCredential, ManagedIdentityCredential

# Development
credential = AzureCliCredential()

# Production
# Local dev: DefaultAzureCredential. Production: set AZURE_TOKEN_CREDENTIALS=prod or AZURE_TOKEN_CREDENTIALS=<specific_credential>
credential = DefaultAzureCredential(require_envvar=True)
# Or use a specific credential directly in production:
# See https://learn.microsoft.com/python/api/overview/azure/identity-readme?view=azure-python#credential-classes
# credential = ManagedIdentityCredential()

Core Workflow

Basic Agent

import asyncio
from agent_framework.azure import AzureAIAgentsProvider
from azure.identity.aio import AzureCliCredential

async def main():
    async with (
        AzureCliCredential() as credential,
        AzureAIAgentsProvider(credential=credential) as provider,
    ):
        agent = await provider.create_agent(
            name="MyAgent",
            instructions="You are a helpful assistant.",
        )
        
        result = await agent.run("Hello!")
        print(result.text)

asyncio.run(main())

Agent with Function Tools

from typing import Annotated
from pydantic import Field
from agent_framework.azure import AzureAIAgentsProvider
from azure.identity.aio import AzureCliCredential

def get_weather(
    location: Annotated[str, Field(description="City name to get weather for")],
) -> str:
    """Get the current weather for a location."""
    return f"Weather in {location}: 72°F, sunny"

def get_current_time() -> str:
    """Get the current UTC time."""
    from datetime import datetime, timezone
    return datetime.now(timezone.utc).strftime("%Y-%m-%d %H:%M:%S UTC")

async def main():
    async with (
        AzureCliCredential() as credential,
        AzureAIAgentsProvider(credential=credential) as provider,
    ):
        agent = await provider.create_agent(
            name="WeatherAgent",
            instructions="You help with weather and time queries.",
            tools=[get_weather, get_current_time],  # Pass functions directly
        )
        
        result = await agent.run("What's the weather in Seattle?")
        print(result.text)

Agent with Hosted Tools

from agent_framework import (
    HostedCodeInterpreterTool,
    HostedFileSearchTool,
    HostedWebSearchTool,
)
from agent_framework.azure import AzureAIAgentsProvider
from azure.identity.aio import AzureCliCredential

async def main():
    async with (
        AzureCliCredential() as credential,
        AzureAIAgentsProvider(credential=credential) as provider,
    ):
        agent = await provider.create_agent(
            name="MultiToolAgent",
            instructions="You can execute code, search files, and search the web.",
            tools=[
                HostedCodeInterpreterTool(),
                HostedWebSearchTool(name="Bing"),
            ],
        )
        
        result = await agent.run("Calculate the factorial of 20 in Python")
        print(result.text)

Streaming Responses

async def main():
    async with (
        AzureCliCredential() as credential,
        AzureAIAgentsProvider(credential=credential) as provider,
    ):
        agent = await provider.create_agent(
            name="StreamingAgent",
            instructions="You are a helpful assistant.",
        )
        
        print("Agent: ", end="", flush=True)
        async for chunk in agent.run_stream("Tell me a short story"):
            if chunk.text:
                print(chunk.text, end="", flush=True)
        print()

Conversation Threads

from agent_framework.azure import AzureAIAgentsProvider
from azure.identity.aio import AzureCliCredential

async def main():
    async with (
        AzureCliCredential() as credential,
        AzureAIAgentsProvider(credential=credential) as provider,
    ):
        agent = await provider.create_agent(
            name="ChatAgent",
            instructions="You are a helpful assistant.",
            tools=[get_weather],
        )
        
        # Create thread for conversation persistence
        thread = agent.get_new_thread()
        
        # First turn
        result1 = await agent.run("What's the weather in Seattle?", thread=thread)
        print(f"Agent: {result1.text}")
        
        # Second turn - context is maintained
        result2 = await agent.run("What about Portland?", thread=thread)
        print(f"Agent: {result2.text}")
        
