diff --git a/package.json b/package.json
index dfaf24d013..49f399d9f3 100644
--- a/package.json
+++ b/package.json
@@ -77,7 +77,10 @@
 				"name": "copilot",
 				"displayName": "GitHub Copilot coding agent",
 				"description": "Delegate tasks to the GitHub Copilot coding agent. The agent works asynchronously to implement changes, iterates via chat, and can create or update pull requests as needed.",
-				"when": "config.chat.agentSessionsViewLocation && config.chat.agentSessionsViewLocation != 'disabled'"
+				"when": "config.chat.agentSessionsViewLocation && config.chat.agentSessionsViewLocation != 'disabled'",
+				"capabilities": {
+					"supportsFileAttachments": true
+				}
 			}
 		],
 		"remoteCodingAgents": [
diff --git a/src/github/copilotRemoteAgent.ts b/src/github/copilotRemoteAgent.ts
index 280bfcfb24..23a0691857 100644
--- a/src/github/copilotRemoteAgent.ts
+++ b/src/github/copilotRemoteAgent.ts
@@ -5,7 +5,7 @@
 
 import * as pathLib from 'path';
 import * as marked from 'marked';
-import vscode from 'vscode';
+import vscode, { ChatPromptReference } from 'vscode';
 import { parseSessionLogs, parseToolCallDetails, StrReplaceEditorToolData } from '../../common/sessionParsing';
 import { COPILOT_ACCOUNTS } from '../common/comment';
 import { CopilotRemoteAgentConfig } from '../common/config';
@@ -573,7 +573,7 @@ export class CopilotRemoteAgentManager extends Disposable {
 			return `${header}\n\n${collapsedContext}`;
 		};
 
-		const problemStatement: string = `${prompt} ${problemContext ? `: ${problemContext}` : ''}`;
+		const problemStatement: string = `${prompt}\n${problemContext ?? ''}`;
 		const payload: RemoteAgentJobPayload = {
 			problem_statement: problemStatement,
 			event_type: 'visual_studio_code_remote_agent_tool_invoked',
@@ -751,12 +751,42 @@ export class CopilotRemoteAgentManager extends Disposable {
 		return fullText;
 	}
 
-	public async provideNewChatSessionItem(options: { prompt?: string; history: ReadonlyArray<vscode.ChatRequestTurn | vscode.ChatResponseTurn>; metadata?: any; }, token: vscode.CancellationToken): Promise<ChatSessionWithPR | ChatSessionFromSummarizedChat> {
-		const { prompt, history } = options;
-		if (!prompt) {
+	extractFileReferences(references: readonly ChatPromptReference[] | undefined): string | undefined {
+		if (!references || references.length === 0) {
+			return;
+		}
+		// 'file:///Users/jospicer/dev/joshbot/.github/workflows/build-vsix.yml'  -> '.github/workflows/build-vsix.yml'
+		const parts: string[] = [];
+		for (const ref of references) {
+			if (ref.value instanceof vscode.Uri && ref.value.scheme === 'file') { // TODO: Add support for more kinds of references
+				const workspaceFolder = vscode.workspace.getWorkspaceFolder(ref.value);
+				if (workspaceFolder) {
+					const relativePath = pathLib.relative(workspaceFolder.uri.fsPath, ref.value.fsPath);
+					parts.push(` - ${relativePath}`);
+				}
+			}
+		}
+
+		if (!parts.length) {
+			return;
+		}
+
+		parts.unshift('The user has attached the following files as relevant context:');
+		return parts.join('\n');
+	}
+
+	cleanPrompt(prompt: string): string {
+		// Remove #file:xxxx from the prompt
+		return prompt.replace(/#file:\S+/g, '').trim();
+	}
+
+	public async provideNewChatSessionItem(options: { request: vscode.ChatRequest; prompt?: string; history: ReadonlyArray<vscode.ChatRequestTurn | vscode.ChatResponseTurn>; metadata?: any; }, token: vscode.CancellationToken): Promise<ChatSessionWithPR | ChatSessionFromSummarizedChat> {
+		const { request, history } = options;
+		if (!options.prompt) {
 			throw new Error(`Prompt is expected to provide a new chat session item`);
 		}
 
+		const prompt = this.cleanPrompt(options.prompt);
 		const { source, summary } = options.metadata || {};
 
 		// Ephemeral session for new session creation flow
@@ -775,7 +805,10 @@ export class CopilotRemoteAgentManager extends Disposable {
 
 		const result = await this.invokeRemoteAgent(
 			prompt,
-			(await this.extractHistory(history)),
+			[
+				this.extractFileReferences(request.references),
+				await this.extractHistory(history)
+			].join('\n\n').trim(),
 			false,
 		);
 		if (result.state !== 'success') {
diff --git a/src/github/copilotRemoteAgent/chatSessionContentBuilder.ts b/src/github/copilotRemoteAgent/chatSessionContentBuilder.ts
index cc3ea9fc2a..11cd61bca2 100644
--- a/src/github/copilotRemoteAgent/chatSessionContentBuilder.ts
+++ b/src/github/copilotRemoteAgent/chatSessionContentBuilder.ts
@@ -248,6 +248,11 @@ export class ChatSessionContentBuilder {
 				const titleMatch = jobInfo.problem_statement.match(/TITLE: \s*(.*)/i);
 				if (titleMatch && titleMatch[1]) {
 					prompt = titleMatch[1].trim();
+				} else {
+					const split = jobInfo.problem_statement.split('\n');
+					if (split.length > 0) {
+						prompt = split[0].trim();
+					}
 				}
 				Logger.appendLine(`Session 0: Found problem_statement from Jobs API: ${prompt}`, this.loggerId);
 				return prompt;