From 8662728bbabdc2b6594e9bcb3872febc4afba5a0 Mon Sep 17 00:00:00 2001
From: Dmytro Struk <13853051+dmytrostruk@users.noreply.github.com>
Date: Wed, 18 Feb 2026 12:46:41 -0800
Subject: [PATCH 1/6] Updated declarative kind mapping

---
 .../agent_framework_declarative/_loader.py    |  4 +-
 .../agent_framework_declarative/_models.py    |  8 ++-
 .../tests/test_declarative_loader.py          | 52 ++++++++++++++++
 .../tests/test_declarative_models.py          | 62 +++++++++++++++++++
 4 files changed, 122 insertions(+), 4 deletions(-)

diff --git a/python/packages/declarative/agent_framework_declarative/_loader.py b/python/packages/declarative/agent_framework_declarative/_loader.py
index 001f6f511e..38ae550bf2 100644
--- a/python/packages/declarative/agent_framework_declarative/_loader.py
+++ b/python/packages/declarative/agent_framework_declarative/_loader.py
@@ -452,7 +452,7 @@ def create_agent_from_dict(self, agent_def: dict[str, Any]) -> Agent:
             name=prompt_agent.name,
             description=prompt_agent.description,
             instructions=prompt_agent.instructions,
-            **chat_options,
+            default_options=chat_options,
         )
 
     async def create_agent_from_yaml_path_async(self, yaml_path: str | Path) -> Agent:
@@ -569,7 +569,7 @@ async def create_agent_from_dict_async(self, agent_def: dict[str, Any]) -> Agent
             name=prompt_agent.name,
             description=prompt_agent.description,
             instructions=prompt_agent.instructions,
-            **chat_options,
+            default_options=chat_options,
         )
 
     async def _create_agent_with_provider(self, prompt_agent: PromptAgent, mapping: ProviderTypeMapping) -> Agent:
diff --git a/python/packages/declarative/agent_framework_declarative/_models.py b/python/packages/declarative/agent_framework_declarative/_models.py
index 181b3307b7..8ccd8aa691 100644
--- a/python/packages/declarative/agent_framework_declarative/_models.py
+++ b/python/packages/declarative/agent_framework_declarative/_models.py
@@ -110,8 +110,12 @@ def from_dict(
             # We're being called on a subclass, use the normal from_dict
             return SerializationMixin.from_dict.__func__(cls, value, dependencies=dependencies)  # type: ignore[attr-defined, no-any-return]
 
-        # Filter out 'type' (if it exists) field which is not a Property parameter
-        value.pop("type", None)
+        # The YAML spec uses 'type' for the data type, but Property stores it as 'kind'
+        if "type" in value:
+            if "kind" not in value:
+                value["kind"] = value.pop("type")
+            else:
+                value.pop("type")
         kind = value.get("kind", "")
         if kind == "array":
             return ArrayProperty.from_dict(value, dependencies=dependencies)
diff --git a/python/packages/declarative/tests/test_declarative_loader.py b/python/packages/declarative/tests/test_declarative_loader.py
index a200a69310..bd58e0044a 100644
--- a/python/packages/declarative/tests/test_declarative_loader.py
+++ b/python/packages/declarative/tests/test_declarative_loader.py
@@ -556,6 +556,58 @@ def test_create_agent_from_dict_without_model_or_client_raises(self):
         with pytest.raises(DeclarativeLoaderError, match="ChatClient must be provided"):
             factory.create_agent_from_dict(agent_def)
 
