diff --git a/src/@types/vscode.proposed.chatParticipantAdditions.d.ts b/src/@types/vscode.proposed.chatParticipantAdditions.d.ts
index 71520fa1ec..aa7001a3d2 100644
--- a/src/@types/vscode.proposed.chatParticipantAdditions.d.ts
+++ b/src/@types/vscode.proposed.chatParticipantAdditions.d.ts
@@ -105,6 +105,7 @@ declare module 'vscode' {
 		isComplete?: boolean;
 		toolSpecificData?: ChatTerminalToolInvocationData;
 		fromSubAgent?: boolean;
+		presentation?: 'hidden' | 'hiddenAfterComplete' | undefined;
 
 		constructor(toolName: string, toolCallId: string, isError?: boolean);
 	}
diff --git a/src/@types/vscode.proposed.chatSessionsProvider.d.ts b/src/@types/vscode.proposed.chatSessionsProvider.d.ts
index bd4e624430..772fc387b9 100644
--- a/src/@types/vscode.proposed.chatSessionsProvider.d.ts
+++ b/src/@types/vscode.proposed.chatSessionsProvider.d.ts
@@ -95,6 +95,11 @@ declare module 'vscode' {
 		 */
 		description?: string | MarkdownString;
 
+		/**
+		 * An optional badge that provides additional context about the chat session.
+		 */
+		badge?: string | MarkdownString;
+
 		/**
 		 * An optional status indicating the current state of the session.
 		 */
diff --git a/src/github/createPRViewProvider.ts b/src/github/createPRViewProvider.ts
index 40763443bb..15665e7a7b 100644
--- a/src/github/createPRViewProvider.ts
+++ b/src/github/createPRViewProvider.ts
@@ -753,6 +753,19 @@ export class CreatePullRequestViewProvider extends BaseCreatePullRequestViewProv
 			// Ignore and fall back to commit message
 			Logger.debug(`Error while getting total commits: ${e}`, CreatePullRequestViewProvider.ID);
 		}
+
+		// Apply variable substitution to title and description
+		const activeIssue = this._folderRepositoryManager.activeIssue;
+		let currentUser: string | undefined;
+		try {
+			currentUser = activeIssue ? (await this._folderRepositoryManager.getCurrentUser(activeIssue.githubRepository)).login : undefined;
+		} catch (e) {
+			Logger.debug(`Failed to get current user for variable substitution: ${e}`, CreatePullRequestViewProvider.ID);
+			currentUser = undefined;
+		}
+		title = variableSubstitution(title, activeIssue, this._pullRequestDefaults, currentUser);
+		description = variableSubstitution(description, activeIssue, this._pullRequestDefaults, currentUser);
+
 		return { title, description };
 	}
 
diff --git a/src/test/github/utils.test.ts b/src/test/github/utils.test.ts
index 94683fcf85..3e5f53eaf1 100644
--- a/src/test/github/utils.test.ts
+++ b/src/test/github/utils.test.ts
@@ -4,7 +4,9 @@
  *--------------------------------------------------------------------------------------------*/
 
 import { default as assert } from 'assert';
-import { getPRFetchQuery, sanitizeIssueTitle } from '../../github/utils';
+import { getPRFetchQuery, sanitizeIssueTitle, variableSubstitution } from '../../github/utils';
+import { IssueModel } from '../../github/issueModel';
+import { PullRequestDefaults } from '../../github/folderRepositoryManager';
 
 describe('utils', () => {
 
@@ -41,4 +43,87 @@ describe('utils', () => {
 			});
 		});
 	});
+
+	describe('variableSubstitution', () => {
+		const defaults: PullRequestDefaults = {
+			owner: 'testOwner',
+			repo: 'testRepo',
+			base: 'main'
+		};
+
+		it('replaces ${issueNumber} with issue number', () => {
+			const issueModel = {
+				number: 123,
+				title: 'Test Issue',
+				remote: { owner: 'testOwner', repositoryName: 'testRepo' }
+			} as unknown as IssueModel;
+			const result = variableSubstitution('Closes ${issueNumber}', issueModel, defaults, 'testUser');
+			assert.strictEqual(result, 'Closes 123');
+		});
+
+		it('replaces ${issueNumberLabel} with #number for same repo', () => {
+			const issueModel = {
+				number: 456,
+				title: 'Test Issue',
+				remote: { owner: 'testOwner', repositoryName: 'testRepo' }
+			} as unknown as IssueModel;
+			const result = variableSubstitution('Fixes ${issueNumberLabel}', issueModel, defaults, 'testUser');
+			assert.strictEqual(result, 'Fixes #456');
+		});
+
+		it('replaces ${issueNumberLabel} with owner/repo#number for different repo', () => {
+			const issueModel = {
+				number: 789,
+				title: 'Test Issue',
+				remote: { owner: 'otherOwner', repositoryName: 'otherRepo' }
+			} as unknown as IssueModel;
+			const result = variableSubstitution('Resolves ${issueNumberLabel}', issueModel, defaults, 'testUser');
+			assert.strictEqual(result, 'Resolves otherOwner/otherRepo#789');
+		});
+
+		it('replaces ${issueTitle} with issue title', () => {
+			const issueModel = {
+				number: 123,
+				title: 'Fix bug in parser',
+				remote: { owner: 'testOwner', repositoryName: 'testRepo' }
+			} as unknown as IssueModel;
+			const result = variableSubstitution('Working on: ${issueTitle}', issueModel, defaults, 'testUser');
+			assert.strictEqual(result, 'Working on: Fix bug in parser');
+		});
+
+		it('replaces ${user} with username', () => {
+			const result = variableSubstitution('Assigned to ${user}', undefined, defaults, 'johnDoe');
+			assert.strictEqual(result, 'Assigned to johnDoe');
+		});
+
+		it('replaces ${repository} with repo name', () => {
+			const result = variableSubstitution('From ${repository}', undefined, defaults, 'testUser');
+			assert.strictEqual(result, 'From testRepo');
+		});
+
+		it('replaces ${owner} with owner name', () => {
+			const result = variableSubstitution('By ${owner}', undefined, defaults, 'testUser');
+			assert.strictEqual(result, 'By testOwner');
+		});
+
+		it('replaces multiple variables in one string', () => {
+			const issueModel = {
+				number: 123,
+				title: 'Test Issue',
+				remote: { owner: 'testOwner', repositoryName: 'testRepo' }
+			} as unknown as IssueModel;
+			const result = variableSubstitution('Closes ${issueNumberLabel}: ${issueTitle}', issueModel, defaults, 'testUser');
+			assert.strictEqual(result, 'Closes #123: Test Issue');
+		});
+
+		it('leaves variable unchanged if issue is not provided', () => {
+			const result = variableSubstitution('Closes ${issueNumberLabel}', undefined, defaults, 'testUser');
+			assert.strictEqual(result, 'Closes ${issueNumberLabel}');
+		});
+
+		it('handles empty string', () => {
+			const result = variableSubstitution('', undefined, defaults, 'testUser');
+			assert.strictEqual(result, '');
+		});
+	});
 });
\ No newline at end of file