diff --git a/sdk/ai/azure-ai-agents/CHANGELOG.md b/sdk/ai/azure-ai-agents/CHANGELOG.md
index 372da3655cde..6bfb62708497 100644
--- a/sdk/ai/azure-ai-agents/CHANGELOG.md
+++ b/sdk/ai/azure-ai-agents/CHANGELOG.md
@@ -2,6 +2,16 @@
 
 # Release History
 
+## 1.2.0b7 (Unreleased)
+
+### Features Added
+
+### Breaking Changes
+
+### Bugs Fixed
+
+### Other Changes
+
 ## 1.2.0b6 (2025-10-24)
 
 ### Bugs Fixed
diff --git a/sdk/ai/azure-ai-agents/azure/ai/agents/_version.py b/sdk/ai/azure-ai-agents/azure/ai/agents/_version.py
index 772c3a2b9715..06b96995e8b4 100644
--- a/sdk/ai/azure-ai-agents/azure/ai/agents/_version.py
+++ b/sdk/ai/azure-ai-agents/azure/ai/agents/_version.py
@@ -6,4 +6,4 @@
 # Changes may cause incorrect behavior and will be lost if the code is regenerated.
 # --------------------------------------------------------------------------
 
-VERSION = "1.2.0b6"
+VERSION = "1.2.0b7"