Claude Code on Microsoft Foundry Setup

TL;DR

Microsoft Foundry connects Claude Code to Azure-hosted Anthropic models with Azure AD authentication. Configure deployments and regions, opt into auto mode explicitly, and review PowerShell tool defaults on Windows engineering laptops.

Prerequisites & Requirements

• {"task": "Claude Code installed", "description": "Latest approved build is available on the target machine"}
• {"task": "Credentials ready", "description": "Login, API key, or provider credentials match the workflow"}
• {"task": "Test environment prepared", "description": "A disposable project or sandbox can validate the setup"}
• {"task": "Team policy reviewed", "description": "Managed settings and MCP policy align with org requirements"}
• {"task": "Rollback documented", "description": "Steps to disable or revert the integration are written down"}

Core Concepts Explained

Third-party provider session

Foundry sessions use provider-specific auth and show the provider name in /status instead of first-party billing labels.

Shared timeout behavior

Foundry shares Vertex idle timeout defaults and API_FORCE_IDLE_TIMEOUT opt-out semantics.

Auto mode opt-in

Set CLAUDE_CODE_ENABLE_AUTO_MODE=1 for Opus auto mode on Foundry as with other third-party providers.

Windows PowerShell tool

PowerShell tool defaults on for Bedrock, Vertex, and Foundry on Windows unless explicitly disabled.

Step-by-Step Implementation Guide

1. Provision deployment. Create Foundry deployment with required Anthropic model and capacity.

2. Configure Azure auth. Set up managed identity or service principal per Azure AI guidance.

3. Export env vars. Map endpoint, deployment, and tenant variables documented for Claude Code Foundry.

4. Verify /status. Confirm provider shows Microsoft Foundry and models list expected deployments.

5. Enable auto mode optionally. Export CLAUDE_CODE_ENABLE_AUTO_MODE=1 if teams want auto mode on Opus 4.7/4.8.

6. Tune PowerShell on Windows. Set CLAUDE_CODE_USE_POWERSHELL_TOOL=0 if bash-only workflows are required.

7. Test streaming tools. Streaming tool execution is always enabled on Foundry—including when telemetry is off.

8. Publish runbook. Document Azure quota escalation and Foundry-specific support contacts.

Foundry Setup Checklist

• {"task": "Deployment live", "description": "Model deployment accepts test prompts"}
• {"task": "Auth configured", "description": "Managed identity or SP works on dev machines"}
• {"task": "Status correct", "description": "/status shows Foundry provider"}
• {"task": "Auto mode decision", "description": "CLAUDE_CODE_ENABLE_AUTO_MODE set if wanted"}
• {"task": "Windows tools reviewed", "description": "PowerShell default acknowledged on Windows"}

Operational Guardrails

• Pin Claude Code or Agent SDK versions in team docs and CI images before rolling out integration-specific flags such as --remote-control, --chrome, or provider env vars.
• Run a five-minute smoke test on a disposable profile after managed settings or MCP policy changes—do not wait for user reports to discover blocked servers.
• Capture /status output and relevant env sources when escalating provider or transport issues; recent builds expose more provider and region diagnostics.
• Revisit allowlists and OAuth scopes after major CHANGELOG.md MCP or auth fixes; enforcement timing changes often require client upgrades, not just policy edits.
• Document rollback: which env vars to unset, which MCP entries to remove, and who can publish emergency managed-settings overrides.

Troubleshooting

Login policy blocks Foundry

Ensure forceLoginOrgUUID managed settings do not block third-party provider sessions.

Auto mode message confusing

Follow CLAUDE_CODE_ENABLE_AUTO_MODE opt-in docs rather than first-party assumptions.

Unexpected PowerShell prompts

Disable with CLAUDE_CODE_USE_POWERSHELL_TOOL=0 on Windows if undesired.

Stream hangs

Check API_FORCE_IDLE_TIMEOUT for long-running tool calls.

Source Verification Notes

Verified against the public anthropics/claude-code repository README, plugins/README.md, and CHANGELOG.md on 2026-06-14:

• CHANGELOG.md enables auto mode on Foundry with CLAUDE_CODE_ENABLE_AUTO_MODE=1 for Opus 4.7/4.8.
• CHANGELOG.md restored five-minute idle timeout on Foundry/Vertex unless API_FORCE_IDLE_TIMEOUT=0.
• CHANGELOG.md enables PowerShell tool by default on Windows for Foundry, Vertex, and Bedrock.
• CHANGELOG.md shows provider name instead of API Usage Billing on third-party providers.
• CHANGELOG.md fixed forceLoginOrgUUID blocking Bedrock, Vertex, and Foundry alongside org pin.

Duplicate Check

This guide covers Microsoft Foundry provider setup. It complements claude-code-on-google-vertex-ai-setup.mdx and claude-code-on-amazon-bedrock-setup.mdx for multi-cloud standards.

References

• Microsoft Foundry - https://code.claude.com/docs/en/microsoft-foundry
• Google Vertex AI setup - claude-code-on-google-vertex-ai-setup
• Amazon Bedrock setup - claude-code-on-amazon-bedrock-setup