---
name: 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.
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

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

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

## Environment Variables

```bash
export AZURE_AI_PROJECT_ENDPOINT="https://<project>.services.ai.azure.com/api/projects/<project-id>"
export AZURE_AI_MODEL_DEPLOYMENT_NAME="gpt-4o-mini"
export BING_CONNECTION_ID="your-bing-connection-id"  # For web search
```

## Authentication

```python
from azure.identity.aio import AzureCliCredential, DefaultAzureCredential

# Development
credential = AzureCliCredential()

# Production
credential = DefaultAzureCredential()
```

## Core Workflow

### Basic Agent

```python
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

```python
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

```python
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

```python
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

```python
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

```python
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

```python
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="Bing"),
                mcp_tool,
            ],
        )
        
        thread = agent.get_new_thread()
        
        # Non-streaming
        result = await agent.run(
            "Search for Python best practices and summarize",
            thread=thread,
        )
        print(f"Response: {result.text}")
        
        # Streaming
        print("\nStreaming: ", end="")
        async for chunk in agent.run_stream("Continue with examples", thread=thread):
            if chunk.text:
                print(chunk.text, end="", flush=True)
        print()
        
        # Structured output
        result = await agent.run(
            "Analyze findings",
            thread=thread,
            response_format=AnalysisResult,
        )
        analysis = AnalysisResult.model_validate_json(result.text)
        print(f"\nConfidence: {analysis.confidence}")


if __name__ == "__main__":
    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

## Reference Files

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