diff --git a/src/vs/workbench/api/common/extHostTypeConverters.ts b/src/vs/workbench/api/common/extHostTypeConverters.ts
index 9a7ee3f639f..9a303f6681c 100644
--- a/src/vs/workbench/api/common/extHostTypeConverters.ts
+++ b/src/vs/workbench/api/common/extHostTypeConverters.ts
@@ -2439,15 +2439,38 @@ export namespace ChatResponseCommandButtonPart {
 
 export namespace ChatResponseReferencePart {
 	export function to(part: vscode.ChatResponseReferencePart): Dto<IChatContentReference> {
+		if ('variableName' in part.value) {
+			return {
+				kind: 'reference',
+				reference: {
+					variableName: part.value.variableName,
+					value: URI.isUri(part.value.value) ?
+						part.value.value :
+						Location.from(<vscode.Location>part.value.value)
+				}
+			};
+		}
+
 		return {
 			kind: 'reference',
-			reference: !URI.isUri(part.value) ? Location.from(<vscode.Location>part.value) : part.value
+			reference: URI.isUri(part.value) ?
+				part.value :
+				Location.from(<vscode.Location>part.value)
 		};
 	}
 	export function from(part: Dto<IChatContentReference>): vscode.ChatResponseReferencePart {
 		const value = revive<IChatContentReference>(part);
+
+		const mapValue = (value: URI | languages.Location): vscode.Uri | vscode.Location => URI.isUri(value) ?
+			value :
+			Location.to(value);
+
 		return new types.ChatResponseReferencePart(
-			URI.isUri(value.reference) ? value.reference : Location.to(value.reference)
+			'variableName' in value.reference ? {
+				variableName: value.reference.variableName,
+				value: value.reference.value && mapValue(value.reference.value)
+			} :
+				mapValue(value.reference)
 		);
 	}
 }
@@ -2556,36 +2579,6 @@ export namespace ChatResponseProgress {
 		}
 	}
 
-	export function to(progress: extHostProtocol.IChatProgressDto): vscode.ChatProgress | undefined {
-		switch (progress.kind) {
-			case 'markdownContent':
-			case 'inlineReference':
-			case 'treeData':
-				return ChatResponseProgress.to(progress);
-			case 'content':
-				return { content: progress.content };
-			case 'usedContext':
-				return { documents: progress.documents.map(d => ({ uri: URI.revive(d.uri), version: d.version, ranges: d.ranges.map(r => Range.to(r)) })) };
-			case 'reference':
-				return {
-					reference:
-						isUriComponents(progress.reference) ?
-							URI.revive(progress.reference) :
-							Location.to(progress.reference)
-				};
-			case 'agentDetection':
-				// For simplicity, don't sent back the 'extended' types
-				return undefined;
-			case 'progressMessage':
-				return { message: progress.content.value };
-			case 'vulnerability':
-				return { content: progress.content, vulnerabilities: progress.vulnerabilities };
-			default:
-				// Unknown type, eg something in history that was removed? Ignore
-				return undefined;
-		}
-	}
-
 	export function toProgressContent(progress: extHostProtocol.IChatContentProgressDto, commandsConverter: Command.ICommandsConverter): vscode.ChatContentProgress | undefined {
 		switch (progress.kind) {
 			case 'markdownContent':
diff --git a/src/vs/workbench/api/common/extHostTypes.ts b/src/vs/workbench/api/common/extHostTypes.ts
index 4bbfe4c7787..4f65a5c418d 100644
--- a/src/vs/workbench/api/common/extHostTypes.ts
+++ b/src/vs/workbench/api/common/extHostTypes.ts
@@ -4298,8 +4298,8 @@ export class ChatResponseCommandButtonPart {
 }
 