+    def test_create_agent_from_dict_output_schema_in_default_options(self):
+        """Test that outputSchema is passed as response_format in Agent.default_options."""
+        from unittest.mock import MagicMock
+
+        from pydantic import BaseModel
+
+        from agent_framework_declarative import AgentFactory
+
+        agent_def = {
+            "kind": "Prompt",
+            "name": "TestAgent",
+            "instructions": "You are helpful.",
+            "outputSchema": {
+                "properties": {
+                    "answer": {"type": "string", "required": True, "description": "The answer."},
+                },
+            },
+        }
+
+        mock_client = MagicMock()
+        factory = AgentFactory(client=mock_client)
+        agent = factory.create_agent_from_dict(agent_def)
+
+        assert "response_format" in agent.default_options
+        assert isinstance(agent.default_options["response_format"], type)
+        assert issubclass(agent.default_options["response_format"], BaseModel)
+
+    def test_create_agent_from_dict_chat_options_in_default_options(self):
+        """Test that chat options (temperature, top_p) are in Agent.default_options."""
+        from unittest.mock import MagicMock
+
+        from agent_framework_declarative import AgentFactory
+
+        agent_def = {
+            "kind": "Prompt",
+            "name": "TestAgent",
+            "instructions": "You are helpful.",
+            "model": {
+                "options": {
+                    "temperature": 0.7,
+                    "topP": 0.9,
+                },
+            },
+        }
+
+        mock_client = MagicMock()
+        factory = AgentFactory(client=mock_client)
+        agent = factory.create_agent_from_dict(agent_def)
+
+        assert agent.default_options.get("temperature") == 0.7
+        assert agent.default_options.get("top_p") == 0.9
+
 
 class TestAgentFactorySafeMode:
     """Tests for AgentFactory safe_mode parameter."""
diff --git a/python/packages/declarative/tests/test_declarative_models.py b/python/packages/declarative/tests/test_declarative_models.py
index f7a56f2c96..3ac3e05d86 100644
--- a/python/packages/declarative/tests/test_declarative_models.py
+++ b/python/packages/declarative/tests/test_declarative_models.py
@@ -103,6 +103,50 @@ def test_property_from_dict(self):
         assert prop.description == "A test property"
         assert prop.required is True
 
+    def test_property_from_dict_type_maps_to_kind(self):
+        """Test that 'type' field in YAML is mapped to 'kind' internally."""
+        data = {
+            "name": "test_prop",
+            "type": "string",
+            "description": "A test property",
+            "required": True,
+        }
+        prop = Property.from_dict(data)
+        assert prop.name == "test_prop"
+        assert prop.kind == "string"
+
+    def test_property_from_dict_kind_takes_precedence_over_type(self):
+        """Test that 'kind' takes precedence when both 'type' and 'kind' are present."""
+        data = {
+            "name": "test_prop",
+            "type": "integer",
+            "kind": "string",
+        }
+        prop = Property.from_dict(data)
+        assert prop.kind == "string"
+
+    def test_property_from_dict_type_dispatches_to_array(self):
+        """Test that 'type: array' correctly dispatches to ArrayProperty."""
+        data = {
+            "name": "test_array",
+            "type": "array",
+            "items": {"type": "string"},
+        }
+        prop = Property.from_dict(data)
+        assert isinstance(prop, ArrayProperty)
+        assert prop.kind == "array"
+
+    def test_property_from_dict_type_dispatches_to_object(self):
+        """Test that 'type: object' correctly dispatches to ObjectProperty."""
+        data = {
+            "name": "test_object",
+            "type": "object",
+            "properties": {"field": {"type": "string"}},
+        }
+        prop = Property.from_dict(data)
+        assert isinstance(prop, ObjectProperty)
+        assert prop.kind == "object"
+
 
 class TestArrayProperty:
     """Tests for ArrayProperty class."""
@@ -230,6 +274,24 @@ def test_property_schema_with_dict_properties(self):
         assert age_prop.kind == "integer"
         assert age_prop.required is True
 
+    def test_property_schema_with_type_field_produces_correct_json_schema(self):
+        """Test that PropertySchema with 'type' fields (YAML spec format) produces valid JSON schema."""
+        data = {
+            "properties": {
+                "language": {"type": "string", "required": True, "description": "The language."},
+                "answer": {"type": "string", "required": True, "description": "The answer."},
+            },
+        }
+        schema = PropertySchema.from_dict(data)
+        assert len(schema.properties) == 2
+
+        lang_prop = next(p for p in schema.properties if p.name == "language")
+        assert lang_prop.kind == "string"
+
+        json_schema = schema.to_json_schema()
+        assert json_schema["properties"]["language"]["type"] == "string"
+        assert json_schema["properties"]["answer"]["type"] == "string"
+
 
 class TestConnection:
     """Tests for Connection base class."""

