diff --git a/.vscode/launch.json b/.vscode/launch.json
index 647127315..451731d4b 100644
--- a/.vscode/launch.json
+++ b/.vscode/launch.json
@@ -11,7 +11,7 @@
       "mode": "auto",
       "program": "${workspaceFolder}/cmd/publisher/main.go",
       "args": ["ui", "--listen=localhost:9001", "-vv"],
-      "cwd": "${workspaceFolder}"
+      "cwd": "${workspaceFolder}/test/sample-content"
     }
   ]
 }
diff --git a/extensions/vscode/.vscode/launch.json b/extensions/vscode/.vscode/launch.json
index 3e59a6afa..e27741ea6 100644
--- a/extensions/vscode/.vscode/launch.json
+++ b/extensions/vscode/.vscode/launch.json
@@ -11,7 +11,19 @@
       "request": "launch",
       "args": ["--extensionDevelopmentPath=${workspaceFolder}"],
       "outFiles": ["${workspaceFolder}/dist/**/*.js"],
-      "preLaunchTask": "${defaultBuildTask}"
+      "preLaunchTask": "${defaultBuildTask}",
+      "env": { "POSIT_PUBLISHER_USE_EXTERNAL_AGENT": "FALSE" },
+      "cwd": "${workspaceFolder}/../../test/sample-content"
+    },
+    {
+      "name": "Run Extension using external API agent on 9001",
+      "type": "extensionHost",
+      "request": "launch",
+      "args": ["--extensionDevelopmentPath=${workspaceFolder}"],
+      "outFiles": ["${workspaceFolder}/dist/**/*.js"],
+      "preLaunchTask": "${defaultBuildTask}",
+      "env": { "POSIT_PUBLISHER_USE_EXTERNAL_AGENT": "TRUE" },
+      "cwd": "${workspaceFolder}/../../test/sample-content"
     },
     {
       "name": "Extension Tests",
diff --git a/extensions/vscode/CONTRIBUTING.md b/extensions/vscode/CONTRIBUTING.md
index c27174287..779cf6047 100644
--- a/extensions/vscode/CONTRIBUTING.md
+++ b/extensions/vscode/CONTRIBUTING.md
@@ -50,17 +50,46 @@ just test
 
 Utilize VSCode's built-in debugger to troubleshoot and diagnose issues.
 
-Launch the debugger by pressing `F5` or go to `Run > Start Debugging`.
+Switch to the debugger extension view within VSCode and select one of the two
+debug configurations (specified within `extensions/vscode/.vscode/launch.json`):
+
+- `Run Extension`
+- `Run Extension using external API agent on 9001`
+
+The first target (`Run Extension`) is very helpful when you are simply wanting to debug
+functionality within the extension. It's configuration will cause the extension under test to
+automatically launch the agent (unlike the second option).
+
+The second target (`Run Extension using external API agent on 9001`) is helpful for when you want to debug
+both the extension UX and the agent at the same time. To do this, you will need to:
+
+1. First launch a debug session from a VSCode window which has opened the repo's base directory
+   (see [API Debugging](./../../CONTRIBUTING.md#debugging-in-vs-code))
+2. Then launch another debug session (using the `Run Extension using external API agent on 9001` configuration)
+   from a separate VSCode window which has opened the `extensions/vscode` folder.
+
+Notes when using `Run Extension using external API agent on 9001`:
+
+- Both the agent's and extension's `launch.json` files are setup using the same working
+  subdirectory of `test/sample-content`. If you change it in one, you will need to change it in the other.
+  (This mimics the production runtime functionality where they both are initialized with the same working
+  subdirectory.) This location must also be different than the root of the repository (which the VSCode
+  window for agent development must open) and the extension location `extensions/vscode` (which the VSCode
+  window for UX development must open).
+- If you stop the debugging of the agent, you'll need to relaunch debugging of the extension after
+  the agent is back up.
+
+If you use `F5` or use the menu option `Run > Start Debugging` to launch the debugger,
+be sure to pre-select the configuration.
 
 Either invocation will launch a new window named `Extension Host Development` with the extension installed and enabled.
 
 When testing, utilize the sample projects in `../../test/sample-content`. Open these projects as a workspace within the `Extension Host Development` window.
 
-#### Connecting to API Debug Session
-
-To connect to the API debug session change the `Service` class in
-`extensions/vscode/src/services.ts` to a hardcoded `port = 9001;` and remove
-the code inside of the `start` and `stop` methods.
+Debugging the home view is done with browser development tools. Activate the publisher extension within the
+extension under test, and then use the palette command `Developer:Open Webview Developer Tools` to
+launch the browser debugging window. Note: This command will appear to do nothing if there is no webview
+visible within the extension at the time, so be sure to switch to the publisher extension view before issuing the command.
 
 ### Re-building the Webview(s)
 
diff --git a/extensions/vscode/src/extension.ts b/extensions/vscode/src/extension.ts
index 1f4de70e4..412d444a7 100644
--- a/extensions/vscode/src/extension.ts
+++ b/extensions/vscode/src/extension.ts
@@ -1,6 +1,12 @@
 // Copyright (C) 2024 by Posit Software, PBC.
 
-import { ExtensionContext, Uri, commands, workspace } from "vscode";
+import {
+  ExtensionContext,
+  ExtensionMode,
+  Uri,
+  commands,
+  workspace,
+} from "vscode";
 
 import * as ports from "src/ports";
 import { Service } from "src/services";
@@ -43,11 +49,24 @@ export async function activate(context: ExtensionContext) {
   setStateContext(PositPublishState.uninitialized);
   setInitializationInProgressContext(InitializationInProgress.false);
 
-  const port = await ports.acquire();
+  const useExternalAgent =
+    context.extensionMode === ExtensionMode.Development &&
+    process.env.POSIT_PUBLISHER_USE_EXTERNAL_AGENT === "TRUE";
+  console.log(
+    "Starting Context in extension mode: %s, with useExternalAgent set to %s",
+    context.extensionMode,
+    useExternalAgent,
+  );
+
+  let port = 9001;
+  if (!useExternalAgent) {
+    port = await ports.acquire();
+  }
+
   const stream = new EventStream(port);
   context.subscriptions.push(stream);
 
-  service = new Service(context, port);
+  service = new Service(context, port, useExternalAgent);
   service.start();
 
   const watchers = new WatcherManager();
diff --git a/extensions/vscode/src/services.ts b/extensions/vscode/src/services.ts
index 14ed1c992..2942a0140 100644
--- a/extensions/vscode/src/services.ts
+++ b/extensions/vscode/src/services.ts
@@ -10,16 +10,25 @@ export class Service implements Disposable {
   private context: ExtensionContext;
   private server: Server;
   private agentURL: string;
+  private useExternalAgent: boolean;
 
-  constructor(context: ExtensionContext, port: number) {
+  constructor(
+    context: ExtensionContext,
+    port: number,
+    useExternalAgent: boolean,
+  ) {
     this.context = context;
+    this.useExternalAgent = useExternalAgent;
+
     this.agentURL = `http://${HOST}:${port}/api`;
     this.server = new Server(port);
     initApi(this.isUp(), this.agentURL);
   }
 
   start = async () => {
-    await this.server.start(this.context);
+    if (!this.useExternalAgent) {
+      await this.server.start(this.context);
+    }
   };
 
   isUp = () => {
@@ -27,8 +36,10 @@ export class Service implements Disposable {
   };
 
   stop = async () => {
-    await this.server.stop();
-    this.server.dispose();
+    if (!this.useExternalAgent) {
+      await this.server.stop();
+      this.server.dispose();
+    }
   };
 
   dispose() {