 export class ChatResponseReferencePart {
-	value: vscode.Uri | vscode.Location;
-	constructor(value: vscode.Uri | vscode.Location) {
+	value: vscode.Uri | vscode.Location | { variableName: string; value?: vscode.Uri | vscode.Location };
+	constructor(value: vscode.Uri | vscode.Location | { variableName: string; value?: vscode.Uri | vscode.Location }) {
 		this.value = value;
 	}
 }
diff --git a/src/vs/workbench/contrib/chat/browser/chatListRenderer.ts b/src/vs/workbench/contrib/chat/browser/chatListRenderer.ts
index 0e3816eafed..84a5660285c 100644
--- a/src/vs/workbench/contrib/chat/browser/chatListRenderer.ts
+++ b/src/vs/workbench/contrib/chat/browser/chatListRenderer.ts
@@ -25,6 +25,7 @@ import { ResourceMap } from 'vs/base/common/map';
 import { FileAccess, Schemas, matchesSomeScheme } from 'vs/base/common/network';
 import { clamp } from 'vs/base/common/numbers';
 import { basename } from 'vs/base/common/path';
+import { basenameOrAuthority, dirname } from 'vs/base/common/resources';
 import { equalsIgnoreCase } from 'vs/base/common/strings';
 import { ThemeIcon } from 'vs/base/common/themables';
 import { URI } from 'vs/base/common/uri';
@@ -41,6 +42,7 @@ import { IContextKeyService } from 'vs/platform/contextkey/common/contextkey';
 import { FileKind, FileType } from 'vs/platform/files/common/files';
 import { IInstantiationService } from 'vs/platform/instantiation/common/instantiation';
 import { ServiceCollection } from 'vs/platform/instantiation/common/serviceCollection';
+import { ILabelService } from 'vs/platform/label/common/label';
 import { WorkbenchCompressibleAsyncDataTree, WorkbenchList } from 'vs/platform/list/browser/listService';
 import { ILogService } from 'vs/platform/log/common/log';
 import { IOpenerService } from 'vs/platform/opener/common/opener';
@@ -58,6 +60,7 @@ import { CONTEXT_CHAT_RESPONSE_SUPPORT_ISSUE_REPORTING, CONTEXT_REQUEST, CONTEXT
 import { IChatProgressRenderableResponseContent } from 'vs/workbench/contrib/chat/common/chatModel';
 import { chatAgentLeader, chatSubcommandLeader } from 'vs/workbench/contrib/chat/common/chatParserTypes';
 import { IChatCommandButton, IChatContentReference, IChatFollowup, IChatProgressMessage, IChatResponseProgressFileTreeData, InteractiveSessionVoteDirection } from 'vs/workbench/contrib/chat/common/chatService';
+import { IChatVariablesService } from 'vs/workbench/contrib/chat/common/chatVariables';
 import { IChatProgressMessageRenderData, IChatRenderData, IChatResponseMarkdownRenderData, IChatResponseViewModel, IChatWelcomeMessageViewModel, isRequestVM, isResponseVM, isWelcomeVM } from 'vs/workbench/contrib/chat/common/chatViewModel';
 import { IWordCountResult, getNWords } from 'vs/workbench/contrib/chat/common/chatWordCounter';
 import { createFileIconThemableTreeContainerScope } from 'vs/workbench/contrib/files/browser/views/explorerView';
@@ -800,17 +803,22 @@ export class ChatListItemRenderer extends Disposable implements ITreeRenderer<Ch
 
 		listDisposables.add(list.onDidOpen((e) => {
 			if (e.element) {
-				this.openerService.open(
-					'uri' in e.element.reference ? e.element.reference.uri : e.element.reference,
-					{
-						fromUserGesture: true,
-						editorOptions: {
-							...e.editorOptions,
-							...{
-								selection: 'range' in e.element.reference ? e.element.reference.range : undefined
+				const uriOrLocation = 'variableName' in e.element.reference ? e.element.reference.value : e.element.reference;
+				const uri = URI.isUri(uriOrLocation) ? uriOrLocation :
+					uriOrLocation?.uri;
+				if (uri) {
+					this.openerService.open(
+						uri,
+						{
+							fromUserGesture: true,
+							editorOptions: {
+								...e.editorOptions,
+								...{
+									selection: 'range' in e.element.reference ? e.element.reference.range : undefined
+								}
 							}
-						}
-					});
+						});
+				}
 			}
 		}));
 		listDisposables.add(list.onContextMenu((e) => {
@@ -1163,10 +1171,13 @@ class ContentReferencesListPool extends Disposable {
 				alwaysConsumeMouseWheel: false,
 				accessibilityProvider: {
 					getAriaLabel: (element: IChatContentReference) => {
-						if (URI.isUri(element.reference)) {
-							return basename(element.reference.path);
+						const reference = element.reference;
+						if ('variableName' in reference) {
+							return reference.variableName;
+						} else if (URI.isUri(reference)) {
+							return basename(reference.path);
 						} else {
-							return basename(element.reference.uri.path);
+							return basename(reference.uri.path);
 						}
 					},
 