From c594058319be2df425e9853738a263319cfd6480 Mon Sep 17 00:00:00 2001
From: Dmytro Struk <13853051+dmytrostruk@users.noreply.github.com>
Date: Wed, 18 Feb 2026 12:59:58 -0800
Subject: [PATCH 2/6] Fixed required property handling

---
 .../declarative/agent_framework_declarative/_models.py | 10 ++++++++++
 .../declarative/tests/test_declarative_models.py       |  7 ++++++-
 .../samples/02-agents/declarative/get_weather_agent.py |  3 +++
 3 files changed, 19 insertions(+), 1 deletion(-)

diff --git a/python/packages/declarative/agent_framework_declarative/_models.py b/python/packages/declarative/agent_framework_declarative/_models.py
index 8ccd8aa691..1a95edf8f9 100644
--- a/python/packages/declarative/agent_framework_declarative/_models.py
+++ b/python/packages/declarative/agent_framework_declarative/_models.py
@@ -228,11 +228,21 @@ def to_json_schema(self) -> dict[str, Any]:
         """Get a schema out of this PropertySchema to create pydantic models."""
         json_schema = self.to_dict(exclude={"type"}, exclude_none=True)
         new_props = {}
+        required_fields: list[str] = []
         for prop in json_schema.get("properties", []):
             prop_name = prop.pop("name")
             prop["type"] = prop.pop("kind", None)
+            # Convert property-level 'required' boolean to a top-level 'required' array
+            if prop.pop("required", False):
+                required_fields.append(prop_name)
+            # Remove empty enum arrays
+            if not prop.get("enum"):
+                prop.pop("enum", None)
             new_props[prop_name] = prop
+        json_schema["type"] = "object"
         json_schema["properties"] = new_props
+        if required_fields:
+            json_schema["required"] = required_fields
         return json_schema
 
 
diff --git a/python/packages/declarative/tests/test_declarative_models.py b/python/packages/declarative/tests/test_declarative_models.py
index 3ac3e05d86..8768b5b01c 100644
--- a/python/packages/declarative/tests/test_declarative_models.py
+++ b/python/packages/declarative/tests/test_declarative_models.py
@@ -279,7 +279,7 @@ def test_property_schema_with_type_field_produces_correct_json_schema(self):
         data = {
             "properties": {
                 "language": {"type": "string", "required": True, "description": "The language."},
-                "answer": {"type": "string", "required": True, "description": "The answer."},
+                "answer": {"type": "string", "required": False, "description": "The answer."},
             },
         }
         schema = PropertySchema.from_dict(data)
@@ -289,8 +289,13 @@ def test_property_schema_with_type_field_produces_correct_json_schema(self):
         assert lang_prop.kind == "string"
 
         json_schema = schema.to_json_schema()
+        assert json_schema["type"] == "object"
         assert json_schema["properties"]["language"]["type"] == "string"
         assert json_schema["properties"]["answer"]["type"] == "string"
+        # required is a top-level array, not a per-property boolean
+        assert json_schema["required"] == ["language"]
+        assert "required" not in json_schema["properties"]["language"]
+        assert "required" not in json_schema["properties"]["answer"]
 
 
 class TestConnection:
diff --git a/python/samples/02-agents/declarative/get_weather_agent.py b/python/samples/02-agents/declarative/get_weather_agent.py
index af44382c00..49995851fc 100644
--- a/python/samples/02-agents/declarative/get_weather_agent.py
+++ b/python/samples/02-agents/declarative/get_weather_agent.py
@@ -7,6 +7,9 @@
 from agent_framework.azure import AzureOpenAIResponsesClient
 from agent_framework.declarative import AgentFactory
 from azure.identity import AzureCliCredential
+from dotenv import load_dotenv
+
+load_dotenv()
 
 
 def get_weather(location: str, unit: Literal["celsius", "fahrenheit"] = "celsius") -> str:

From 7cd65866bb99b814b13219a4ae14e33e1e22221c Mon Sep 17 00:00:00 2001
From: Dmytro Struk <13853051+dmytrostruk@users.noreply.github.com>
Date: Wed, 18 Feb 2026 13:21:24 -0800
Subject: [PATCH 3/6] Updated inline yaml sample

