The software release also included four interactive characters as well as a utility that enables developers to assemble their own characters and interactions. Microsoft Agent was subsequently created by Tandy Trower in an attempt to offer technology that was more flexible and available to third-party developers to include in their applications and web pages. Interactive character technology was first introduced in Microsoft Bob, which used an early version of Agent technology internally referred to as 'Microsoft Actor.' It was the code used in initial version of the Office Assistant in Office 97. The theory behind this software came from work on social interfaces by Clifford Nass and Byron Reeves at Stanford's Center for the Study of Language and Information.

Microsoft Agent functionality was exposed as an ActiveX control that can be used by web pages. It was completely discontinued in Windows 8. It was not included with Windows 7 but can be downloaded from Microsoft. It came preinstalled as part of Windows 98 through Windows Vista.

Thus it was an example of an embodied agent. Microsoft Agent was a technology developed by Microsoft which employed animated characters, text-to-speech engines, and speech recognition software to enhance interaction with computer users.