The API key should be stored as a secret in the Copilot environment and referenced by name from the MCP configuration. This keeps the secret value out of repository files, agent prompts, pull requests, and ordinary workflow output while allowing the MCP server to receive the required credential at runtime.

A plaintext key in a configuration file is unacceptable because repository history, forks, logs, and code review systems can expose it. A Codespaces user secret is scoped to a user development environment and does not provide the intended runtime secret for the Copilot agent environment. A GitHub Actions secret is useful for workflow expressions, but the scenario requires the key to be available to the MCP server configuration itself.

The prefixed environment-secret approach creates a clear boundary: the configuration references an identifier, while the secret value is resolved only in the authorized execution environment. This supports rotation without changing tracked configuration content.

Study-guide topics: MCP authentication, secrets management, secure environment configuration, and credential isolation.