Unable to establish connection between Atlassian MCP-server & github copilot in VS code

[Andew Carsten]

I tried to connect Atlassian MCP-server through github copilot in VS code but not able to do it.

"mcp": {

  "servers": {

    "atlassian": {

       "url": "https://mcp.atlassian.com/v1/sse",

       "transport": "sse",

       "command": "mcp-atlassian",

       "args": [

           "--jira-url", "https://your-company.atlassian.net",

           "--jira-username", "your.email@company.com",

           "--jira-token", "your_api_token",

           "--confluence-url", "https://your-company.atlassian.net/wiki",

           "--confluence-username", "your.email@company.com",

           "--confluence-token", "your_api_token"
        ],

      "env": {},

      "disabled": false

       }
   }
}

Tried with this code but getting this following error while running the server

2025-05-24 17:57:31.858 [info] Stopping server atlassian

2025-05-24 17:57:31.863 [info] Starting server atlassian

2025-05-24 17:57:31.864 [info] Connection state: Starting

2025-05-24 17:57:31.872 [info] Starting server from LocalProcess extension host

2025-05-24 17:57:31.875 [info] Connection state: Running

2025-05-24 17:57:32.679 [info] 401 status sending message to https://mcp.atlassian.com/v1/sse, will attempt to fall back to legacy SSE

2025-05-24 17:57:33.474 [info] Connection state: Error 401 status connecting to https://mcp.atlassian.com/v1/sse as SSE: {"error":"invalid_token","error_description":"Missing or invalid access token"}

2025-05-24 17:57:33.475 [error] Server exited before responding to `initialize` request.

Can someone provide me a solution for this.

[Fernando Nogueira]

Quiet impressive how much Atlassian is failing behind on the AI world, it's very frustrating as this prevents our company to move forward. 

[David Zhang]

same issue.

[Mark Joesting]

Same issue.

[Nikunj Manocha]

i was facing the same issue.  i was using nvm version 12.

My issue got resolved when i switched to nvm version 18. Any other version lower than that I kept getting some error.

please try and update if this resolves your error.

[afenn]

I'm on 0.39.0 and it still does not work.

[dean.pullen]

Same issue.

[afenn]

Still the same issue. Come on Atlassian.. 

[Dave]

Same here

[Hernan Montes]

I have been working with the MCP server, unfortunately, while investigating, I came to the conclusion that plain API keys will not work, you need to use a JWT token, which needs to he provided while processing handshakes with the MCP server, then you can use the approved token to connect woth your code.

[Ronny Katzenberger]

Merry Christmas - same issue. It's been working somewhat stable as in "you only had to restart the server" but then it degrades into the invalid_token state and I'm not sure how to fix that. I had this before, and had it resolved - no idea what combination of uninstalling the Atlassian MCP Server or other steps fixed it for me, at least temporarily.

[Bron Davies]

Atlassian's OAuth token doesn't automatically refresh when the MCP restarts.  This is a problem because now it doesn't authenticate, thinks it's an error and doesn't try to re-authenticate.

I had to run a couple of commands in VSCode:

- MCP Reset Trust

- MCP Reset Cached Tools

Then restart VSCode

Open the list of MCP tools from Agent chat, under the Atlassian MCP tools list, there's an Update Tools option.  Click this and it re-authenticated.

Some portions of my workflow here might be unnecessary but this definitely got it to work.  Don't forget to also restart any of the other MCP servers you're using.