@@ -1212,6 +1223,8 @@ class ContentReferencesListRenderer implements IListRenderer<IChatContentReferen
 
 	constructor(
 		private labels: ResourceLabels,
+		@ILabelService private readonly labelService: ILabelService,
+		@IChatVariablesService private readonly chatVariablesService: IChatVariablesService,
 	) { }
 
 	renderTemplate(container: HTMLElement): IChatContentReferenceListTemplate {
@@ -1220,18 +1233,30 @@ class ContentReferencesListRenderer implements IListRenderer<IChatContentReferen
 		return { templateDisposables, label };
 	}
 
-	renderElement(element: IChatContentReference, index: number, templateData: IChatContentReferenceListTemplate, height: number | undefined): void {
+	renderElement(data: IChatContentReference, index: number, templateData: IChatContentReferenceListTemplate, height: number | undefined): void {
+		const reference = data.reference;
 		templateData.label.element.style.display = 'flex';
-		const uri = 'uri' in element.reference ? element.reference.uri : element.reference;
-		if (matchesSomeScheme(uri, Schemas.mailto, Schemas.http, Schemas.https)) {
-			templateData.label.setResource({ resource: uri, name: uri.toString() }, { icon: Codicon.globe });
+		if ('variableName' in reference) {
+			if (reference.value) {
+				const uri = URI.isUri(reference.value) ? reference.value : reference.value.uri;
+				const title = this.labelService.getUriLabel(dirname(uri), { relative: true });
+				templateData.label.setResource({ resource: uri, name: basenameOrAuthority(uri), description: `#${reference.variableName}` }, { title });
+			} else {
+				const variable = this.chatVariablesService.getVariable(reference.variableName);
+				templateData.label.setLabel(`#${reference.variableName}`, undefined, { title: variable?.description });
+			}
 		} else {
-			templateData.label.setFile(uri, {
-				fileKind: FileKind.FILE,
-				// Should not have this live-updating data on a historical reference
-				fileDecorations: { badges: false, colors: false },
-				range: 'range' in element.reference ? element.reference.range : undefined
-			});
+			const uri = 'uri' in reference ? reference.uri : reference;
+			if (matchesSomeScheme(uri, Schemas.mailto, Schemas.http, Schemas.https)) {
+				templateData.label.setResource({ resource: uri, name: uri.toString() }, { icon: Codicon.globe });
+			} else {
+				templateData.label.setFile(uri, {
+					fileKind: FileKind.FILE,
+					// Should not have this live-updating data on a historical reference
+					fileDecorations: { badges: false, colors: false },
+					range: 'range' in reference ? reference.range : undefined
+				});
+			}
 		}
 	}
 
diff --git a/src/vs/workbench/contrib/chat/browser/chatVariables.ts b/src/vs/workbench/contrib/chat/browser/chatVariables.ts
index 971e0434e96..812fe6f1e0b 100644
--- a/src/vs/workbench/contrib/chat/browser/chatVariables.ts
+++ b/src/vs/workbench/contrib/chat/browser/chatVariables.ts
@@ -73,6 +73,10 @@ export class ChatVariablesService implements IChatVariablesService {
 		return this._resolver.has(name.toLowerCase());
 	}
 
+	getVariable(name: string): IChatVariableData | undefined {
+		return this._resolver.get(name.toLowerCase())?.data;
+	}
+
 	getVariables(): Iterable<Readonly<IChatVariableData>> {
 		const all = Iterable.map(this._resolver.values(), data => data.data);
 		return Iterable.filter(all, data => !data.hidden);
diff --git a/src/vs/workbench/contrib/chat/common/chatService.ts b/src/vs/workbench/contrib/chat/common/chatService.ts
index 42c94d58248..819c41f3045 100644
--- a/src/vs/workbench/contrib/chat/common/chatService.ts
+++ b/src/vs/workbench/contrib/chat/common/chatService.ts
@@ -74,8 +74,13 @@ export function isIUsedContext(obj: unknown): obj is IChatUsedContext {
 	);
 }
 
