diff --git a/shell/agents/Microsoft.Azure.Agent/AzureAgent.cs b/shell/agents/Microsoft.Azure.Agent/AzureAgent.cs
index e88a4150..132cfc54 100644
--- a/shell/agents/Microsoft.Azure.Agent/AzureAgent.cs
+++ b/shell/agents/Microsoft.Azure.Agent/AzureAgent.cs
@@ -17,7 +17,7 @@ public sealed class AzureAgent : ILLMAgent
 
     internal ArgumentPlaceholder ArgPlaceholder { set; get; }
 
-    private const string SettingFileName = "az.agent.json";
+    private const string SettingFileName = "az.config.json";
     private const string LoggingFileName = "log..txt";
     private const string InstructionPrompt = """
         NOTE: follow the below instructions when generating responses that include Azure CLI commands with placeholders:
@@ -37,6 +37,7 @@ 7. DO NOT include the placeholder summary when the commands contains no placehol
 
     private int _turnsLeft;
     private CopilotResponse _copilotResponse;
+    private AgentSetting _setting;
 
     private readonly string _instructions;
     private readonly StringBuilder _buffer;
@@ -84,17 +85,30 @@ public void Dispose()
 
     public void Initialize(AgentConfig config)
     {
-        _turnsLeft = int.MaxValue;
         SettingFile = Path.Combine(config.ConfigurationRoot, SettingFileName);
 
-        string logFile = Path.Combine(config.ConfigurationRoot, LoggingFileName);
-        Log.Logger = new LoggerConfiguration()
-            .WriteTo.Async(a => a.File(
-                path: logFile,
-                outputTemplate: "{Timestamp:HH:mm:ss} [{Level:u3}] {Message:lj}{NewLine}{Exception}",
-                rollingInterval: RollingInterval.Day))
-            .CreateLogger();
-        Log.Information("Azure agent initialized.");
+        _turnsLeft = int.MaxValue;
+        _setting = AgentSetting.LoadFromFile(SettingFile);
+
+        if (_setting is null)
+        {
+            // Use default setting and create a setting file with the default settings.
+            _setting = AgentSetting.Default;
+            AgentSetting.NewSettingFile(SettingFile);
+        }
+
+        if (_setting.Logging)
+        {
+            string logFile = Path.Combine(config.ConfigurationRoot, LoggingFileName);
+            Log.Logger = new LoggerConfiguration()
+                .MinimumLevel.Debug()
+                .WriteTo.Async(a => a.File(
+                    path: logFile,
+                    outputTemplate: "{Timestamp:HH:mm:ss} [{Level:u3}] {Message:lj}{NewLine}{Exception}",
+                    rollingInterval: RollingInterval.Day))
+                .CreateLogger();
+            Log.Information("Azure agent initialized.");
+        }
     }
 
     public IEnumerable<CommandBase> GetCommands() => [new ReplaceCommand(this)];
diff --git a/shell/agents/Microsoft.Azure.Agent/AzureCopilotReceiver.cs b/shell/agents/Microsoft.Azure.Agent/AzureCopilotReceiver.cs
index 80f02669..6313c295 100644
--- a/shell/agents/Microsoft.Azure.Agent/AzureCopilotReceiver.cs
+++ b/shell/agents/Microsoft.Azure.Agent/AzureCopilotReceiver.cs
@@ -43,6 +43,8 @@ internal static async Task<AzureCopilotReceiver> CreateAsync(string streamUrl)
 
     private async Task ProcessActivities()
     {
+        Log.Debug("[AzureCopilotReceiver] Receiver is up and running.");
+
         while (_webSocket.State is WebSocketState.Open)
         {
             string closingMessage = null;
@@ -55,18 +57,18 @@ private async Task ProcessActivities()
                 {
                     closingMessage = "Close message received";
                     _activityQueue.Add(new CopilotActivity { Error = new ConnectionDroppedException("The server websocket is closing. Connection dropped.") });
+                    Log.Information("[AzureCopilotReceiver] Web socket closed by server.");
                 }
             }
             catch (OperationCanceledException)
             {
                 // Close the web socket before the thread is going away.
                 closingMessage = "Client closing";
-                Log.Error("[AzureCopilotReceiver] Receiver thread cancelled, which means the instance was disposed.");
+                Log.Information("[AzureCopilotReceiver] Receiver was cancelled and disposed.");
             }
 
