Copilot in SharePoint: New Features Released in July 2026

Microsoft has released another major update to Copilot in SharePoint, introducing new AI-powered capabilities that make it easier to create content, automate business processes, organize files, and interact with enterprise knowledge using natural language.

A significant milestone this month is that Copilot in SharePoint is now rolling out as enabled by default for all users with a Microsoft 365 Copilot license. This makes AI experiences more accessible across SharePoint environments.

Here’s everything new in the July 2026 release.

A. Create Content Faster with AI

1. Generate Word, Excel, and PowerPoint Files from SharePoint Content

The biggest enhancement lets you create Microsoft Office documents based on your SharePoint content through natural language prompts. Instead of starting completely fresh, the Copilot can analyze your SharePoint’s current contents like its files, pages, and libraries, then generate something for you.

• Word documents
• Excel workbooks
• PowerPoint presentations

This eliminates the need for manual content drafting and ensures the generated output is based on reliable organizational data.

Example

You can create a PowerPoint presentation to summarize your current project with your meeting notes and docs located on SharePoint. A project manager could easily do this.

Example Prompt

Create a PowerPoint presentation to summarize the various elements of this project, including its milestones, risks, completed tasks, and upcoming deliverables, based on these documents in this folder.

2. Build Interactive HTML Reports

Now you can use Copilot in SharePoint to automatically build entirely interactive HTML Reports from your SharePoint Content instead of having to manually build them yourself. You can instantly create browser-based reports that include things like

• Charts
• Tables
• Filters
• KPIs
• Interactive navigation

You can share these reports to your internal team for their review by your leadership, or as an update on projects.

Example

Generate a sales dashboard using quarterly reports stored inside a SharePoint document library.

Example Prompt

Create an interactive sales dashboard showing this quarter’s sales data, including revenue by region, by trend over time, with product filters.

B. Manage Files Directly Through Chat with Copilot in SharePoint

1. Organize Files and Folder Structures

File management has now turned into a conversational process. Instead of manually creating folders or reorganizing their libraries, people are now describing how they’d like to organize their content.

Copilot can:

• Analyze folder contents
• Recommend folder hierarchies
• Generate mapping structures
• Apply the new organization after approval

Example Prompt

Analyze this folder and recommend a better folder structure. Show the proposed organization first, then reorganize the files after I approve it.

2. Share Files Using Natural Language

You’ll find that sharing documents has become even easier, too.

For example, users can now ask Copilot to share a particular file with an individual straight from within their chat, avoiding having to wade through a series of SharePoint menu screens.

Example:

Share this document with Sarah Johnson and grant edit permissions.

C. Automate Everyday SharePoint Tasks

Microsoft 365 continues expanding automation capabilities inside SharePoint.

1. Approval Management

With this update, users can now customize their document approval workflows through natural language rather than creating Power Automate flows to manage simple use cases. Now, Copilot will even help you set up your approval process right within your SharePoint libraries.

Typical scenarios include:

• Document reviews
• Policy approvals
• Content publishing
• Request management

Example Prompt

Configure approval tracking on your document library. Group these items with their approval status. Highlight the overdue approvals.

2. Smart Notification Rules

Copilot now creates notification rules using simple prompts.

Examples include:

• Notify reviewers before deadlines
• Alert document owners when metadata changes
• Send reminders for expiring documents

Example Prompt

Remind the document owner via e-mail 5 days prior to the review date.

3. Quick Steps

You can add frequently used actions right into your SharePoint grids as reusable Quick Steps, enabling you to execute common processes with just one click, such as repeatedly performed actions like:

• Updating review dates
• Changing document status
• Applying metadata
• Moving files

Example Prompt

Add a Quick Step that changes the review date to today and updates the document status to “Under Review.”

D. Build Reusable AI Skills

1. Create Skills Without Starting from Scratch

With the introduction of built-in Skills, Microsoft has made it easier to create reusable AI workflows.

These skills can:

• Adhere to templates approved by the organization
• Use organizational branding
• Standardize documentation
• Initialize SharePoint sites
• Automate recurring business processes

These skills, once created, can then be reused in different teams.

Example Prompt

Create a project page using our approved template and make it a reusable skill.

2. Find Skills Using /Skills

Now users can simply type:

/Skills

and get all the skills that are available in their current SharePoint site.

This will increase discoverability and encourage the use of AI capabilities provided by the organization.

Improve Copilot Chat Experience

The new update has also made enhancements to the chat experience for better transparency and usability.

1. Improved Citations: Clean and concise citations have been added to the responses, which refer to the original SharePoint source.
2. It becomes easier for users to validate AI responses without having to look for them separately.
3. Sensitivity Labels: Copilot has displayed Microsoft Purview sensitivity labels along with the referred documents. The labels make it easy for users to comprehend the data classification and comply with regulatory obligations by minimizing unnecessary data exposure.
4. Clickable Links: The URLs provided as output from Copilot are fully clickable, thus enabling users to easily navigate to SharePoint documents.
5. Transparency of Reasoning: For models that support the feature, Copilot now makes it more visible in the process of generating the answer. This helps users better understand AI-generated recommendations and increases confidence in complex answers.

Example Prompt

From the documents found in this library, provide a summary of key deliverables for the product launch of Q3 and who is responsible for delivering each.

Faster Access with the New Copilot Button

Microsoft has also improved the user experience of engaging with Copilot.

One-Click Questions

A prompt box appears when clicking on the Copilot button, thus enabling users to ask questions without having to open the Copilot interface.

Guided Onboarding

New contextual prompts introduce users to Copilot features and encourage adoption across SharePoint sites.

Model Information

Power users can enter:

–about

to view the AI model and version currently powering Copilot responses.

New Controls for Administrators and Site Owners

Several governance improvements have also been made for administrators and SharePoint site owners by Microsoft.

Single AI Model Provider

Now, Copilot in SharePoint works with Microsoft’s most recent OpenAI reasoning model instead of depending on some fallback models.

Benefits include:

• More consistent responses
• Improved answer quality
• Simplified administration
• Better reliability

Site-Level Copilot Control

Site owners will be able to turn the Copilot button on/off on their individual SharePoint sites. This offers more flexibility in terms of governance, particularly when dealing with highly sensitive/restricted sites.

Availability

The July 2026 Copilot in SharePoint functionality is available for those organizations that have licensed the Microsoft 365 Copilot.

The organizations who don’t have Copilot turned on by default can still use this experience with the help of their Microsoft 365 administrator during the rollout period.

Try it Today!

The July 2026 release is among the biggest updates to Copilot in SharePoint ever seen. Through AI-powered Office documents and interactive HTML dashboards, conversational file management and built-in approvals, and reusable AI skills, along with improved governance tools, Microsoft has been continuously reinventing SharePoint as an intelligent workplace thanks to AI technology.

If you’re already utilizing Microsoft 365 Copilot, these improvements will definitely help you work faster and smarter.

Frequently Asked Questions

1. What are the ways for users to leverage Copilot in SharePoint features available since July 2026?

Users will be able to take advantage of all the features offered in July 2026 by making use of natural language prompts to create documents, generate reports, manage their files, automate the approval process, and create AI skills.

2. What is the procedure to implement Copilot in SharePoint in existing workflows?

The first step would be to enable Copilot for licensed users. Next, identify repetitive processes in terms of content and approvals, create reusable prompts and AI skills, automate workflows, and train employees on using Copilot.

3. What are the limitations encountered while implementing a Copilot in SharePoint?

Some of the typical challenges that might be encountered during the implementation of Copilot in SharePoint are data governance, user permissions, SharePoint content quality, user adoption, and security & compliance configurations.