        # Save thread ID for later resumption
        print(f"Conversation ID: {thread.conversation_id}")

Structured Outputs

from pydantic import BaseModel, ConfigDict
from agent_framework.azure import AzureAIAgentsProvider
from azure.identity.aio import AzureCliCredential

class WeatherResponse(BaseModel):
    model_config = ConfigDict(extra="forbid")
    
    location: str
    temperature: float
    unit: str
    conditions: str

async def main():
    async with (
        AzureCliCredential() as credential,
        AzureAIAgentsProvider(credential=credential) as provider,
    ):
        agent = await provider.create_agent(
            name="StructuredAgent",
            instructions="Provide weather information in structured format.",
            response_format=WeatherResponse,
        )
        
        result = await agent.run("Weather in Seattle?")
        weather = WeatherResponse.model_validate_json(result.text)
        print(f"{weather.location}: {weather.temperature}°{weather.unit}")

Provider Methods

Method	Description
create_agent()	Create new agent on Azure AI service
get_agent(agent_id)	Retrieve existing agent by ID
as_agent(sdk_agent)	Wrap SDK Agent object (no HTTP call)

Hosted Tools Quick Reference

Tool	Import	Purpose
HostedCodeInterpreterTool	from agent_framework import HostedCodeInterpreterTool	Execute Python code
HostedFileSearchTool	from agent_framework import HostedFileSearchTool	Search vector stores
HostedWebSearchTool	from agent_framework import HostedWebSearchTool	Bing web search
HostedMCPTool	from agent_framework import HostedMCPTool	Service-managed MCP
MCPStreamableHTTPTool	from agent_framework import MCPStreamableHTTPTool	Client-managed MCP

Complete Example

import asyncio
from typing import Annotated
from pydantic import BaseModel, Field
from agent_framework import (
    HostedCodeInterpreterTool,
    HostedWebSearchTool,
    MCPStreamableHTTPTool,
)
from agent_framework.azure import AzureAIAgentsProvider
from azure.identity.aio import AzureCliCredential


def get_weather(
    location: Annotated[str, Field(description="City name")],
) -> str:
    """Get weather for a location."""
    return f"Weather in {location}: 72°F, sunny"


class AnalysisResult(BaseModel):
    summary: str
    key_findings: list[str]
    confidence: float


async def main():
    async with (
        AzureCliCredential() as credential,
        MCPStreamableHTTPTool(
            name="Docs MCP",
            url="https://learn.microsoft.com/api/mcp",
        ) as mcp_tool,
        AzureAIAgentsProvider(credential=credential) as provider,
    ):
        agent = await provider.create_agent(
            name="ResearchAssistant",
            instructions="You are a research assistant with multiple capabilities.",
            tools=[
                get_weather,
                HostedCodeInterpreterTool(),
                HostedWebSearchTool(name=),
                mcp_tool,
            ],
        )
        
        thread = agent.get_new_thread()
        
        
        result =  agent.run(
            ,
            thread=thread,
        )
        ()
        
        
        (, end=)
          chunk  agent.run_stream(, thread=thread):
             chunk.text:
                (chunk.text, end=, flush=)
        ()
        
        
        result =  agent.run(
            ,
            thread=thread,
            response_format=AnalysisResult,
        )
        analysis = AnalysisResult.model_validate_json(result.text)
        ()


 __name__ == :
    asyncio.run(main())

Conventions

• Always use async context managers: async with provider:
• Pass functions directly to tools= parameter (auto-converted to AIFunction)
• Use Annotated[type, Field(description=...)] for function parameters
• Use get_new_thread() for multi-turn conversations
• Prefer HostedMCPTool for service-managed MCP, MCPStreamableHTTPTool for client-managed

Best Practices

1. This SDK is async-first — use async def handlers and async with throughout.
2. Always use context managers for clients and async credentials. Wrap every client in with Client(...) as client: (sync) or async with Client(...) as client: (async). For async DefaultAzureCredential from azure.identity.aio, also use async with credential: so tokens and transports are cleaned up.

Reference Files

• references/tools.md: Detailed hosted tool patterns
• references/mcp.md: MCP integration (hosted + local)
• references/threads.md: Thread and conversation management
• references/advanced.md: OpenAPI, citations, structured outputs