             if (closingMessage is not null)
             {
-                Log.Error("[AzureCopilotReceiver] Sending web socket closing request, message: '{0}'", closingMessage);
                 await _webSocket.CloseAsync(WebSocketCloseStatus.NormalClosure, closingMessage, CancellationToken.None);
                 _activityQueue.CompleteAdding();
                 break;
diff --git a/shell/agents/Microsoft.Azure.Agent/ChatSession.cs b/shell/agents/Microsoft.Azure.Agent/ChatSession.cs
index b9d54dd0..1fa37442 100644
--- a/shell/agents/Microsoft.Azure.Agent/ChatSession.cs
+++ b/shell/agents/Microsoft.Azure.Agent/ChatSession.cs
@@ -5,6 +5,7 @@
 using System.Text.Json.Nodes;
 
 using AIShell.Abstraction;
+using Serilog;
 
 namespace Microsoft.Azure.Agent;
 
@@ -145,6 +146,8 @@ private async Task StartConversationAsync(IHost host, CancellationToken cancella
         _expireOn = DateTime.UtcNow.AddSeconds(spl.ExpiresIn);
         _copilotReceiver = await AzureCopilotReceiver.CreateAsync(_streamUrl);
 
+        Log.Debug("[ChatSession] Conversation started. Id: {0}", _conversationId);
+
         while (true)
         {
             CopilotActivity activity = _copilotReceiver.Take(cancellationToken);
diff --git a/shell/agents/Microsoft.Azure.Agent/DataRetriever.cs b/shell/agents/Microsoft.Azure.Agent/DataRetriever.cs
index e4d8092c..5674f422 100644
--- a/shell/agents/Microsoft.Azure.Agent/DataRetriever.cs
+++ b/shell/agents/Microsoft.Azure.Agent/DataRetriever.cs
@@ -433,6 +433,7 @@ private ArgumentInfo CreateArgInfo(ArgumentPair pair)
         // Handle non-AzCLI command.
         if (pair.Parameter is null)
         {
+            Log.Debug("[DataRetriever] Non-AzCLI command: '{0}'", pair.Command);
             return new ArgumentInfo(item.Name, item.Desc, dataType);
         }
 
@@ -481,6 +482,8 @@ private List<string> GetArgValues(ArgumentPair pair)
         string commandLine = $"{pair.Command} {pair.Parameter} ";
         string tempFile = Path.GetTempFileName();
 
+        Log.Debug("[DataRetriever] Perform tab completion for '{0}'", commandLine);
+
         try
         {
             using var process = new Process()
diff --git a/shell/agents/Microsoft.Azure.Agent/Schema.cs b/shell/agents/Microsoft.Azure.Agent/Schema.cs
index e07ee904..6e60ec67 100644
--- a/shell/agents/Microsoft.Azure.Agent/Schema.cs
+++ b/shell/agents/Microsoft.Azure.Agent/Schema.cs
@@ -1,3 +1,4 @@
+using System.Text;
 using System.Text.Json;
 using System.Text.Json.Nodes;
 using System.Text.Json.Serialization;
@@ -5,6 +6,51 @@
 
 namespace Microsoft.Azure.Agent;
 
+internal class AgentSetting
+{
+    public bool Logging { get; set; }
+    public bool Telemetry { get; set; }
+
+    public AgentSetting()
+    {
+        // Enable logging and telemetry by default.
+        Logging = true;
+        Telemetry = true;
+    }
+
+    internal static AgentSetting Default => new();
+
+    internal static AgentSetting LoadFromFile(string path)
+    {
+        FileInfo file = new(path);
+        if (file.Exists)
+        {
+            try
+            {
+                using var stream = file.OpenRead();
+                return JsonSerializer.Deserialize<AgentSetting>(stream, Utils.JsonOptions);
+            }
+            catch (Exception e)
+            {
+                throw new InvalidDataException($"Parsing settings from '{path}' failed with the following error: {e.Message}", e);
+            }
+        }
+
+        return null;
+    }
+
+    internal static void NewSettingFile(string path)
+    {
+        const string content = """
+            {
+              "logging": true,
+              "telemetry": true
+            }
+            """;
+        File.WriteAllText(path, content, Encoding.UTF8);
+    }
+}
+
 internal class TokenPayload
 {
     public string ConversationId { get; set; }