---
 python/samples/02-agents/declarative/inline_yaml.py | 6 +++++-
 1 file changed, 5 insertions(+), 1 deletion(-)

diff --git a/python/samples/02-agents/declarative/inline_yaml.py b/python/samples/02-agents/declarative/inline_yaml.py
index 7c2bfa6dbf..e7eb5a996f 100644
--- a/python/samples/02-agents/declarative/inline_yaml.py
+++ b/python/samples/02-agents/declarative/inline_yaml.py
@@ -1,6 +1,10 @@
 # Copyright (c) Microsoft. All rights reserved.
 import asyncio
 
+from dotenv import load_dotenv
+
+load_dotenv()
+
 from agent_framework.declarative import AgentFactory
 from azure.identity.aio import AzureCliCredential
 
@@ -34,7 +38,7 @@ async def main():
     # create the agent from the yaml
     async with (
         AzureCliCredential() as credential,
-        AgentFactory(client_kwargs={"credential": credential}).create_agent_from_yaml(yaml_definition) as agent,
+        AgentFactory(client_kwargs={"credential": credential}, safe_mode=False).create_agent_from_yaml(yaml_definition) as agent,
     ):
         response = await agent.run("What can you do for me?")
         print("Agent response:", response.text)

From 5c41a4e8314bfc699a67ef021e8d18daf1cbb965 Mon Sep 17 00:00:00 2001
From: Dmytro Struk <13853051+dmytrostruk@users.noreply.github.com>
Date: Wed, 18 Feb 2026 13:35:42 -0800
Subject: [PATCH 4/6] Fixed remaining declarative samples

---
 python/samples/02-agents/declarative/mcp_tool_yaml.py       | 4 ++--
 .../samples/02-agents/declarative/microsoft_learn_agent.py  | 6 +++++-
 .../samples/02-agents/declarative/openai_responses_agent.py | 6 +++++-
 3 files changed, 12 insertions(+), 4 deletions(-)

diff --git a/python/samples/02-agents/declarative/mcp_tool_yaml.py b/python/samples/02-agents/declarative/mcp_tool_yaml.py
index 43d42fcbd6..eecf6f7a74 100644
--- a/python/samples/02-agents/declarative/mcp_tool_yaml.py
+++ b/python/samples/02-agents/declarative/mcp_tool_yaml.py
@@ -25,12 +25,12 @@
 
 import asyncio
 
-from agent_framework.declarative import AgentFactory
 from dotenv import load_dotenv
 
-# Load environment variables
 load_dotenv()
 
+from agent_framework.declarative import AgentFactory
+
 # Example 1: OpenAI.Responses with API key authentication
 # Uses inline API key - suitable for OpenAI provider which supports headers
 YAML_OPENAI_WITH_API_KEY = """
diff --git a/python/samples/02-agents/declarative/microsoft_learn_agent.py b/python/samples/02-agents/declarative/microsoft_learn_agent.py
index 7a346096ea..66715924b7 100644
--- a/python/samples/02-agents/declarative/microsoft_learn_agent.py
+++ b/python/samples/02-agents/declarative/microsoft_learn_agent.py
@@ -2,6 +2,10 @@
 import asyncio
 from pathlib import Path
 
+from dotenv import load_dotenv
+
+load_dotenv()
+
 from agent_framework.declarative import AgentFactory
 from azure.identity.aio import AzureCliCredential
 
@@ -15,7 +19,7 @@ async def main():
     # create the agent from the yaml
     async with (
         AzureCliCredential() as credential,
-        AgentFactory(client_kwargs={"credential": credential}).create_agent_from_yaml_path(yaml_path) as agent,
+        AgentFactory(client_kwargs={"credential": credential}, safe_mode=False).create_agent_from_yaml_path(yaml_path) as agent,
     ):
         response = await agent.run("How do I create a storage account with private endpoint using bicep?")
         print("Agent response:", response.text)
diff --git a/python/samples/02-agents/declarative/openai_responses_agent.py b/python/samples/02-agents/declarative/openai_responses_agent.py
index 2931168587..d73dc34446 100644
--- a/python/samples/02-agents/declarative/openai_responses_agent.py
+++ b/python/samples/02-agents/declarative/openai_responses_agent.py
@@ -2,6 +2,10 @@
 import asyncio
 from pathlib import Path
 
