Using Microsoft 365 Copilot app , you can define how your Copilot Agent should behave, connect it to your own knowledge base and documents, and then simply start chatting with it in natural language. Once set up, the agent searches through your content, understands your question, and delivers the answer — all in one place, using plain, conversational language.
The result is a practical, easy-to-use AI assistant that turns scattered information into instant answers and helps you focus on what really matters.
How To Create An Agent
Creating your first Copilot Agent is very simple. It takes just two steps to start your journey with AI agents in Microsoft 365.
- Open Microsoft 365 Copilot
- Select New Agent
That’s it. From here, you can start defining how your agent should work and what knowledge it should use.
AI Agent configuration
Well done — you’re almost there 🙂
Now it’s time to configure your AI agent. In this step, you give your agent a name, tell it what it should do, and define where it should find information.
Don’t worry — you won’t need to write any code or use advanced IT tools or features. Everything is done through a simple, guided interface.
In this example, we’ll create a simple IT Support Copilot Agent. Its job will be to help users find answers to common IT questions by using:
- Internal documentation from our website
- Official Microsoft learning resources
Once configured, users can interact with the agent using plain, everyday language, just like chatting with a colleague. The agent will search the connected knowledge sources and provide clear, relevant answers — saving time and reducing the need to search through multiple pages or documents.
Agent Details
First, pick a cool (or slightly funny) name for your assistant. A good name makes the agent feel more approachable and reminds users that it’s here to help, not to replace them.
You can also choose a logo for your AI agent. This can be:
- An image you like
- Your company logo
- Or even an image generated directly in Microsoft 365 Copilot
There’s no right or wrong choice — it’s completely up to you. Make it recognizable, friendly, and easy for people to remember.
Description
Once the name is chosen, it’s time to add a description.
In just a few words, explain what this agent is and when it should be used. This helps your colleagues understand when to talk to it — and helps other AI agents (if enabled) know exactly what it’s good at.
Think of the description as your agent’s elevator pitch. Short, clear, and to the point. The better you describe its purpose, the more useful (and less confused) your AI assistant will be.
Instructions
Let’s give some identity to our AI agent.
In the Instructions section, you clearly define who the agent is, what it does, why it was created, and how it can help you. This is where you shape the agent’s personality, responsibilities, and boundaries.
Think of it as writing a short “about me” for your AI assistant. The clearer and more specific you are, the more useful and reliable your agent will be when people start asking questions.
In the Instructions section, you tell your agent:
- What it should do
- How it should behave
- What rules it should follow
Knowledgebase
Now it’s time to give your AI agent something to learn from.
This is where you define the knowledge base — the sources your agent will use to find information and generate answers. After all, you don’t want your agent searching the entire internet and coming back with unverified or outdated information, right? 🙂
It’s worth knowing that a Microsoft 365 Copilot Agent is limited to up to 4 websites as knowledge sources.
The good news? You can upload many more files and documents, so you still have plenty of flexibility.
When adding websites, always choose the ones you normally use to find reliable information. There’s no need to give your agent access to an entire website if it doesn’t need it. In fact, the more specific you are, the better your agent’s answers will be.
👉 Best practice:
Instead of adding a full website, add specific subpages that contain relevant content.
Example:
- ❌ macnamara.co.uk
- ✅ https://macnamara.co.uk/how-to-guides/
By narrowing the scope, you help your agent:
- Find answers faster
- Stay focused on the right topics
- Avoid irrelevant or confusing information
Remember: less is more. A smaller, well-chosen knowledge base almost always beats a large, unfocused one.
Knowledge options – what to turn on (and off)
Under the Knowledge section, you’ll see a few additional options. These settings control how far your agent is allowed to search for information — and getting them right is important.
Search all websites — Turn OFF
You usually don’t want your agent searching across all websites. Turning this off ensures the agent doesn’t look beyond the sources you explicitly provide. This keeps answers focused, accurate, and based only on trusted content.
Only use specified sources — Turn ON
This is exactly what we want.
When this option is enabled, your agent will only use the websites and documents you selected as its knowledge base — nothing more, nothing less.
This setting gives you full control over:
- Accuracy
- Consistency
- Trustworthiness
👥 Reference people in organization — Optional
This option allows the agent to use organization chart and profile data to answer people-related questions (for example: Who is responsible for X? or Who does this person report to?).
It can be useful for:
- Internal helpdesk scenarios
- HR or onboarding agents
- “Who does what” type questions
You can learn more about this option in official documentation on Build Agents with Agent Builder in Microsoft 365 Copilot | Microsoft Learn
Capabilities
At this point, your AI agent already has a name, description, instructions, and a knowledge base.
The next step is to decide what your agent is allowed to do.
Think of Capabilities as permissions. You can give your agent more power — or keep it focused on answering questions only.
Create documents, charts, and code
Turn this ON if you want your agent to:
- Create Word documents
- Work with Excel data
- Help with PowerPoint presentations
- Generate simple code snippets
Pro tip 💡
You can make the agent create documents using your own templates.
Just add a Word template to the knowledge base and clearly mention it in the Instructions (for example: “Use the provided Word template when creating documents”).
Create images
If your agent’s main job is to search for information and answer questions, you can safely turn this OFF.
However, this option can be useful if your agent:
- Helps create presentations
- Generates charts or visuals
- Supports marketing or training materials
Choose only what you really need — fewer capabilities often mean more focused and reliable results.
Suggestedprompts
The last step is Suggested prompts.
These are example questions that help users understand how to start a conversation with your AI agent. Think of them as conversation starters or quick tips that show what the agent is good at.
Suggested prompts are especially useful because:
- Users don’t have to guess what to ask
- They immediately see the agent’s capabilities
- It reduces confusion for first-time users
Testing
Now comes the fun part — testing your Copilot Agent.
Use the Agent preview to start a real conversation with your agent. Ask the same questions you or your colleagues would normally search for across multiple websites, documents, or SharePoint pages. This is the moment where you can see how well your agent understands its role and uses the knowledge you provided.
Don’t expect perfection on the first try — that’s completely normal 🙂
If something feels off, the most important place to look is the Instructions section.
Improve by refining instructions
If the answers are too short, too generic, or slightly off-topic:
- Go back to Instructions
- Make them more detailed
- Be clearer about what the agent should and should not do
In most cases, you don’t need to change the knowledge base at all — better instructions usually solve 80% of issues.
Test, adjust, repeat
Spend a few minutes:
- Asking different types of questions
- Checking tone and clarity
- Verifying that answers come only from trusted sources
This small investment pays off quickly once others start using your agent.
Create and start using your agent
Once you’re happy with the results, click the Create button.
Your Copilot Agent will be saved and added to your agent list, ready to be used whenever you need it.
From now on, instead of searching through multiple pages, documents, or tools, you can simply ask your agent — using natural, everyday language.
And that’s it 🎉 Congratulations 🎉
You’ve just built your first Microsoft 365 Copilot Agent!
You’ve just created a practical, real-world Microsoft 365 Copilot Agent that can save time, reduce frustration, and make everyday work easier.
New to Copilot in M365? Check out our blog on getting started: Getting Started with Copilot Chat – Macnamara ICT
And, for some more information on the fully licensed version: Unlocking the Full Power of Microsoft 365 Copilot – Macnamara ICT
