The Model Context Protocol (MCP) is an open standard that defines how AI applications communicate with external data sources. Starting with 2026 release wave 1 (version 28.0), Business Central includes an MCP server that lets AI clients read data, perform actions, and work with your BC environment through a conversational interface.
This means you can ask an AI assistant to look up a customer balance, list open sales orders, or create a purchase order, all without opening Business Central directly.
What the MCP Server Does
The Business Central MCP server exposes your environment’s API pages and API queries to AI clients as tools. The default configuration gives read-only access: agents discover the API pages and API queries that the signed-in user has permission to use.
Administrators can enable more capabilities by turning on Server Features in an MCP configuration:
| Server Feature | What it does |
|---|---|
| API Tools | You choose which API pages and API queries agents can use, and which operations (read, create, modify, delete, actions) are allowed on each |
| Dynamic Tool Mode | Agents discover available tools at runtime, so you do not configure each tool by hand. Useful when you expose many API objects |
| Data Query Tools | Agents run read-only queries directly against the Business Central database, which covers data that has no API page |
With these features turned on, agents can:
- List, create, update, and delete records such as customers, items, and sales orders.
- Execute business processes like posting documents or changing statuses.
- Run read-only queries for analysis across tables that no API exposes.
- Answer natural language questions about Business Central data.
The capabilities available depend on which Server Features are enabled and the permissions assigned to each API object.
Data Query Tools in Version 29
Data query support arrived with version 29.0 (2026 release wave 2). Before that, an agent could only read what an API page or API query exposed. With Data Query Tools enabled, the agent can define a query, validate it, and run it, all read-only and under the signed-in user’s permissions. Microsoft’s documentation still labels the feature as preview, so test it in a sandbox before you turn it on in production.
Supported AI Clients
An MCP client is any AI application that can connect to the Business Central MCP server. Supported clients include:
| Client | Setup required |
|---|---|
| Visual Studio Code with GitHub Copilot | None (uses pre-registered Microsoft Entra app) |
| Copilot Studio | None (uses pre-registered Microsoft Entra app) |
| Claude, ChatGPT, MCP Inspector | Register your own Microsoft Entra ID application |
Any client that complies with the Model Context Protocol specification can connect.
How Connections Work
All MCP clients connect to the same endpoint:
https://mcp.businesscentral.dynamics.comThe client specifies which Business Central environment to connect to using HTTP headers:
| Header | Description | Example |
|---|---|---|
TenantId |
Your Microsoft Entra tenant ID (GUID) | aaaabbbb-0000-cccc-1111-dddd2222eeee |
EnvironmentName |
The BC environment name | Production |
Company |
The company within the environment | CRONUS USA, Inc. |
ConfigurationName |
(Optional) A specific MCP server configuration | SalesTeamConfig |
Some clients can leave out the first three headers. Visual Studio Code with GitHub Copilot and GitHub Copilot CLI can connect without any of them: the server picks the tenant from your sign-in, and the agent uses the list_environments and list_companies tools to find the environment and company. Copilot Studio still requires all three.
If a company or configuration name contains non-ASCII characters such as æ, ø, or å, encode the value as Base64 (UTF-8) in the format =?base64?<encodedvalue>?=. Copilot Studio does this for you.
Authentication
The MCP server uses OAuth 2.0 Authorization Code flow with PKCE through Microsoft Entra ID. All operations run under your user identity and permissions. This means:
- The agent can only access data you have permission to see.
- All actions are logged under your user account in the audit trail.
- There is no separate service account or elevated access.
Microsoft MCP clients (VS Code and Copilot Studio) use a pre-registered Entra application, so no extra setup is required. For non-Microsoft clients, you need to register your own application in Microsoft Entra ID.
Connect from Visual Studio Code
If you use GitHub Copilot in VS Code, connecting to Business Central requires minimal setup:
- Open VS Code with the GitHub Copilot extension installed.
- Configure the MCP server connection. You need to specify the endpoint URL and the HTTP headers for your tenant, environment, and company.
- Start a conversation with Copilot. It will discover the available tools from the MCP server and can use them to answer questions about your BC data.
The exact configuration steps depend on the MCP client configuration format in VS Code. See the Microsoft documentation for current setup instructions.
Connect from Copilot Studio
Copilot Studio agents can connect to Business Central through the MCP server to build custom conversational experiences. Since Copilot Studio uses a pre-registered Microsoft application, no Entra ID app registration is needed.
Configure the connection in your Copilot Studio agent by pointing it to the MCP server endpoint with the appropriate headers for your environment.
Connect Non-Microsoft Clients
For AI clients like Claude, ChatGPT, or custom agents:
- Register an application in Microsoft Entra ID with the appropriate permissions for Business Central.
- Configure the MCP client to use the registered application for authentication.
- Point the client to
https://mcp.businesscentral.dynamics.comwith the required HTTP headers.
The MCP server exposes Protected Resource Metadata (PRM) to help clients discover authorization endpoints and required parameters.
Configure Write Operations
By default, the MCP server only allows read access. To enable agents to create, modify, or delete records:
- Configure API page objects with specific permissions for create, modify, delete, and bound actions.
- Use the optional
ConfigurationNameheader to apply different configurations for different teams or use cases.
See the Microsoft documentation on configuring the Business Central MCP server for detailed steps.
Feature Management
In version 28.0, the Enable MCP Server access feature is listed in Feature Management and enabled for all users by default. Disabling it has no effect, and Microsoft plans to remove the toggle. If you still see it after updating to version 29, leave it as it is. Access is controlled through MCP configurations and user permissions, not through this switch.
For the other agent and Copilot changes that shipped alongside data queries, see What’s New in Business Central 2026 Wave 2 (v29).