+from dotenv import load_dotenv
+
+load_dotenv()
+
 from agent_framework.declarative import AgentFactory
 
 
@@ -16,7 +20,7 @@ async def main():
         yaml_str = f.read()
 
     # create the agent from the yaml
-    agent = AgentFactory().create_agent_from_yaml(yaml_str)
+    agent = AgentFactory(safe_mode=False).create_agent_from_yaml(yaml_str)
     # use the agent
     response = await agent.run("Why is the sky blue, answer in Dutch?")
     # Use response.value with try/except for safe parsing

From 358e1b212e26674dcaf8ddc5ad8c065ea4dced33 Mon Sep 17 00:00:00 2001
From: Dmytro Struk <13853051+dmytrostruk@users.noreply.github.com>
Date: Wed, 18 Feb 2026 13:46:46 -0800
Subject: [PATCH 5/6] Added lazy initialization for PowerFx engine

---
 .../agent_framework_declarative/_models.py    | 29 ++++++++++++++-----
 .../02-agents/declarative/inline_yaml.py      |  5 ++--
 .../02-agents/declarative/mcp_tool_yaml.py    |  3 +-
 .../declarative/microsoft_learn_agent.py      |  5 ++--
 .../declarative/openai_responses_agent.py     |  3 +-
 5 files changed, 27 insertions(+), 18 deletions(-)

diff --git a/python/packages/declarative/agent_framework_declarative/_models.py b/python/packages/declarative/agent_framework_declarative/_models.py
index 1a95edf8f9..6aa359d7f7 100644
--- a/python/packages/declarative/agent_framework_declarative/_models.py
+++ b/python/packages/declarative/agent_framework_declarative/_models.py
@@ -5,20 +5,32 @@
 import os
 from collections.abc import MutableMapping
 from contextvars import ContextVar
-from typing import Any, Literal, TypeVar, Union
+from typing import TYPE_CHECKING, Any, Literal, TypeVar, Union, overload
 
 from agent_framework._serialization import SerializationMixin
 
-try:
+if TYPE_CHECKING:
     from powerfx import Engine
 
-    engine: Engine | None = Engine()
-except (ImportError, RuntimeError):
-    # ImportError: powerfx package not installed
-    # RuntimeError: .NET runtime not available or misconfigured
-    engine = None
+_engine_initialized = False
+_engine: Engine | None = None
+
+
+def _get_engine() -> Engine | None:
+    """Lazily initialize the PowerFx engine on first use."""
+    global _engine_initialized, _engine
+    if not _engine_initialized:
+        _engine_initialized = True
+        try:
+            from powerfx import Engine
+
+            _engine = Engine()
+        except (ImportError, RuntimeError):
+            # ImportError: powerfx package not installed
+            # RuntimeError: .NET runtime not available or misconfigured
+            pass
+    return _engine
 
-from typing import overload
 
 logger = logging.getLogger("agent_framework.declarative")
 
@@ -47,6 +59,7 @@ def _try_powerfx_eval(value: str | None, log_value: bool = True) -> str | None:
         return value
     if not value.startswith("="):
         return value
+    engine = _get_engine()
     if engine is None:
         logger.warning(
             "PowerFx engine not available for evaluating values starting with '='. "
diff --git a/python/samples/02-agents/declarative/inline_yaml.py b/python/samples/02-agents/declarative/inline_yaml.py
index e7eb5a996f..2e8561086b 100644
--- a/python/samples/02-agents/declarative/inline_yaml.py
+++ b/python/samples/02-agents/declarative/inline_yaml.py
@@ -1,13 +1,12 @@
 # Copyright (c) Microsoft. All rights reserved.
 import asyncio
 
+from agent_framework.declarative import AgentFactory
+from azure.identity.aio import AzureCliCredential
 from dotenv import load_dotenv
 
 load_dotenv()
 