+export interface IChatContentVariableReference {
+	variableName: string;
+	value?: URI | Location;
+}
+
 export interface IChatContentReference {
-	reference: URI | Location;
+	reference: URI | Location | IChatContentVariableReference;
 	kind: 'reference';
 }
 
diff --git a/src/vs/workbench/contrib/chat/common/chatVariables.ts b/src/vs/workbench/contrib/chat/common/chatVariables.ts
index fb6eb71a858..dc999f8081f 100644
--- a/src/vs/workbench/contrib/chat/common/chatVariables.ts
+++ b/src/vs/workbench/contrib/chat/common/chatVariables.ts
@@ -41,6 +41,7 @@ export interface IChatVariablesService {
 	_serviceBrand: undefined;
 	registerVariable(data: IChatVariableData, resolver: IChatVariableResolver): IDisposable;
 	hasVariable(name: string): boolean;
+	getVariable(name: string): IChatVariableData | undefined;
 	getVariables(): Iterable<Readonly<IChatVariableData>>;
 	getDynamicVariables(sessionId: string): ReadonlyArray<IDynamicVariable>; // should be its own service?
 
diff --git a/src/vs/workbench/contrib/chat/common/codeBlockModelCollection.ts b/src/vs/workbench/contrib/chat/common/codeBlockModelCollection.ts
index 45a9d686c57..08146ac2511 100644
--- a/src/vs/workbench/contrib/chat/common/codeBlockModelCollection.ts
+++ b/src/vs/workbench/contrib/chat/common/codeBlockModelCollection.ts
@@ -108,15 +108,22 @@ export class CodeBlockModelCollection extends Disposable {
 
 		return {
 			references: chat.contentReferences.map(ref => {
-				if (URI.isUri(ref.reference)) {
+				const uriOrLocation = 'variableName' in ref.reference ?
+					ref.reference.value :
+					ref.reference;
+				if (!uriOrLocation) {
+					return;
+				}
+
+				if (URI.isUri(uriOrLocation)) {
 					return {
-						uri: ref.reference.toJSON()
+						uri: uriOrLocation.toJSON()
 					};
 				}
 
 				return {
-					uri: ref.reference.uri.toJSON(),
-					range: ref.reference.range,
+					uri: uriOrLocation.uri.toJSON(),
+					range: uriOrLocation.range,
 				};
 			})
 		};
diff --git a/src/vs/workbench/contrib/chat/test/common/mockChatVariables.ts b/src/vs/workbench/contrib/chat/test/common/mockChatVariables.ts
index 38c63ebeee0..0df8e2b57e7 100644
--- a/src/vs/workbench/contrib/chat/test/common/mockChatVariables.ts
+++ b/src/vs/workbench/contrib/chat/test/common/mockChatVariables.ts
@@ -15,6 +15,10 @@ export class MockChatVariablesService implements IChatVariablesService {
 		throw new Error('Method not implemented.');
 	}
 
+	getVariable(name: string): IChatVariableData | undefined {
+		throw new Error('Method not implemented.');
+	}
+
 	hasVariable(name: string): boolean {
 		throw new Error('Method not implemented.');
 	}
diff --git a/src/vscode-dts/vscode.proposed.chatParticipant.d.ts b/src/vscode-dts/vscode.proposed.chatParticipant.d.ts
index e852daece58..c71c5b6408b 100644
--- a/src/vscode-dts/vscode.proposed.chatParticipant.d.ts
+++ b/src/vscode-dts/vscode.proposed.chatParticipant.d.ts
@@ -392,7 +392,7 @@ declare module 'vscode' {
 		 * @param value A uri or location
 		 * @returns This stream.
 		 */
-		reference(value: Uri | Location): ChatResponseStream;
+		reference(value: Uri | Location | { variableName: string; value?: Uri | Location }): ChatResponseStream;
 
 		/**
 		 * Pushes a part to this stream.
@@ -430,8 +430,8 @@ declare module 'vscode' {
 	}
 
 	export class ChatResponseReferencePart {
-		value: Uri | Location;
-		constructor(value: Uri | Location);
+		value: Uri | Location | { variableName: string; value?: Uri | Location };
+		constructor(value: Uri | Location | { variableName: string; value?: Uri | Location });
 	}
 
 	export class ChatResponseCommandButtonPart {