Creating an AI Teammate agent instance in Teams fails with HTTP 500 at the final activation step, on a completely clean blueprint.

[rafsan-huseynov]

What I'm trying to do

I'm building an AI Teammate agent ("a governance assistant") to demo at an upcoming conference session on agent governance with Agent 365. The goal is a working end-to-end story: an agent registered as a first-class identity, deployed to the cloud, observable, and reachable in Teams — so I can show the full governance lifecycle live.

I've gotten everything working except the very last step: activating the agent instance in Teams consistently fails with HTTP 500.

Environment

• Frontier-enrolled tenant
• Agent 365 standalone license
• AI Teammate agent (a365 setup all --aiteammate --m365)
• CLI version: 1.1.199
• Agent code hosted on Azure Container Apps, confirmed running and healthy

Steps to reproduce

1. Clean up all old blueprints (a365 cleanup) and purge soft-deleted ones via Graph
2. a365 setup all --aiteammate --m365 --agent-name "<name>" — completes successfully
3. Confirm managerApplications is set on the blueprint
4. Register messaging endpoint via a365 setup blueprint --endpoint-only
5. a365 publish, then upload manifest to admin center (succeeds)
6. All 4 wizard steps complete (Select users, Apply template, Accept permissions, Review & finish)
7. Final activation fails: "We couldn't activate your agent. Request failed with status 500"

Expected behavior

Agent instance activates and the AI Teammate is provisioned.

Actual behavior

HTTP 500 at activation. Reproduced on two separate clean blueprints with identical results.

Verified NOT the cause

• Single blueprint, no duplicates (soft-deleted ones purged)
• managerApplications is set on the blueprint
• All API permissions consented (Graph, Agent 365 Tools MCP, Bot API, Observability, Power Platform)
• S2S app roles granted
• Agent running and healthy in hosting (/api/health returns ok)
• Messaging endpoint registered successfully
• Manifest uploaded successfully
• Tenant is Frontier-enrolled

I'd appreciate if you could help me fix this.

[ajmfehr]

@rafsan-huseynov , a fix for activation failures has been rolled out. Can you please try activation again and let me know if it doesn't resolve your issue?

[rafsan-huseynov]

Hi @ajmfehr - I was able upload the manifest. Thanks.