-from agent_framework.declarative import AgentFactory
-from azure.identity.aio import AzureCliCredential
-
 """
 This sample shows how to create an agent using an inline YAML string rather than a file.
 
diff --git a/python/samples/02-agents/declarative/mcp_tool_yaml.py b/python/samples/02-agents/declarative/mcp_tool_yaml.py
index eecf6f7a74..27128b499a 100644
--- a/python/samples/02-agents/declarative/mcp_tool_yaml.py
+++ b/python/samples/02-agents/declarative/mcp_tool_yaml.py
@@ -25,12 +25,11 @@
 
 import asyncio
 
+from agent_framework.declarative import AgentFactory
 from dotenv import load_dotenv
 
 load_dotenv()
 
-from agent_framework.declarative import AgentFactory
-
 # Example 1: OpenAI.Responses with API key authentication
 # Uses inline API key - suitable for OpenAI provider which supports headers
 YAML_OPENAI_WITH_API_KEY = """
diff --git a/python/samples/02-agents/declarative/microsoft_learn_agent.py b/python/samples/02-agents/declarative/microsoft_learn_agent.py
index 66715924b7..affd1563cb 100644
--- a/python/samples/02-agents/declarative/microsoft_learn_agent.py
+++ b/python/samples/02-agents/declarative/microsoft_learn_agent.py
@@ -2,13 +2,12 @@
 import asyncio
 from pathlib import Path
 
+from agent_framework.declarative import AgentFactory
+from azure.identity.aio import AzureCliCredential
 from dotenv import load_dotenv
 
 load_dotenv()
 
-from agent_framework.declarative import AgentFactory
-from azure.identity.aio import AzureCliCredential
-
 
 async def main():
     """Create an agent from a declarative yaml specification and run it."""
diff --git a/python/samples/02-agents/declarative/openai_responses_agent.py b/python/samples/02-agents/declarative/openai_responses_agent.py
index d73dc34446..3c8c0861fa 100644
--- a/python/samples/02-agents/declarative/openai_responses_agent.py
+++ b/python/samples/02-agents/declarative/openai_responses_agent.py
@@ -2,12 +2,11 @@
 import asyncio
 from pathlib import Path
 
+from agent_framework.declarative import AgentFactory
 from dotenv import load_dotenv
 
 load_dotenv()
 
-from agent_framework.declarative import AgentFactory
-
 
 async def main():
     """Create an agent from a declarative yaml specification and run it."""

From 126a9633eb050a8651d2f9cb982a74c04a3aecb7 Mon Sep 17 00:00:00 2001
From: Dmytro Struk <13853051+dmytrostruk@users.noreply.github.com>
Date: Wed, 18 Feb 2026 13:51:59 -0800
Subject: [PATCH 6/6] Small fix

---
 .../declarative/agent_framework_declarative/_loader.py        | 4 ++--
 1 file changed, 2 insertions(+), 2 deletions(-)

diff --git a/python/packages/declarative/agent_framework_declarative/_loader.py b/python/packages/declarative/agent_framework_declarative/_loader.py
index 38ae550bf2..55817be8ea 100644
--- a/python/packages/declarative/agent_framework_declarative/_loader.py
+++ b/python/packages/declarative/agent_framework_declarative/_loader.py
@@ -452,7 +452,7 @@ def create_agent_from_dict(self, agent_def: dict[str, Any]) -> Agent:
             name=prompt_agent.name,
             description=prompt_agent.description,
             instructions=prompt_agent.instructions,
-            default_options=chat_options,
+            default_options=chat_options,  # type: ignore[arg-type]
         )
 
     async def create_agent_from_yaml_path_async(self, yaml_path: str | Path) -> Agent:
@@ -569,7 +569,7 @@ async def create_agent_from_dict_async(self, agent_def: dict[str, Any]) -> Agent
             name=prompt_agent.name,
             description=prompt_agent.description,
             instructions=prompt_agent.instructions,
-            default_options=chat_options,
+            default_options=chat_options,  # type: ignore[arg-type]
         )
 
     async def _create_agent_with_provider(self, prompt_agent: PromptAgent, mapping: ProviderTypeMapping) -> Agent: