diff --git a/.github/workflows/coder.yaml b/.github/workflows/coder.yaml
index dbaea72aa1..1ec2e82430 100644
--- a/.github/workflows/coder.yaml
+++ b/.github/workflows/coder.yaml
@@ -158,6 +158,10 @@ jobs:
           terraform_version: 1.1.2
           terraform_wrapper: false
 
+      - name: Install socat
+        if: runner.os == 'Linux'
+        run: sudo apt-get install -y socat
+
       - name: Test with Mock Database
         shell: bash
         env:
diff --git a/agent/agent.go b/agent/agent.go
index 141075c8ce..81eeb1e850 100644
--- a/agent/agent.go
+++ b/agent/agent.go
@@ -21,6 +21,8 @@ import (
 	"github.com/coder/coder/pty"
 	"github.com/coder/retry"
 
+	"github.com/pkg/sftp"
+
 	"github.com/gliderlabs/ssh"
 	gossh "golang.org/x/crypto/ssh"
 	"golang.org/x/xerrors"
@@ -121,7 +123,7 @@ func (a *agent) handlePeerConn(ctx context.Context, conn *peer.Conn) {
 
 		switch channel.Protocol() {
 		case "ssh":
-			a.sshServer.HandleConn(channel.NetConn())
+			go a.sshServer.HandleConn(channel.NetConn())
 		default:
 			a.options.Logger.Warn(ctx, "unhandled protocol from channel",
 				slog.F("protocol", channel.Protocol()),
@@ -146,7 +148,10 @@ func (a *agent) init(ctx context.Context) {
 	sshLogger := a.options.Logger.Named("ssh-server")
 	forwardHandler := &ssh.ForwardedTCPHandler{}
 	a.sshServer = &ssh.Server{
-		ChannelHandlers: ssh.DefaultChannelHandlers,
+		ChannelHandlers: map[string]ssh.ChannelHandler{
+			"direct-tcpip": ssh.DirectTCPIPHandler,
+			"session":      ssh.DefaultSessionHandler,
+		},
 		ConnectionFailedCallback: func(conn net.Conn, err error) {
 			sshLogger.Info(ctx, "ssh connection ended", slog.Error(err))
 		},
@@ -185,61 +190,54 @@ func (a *agent) init(ctx context.Context) {
 				NoClientAuth: true,
 			}
 		},
+		SubsystemHandlers: map[string]ssh.SubsystemHandler{
+			"sftp": func(session ssh.Session) {
+				server, err := sftp.NewServer(session)
+				if err != nil {
+					a.options.Logger.Debug(session.Context(), "initialize sftp server", slog.Error(err))
+					return
+				}
+				defer server.Close()
+				err = server.Serve()
+				if errors.Is(err, io.EOF) {
+					return
+				}
+				a.options.Logger.Debug(session.Context(), "sftp server exited with error", slog.Error(err))
+			},
+		},
 	}
 
 	go a.run(ctx)
 }
 
 func (a *agent) handleSSHSession(session ssh.Session) error {
-	var (
-		command string
-		args    = []string{}
-		err     error
-	)
-
 	currentUser, err := user.Current()
 	if err != nil {
 		return xerrors.Errorf("get current user: %w", err)
 	}
 	username := currentUser.Username
 
-	// gliderlabs/ssh returns a command slice of zero
-	// when a shell is requested.
-	if len(session.Command()) == 0 {
-		command, err = usershell.Get(username)
-		if err != nil {
-			return xerrors.Errorf("get user shell: %w", err)
-		}
-	} else {
-		command = session.Command()[0]
-		if len(session.Command()) > 1 {
-			args = session.Command()[1:]
-		}
+	shell, err := usershell.Get(username)
+	if err != nil {
+		return xerrors.Errorf("get user shell: %w", err)
 	}
 
-	signals := make(chan ssh.Signal)
-	breaks := make(chan bool)
-	defer close(signals)
-	defer close(breaks)
-	go func() {
-		for {
-			select {
-			case <-session.Context().Done():
-				return
-			// Ignore signals and breaks for now!
-			case <-signals:
-			case <-breaks:
-			}
-		}
-	}()
+	// gliderlabs/ssh returns a command slice of zero
+	// when a shell is requested.
+	command := session.RawCommand()
+	if len(session.Command()) == 0 {
+		command = shell
+	}
 
-	cmd := exec.CommandContext(session.Context(), command, args...)
+	// OpenSSH executes all commands with the users current shell.
+	// We replicate that behavior for IDE support.
+	cmd := exec.CommandContext(session.Context(), shell, "-c", command)
 	cmd.Env = append(os.Environ(), session.Environ()...)
 	executablePath, err := os.Executable()
 	if err != nil {
 		return xerrors.Errorf("getting os executable: %w", err)
 	}
-	cmd.Env = append(session.Environ(), fmt.Sprintf(`GIT_SSH_COMMAND="%s gitssh --"`, executablePath))
+	cmd.Env = append(cmd.Env, fmt.Sprintf(`GIT_SSH_COMMAND="%s gitssh --"`, executablePath))
 
 	sshPty, windowSize, isPty := session.Pty()
 	if isPty {
@@ -268,7 +266,7 @@ func (a *agent) handleSSHSession(session ssh.Session) error {
 	}
 
 	cmd.Stdout = session
-	cmd.Stderr = session
+	cmd.Stderr = session.Stderr()
 	// This blocks forever until stdin is received if we don't
 	// use StdinPipe. It's unknown what causes this.
 	stdinPipe, err := cmd.StdinPipe()
@@ -282,8 +280,7 @@ func (a *agent) handleSSHSession(session ssh.Session) error {
 	if err != nil {
 		return xerrors.Errorf("start: %w", err)
 	}
-	_ = cmd.Wait()
-	return nil
+	return cmd.Wait()
 }
 
 // isClosed returns whether the API is closed or not.
diff --git a/agent/agent_test.go b/agent/agent_test.go
index 0ceea3830c..f4c7d266f2 100644
--- a/agent/agent_test.go
+++ b/agent/agent_test.go
@@ -5,13 +5,16 @@ import (
 	"fmt"
 	"io"
 	"net"
+	"os"
 	"os/exec"
+	"path/filepath"
 	"runtime"
 	"strconv"
 	"strings"
 	"testing"
 
 	"github.com/pion/webrtc/v3"
+	"github.com/pkg/sftp"
 	"github.com/stretchr/testify/require"
 	"go.uber.org/goleak"
 	"golang.org/x/crypto/ssh"
@@ -94,6 +97,7 @@ func TestAgent(t *testing.T) {
 
 		local, err := net.Listen("tcp", "127.0.0.1:0")
 		require.NoError(t, err)
+		defer local.Close()
 		tcpAddr, valid = local.Addr().(*net.TCPAddr)
 		require.True(t, valid)
 		localPort := tcpAddr.Port
@@ -113,6 +117,21 @@ func TestAgent(t *testing.T) {
 		conn.Close()
 		<-done
 	})
+
+	t.Run("SFTP", func(t *testing.T) {
+		t.Parallel()
+		sshClient, err := setupAgent(t).SSHClient()
+		require.NoError(t, err)
+		client, err := sftp.NewClient(sshClient)
+		require.NoError(t, err)
+		tempFile := filepath.Join(t.TempDir(), "sftp")
+		file, err := client.Create(tempFile)
+		require.NoError(t, err)
+		err = file.Close()
+		require.NoError(t, err)
+		_, err = os.Stat(tempFile)
+		require.NoError(t, err)
+	})
 }
 
 func setupSSHCommand(t *testing.T, beforeArgs []string, afterArgs []string) *exec.Cmd {
diff --git a/cli/cliui/resources_test.go b/cli/cliui/resources_test.go
index 2711a695c8..95a7d7cb01 100644
--- a/cli/cliui/resources_test.go
+++ b/cli/cliui/resources_test.go
@@ -4,11 +4,12 @@ import (
 	"testing"
 	"time"
 
+	"github.com/stretchr/testify/require"
+
 	"github.com/coder/coder/cli/cliui"
 	"github.com/coder/coder/coderd/database"
 	"github.com/coder/coder/codersdk"
 	"github.com/coder/coder/pty/ptytest"
-	"github.com/stretchr/testify/require"
 )
 
 func TestWorkspaceResources(t *testing.T) {
diff --git a/go.mod b/go.mod
index bf86f67a78..833debd678 100644
--- a/go.mod
+++ b/go.mod
@@ -48,6 +48,7 @@ require (
 	github.com/fatih/color v1.13.0
 	github.com/gliderlabs/ssh v0.3.3
 	github.com/go-chi/chi/v5 v5.0.7
+	github.com/go-chi/httprate v0.5.3
 	github.com/go-chi/render v1.0.1
 	github.com/go-playground/validator/v10 v10.10.1
 	github.com/gohugoio/hugo v0.96.0
@@ -60,6 +61,7 @@ require (
 	github.com/hashicorp/terraform-config-inspect v0.0.0-20211115214459-90acf1ca460f
 	github.com/hashicorp/terraform-exec v0.15.0
 	github.com/hashicorp/yamux v0.0.0-20211028200310-0bc27b27de87
+	github.com/jedib0t/go-pretty/v6 v6.3.0
 	github.com/justinas/nosurf v1.1.1
 	github.com/kirsle/configdir v0.0.0-20170128060238-e45d2f54772f
 	github.com/lib/pq v1.10.5
@@ -72,7 +74,9 @@ require (
 	github.com/pion/transport v0.13.0
 	github.com/pion/webrtc/v3 v3.1.27
 	github.com/pkg/browser v0.0.0-20210911075715-681adbf594b8
+	github.com/pkg/sftp v1.13.4
 	github.com/quasilyte/go-ruleguard/dsl v0.3.19
+	github.com/robfig/cron/v3 v3.0.1
 	github.com/rs/zerolog v1.26.1
 	github.com/spf13/cobra v1.4.0
 	github.com/spf13/pflag v1.0.5
@@ -83,20 +87,19 @@ require (
 	go.uber.org/atomic v1.9.0
 	go.uber.org/goleak v1.1.12
 	golang.org/x/crypto v0.0.0-20220315160706-3147a52a75dd
+	golang.org/x/mod v0.5.1
 	golang.org/x/oauth2 v0.0.0-20220309155454-6242fa91716a
 	golang.org/x/sync v0.0.0-20210220032951-036812b2e83c
 	golang.org/x/sys v0.0.0-20220328115105-d36c6a25d886
+	golang.org/x/term v0.0.0-20210927222741-03fcf44c2211
 	golang.org/x/xerrors v0.0.0-20200804184101-5ec99f83aff1
 	google.golang.org/api v0.74.0
 	google.golang.org/protobuf v1.28.0
+	gopkg.in/DataDog/dd-trace-go.v1 v1.37.1
 	nhooyr.io/websocket v1.8.7
 	storj.io/drpc v0.0.30
 )
 
-require github.com/go-chi/httprate v0.5.3
-
-require github.com/jedib0t/go-pretty/v6 v6.3.0
-
 require (
 	github.com/Azure/go-ansiterm v0.0.0-20210617225240-d185dfc1b5a1 // indirect
 	github.com/BurntSushi/toml v1.0.0 // indirect
@@ -171,6 +174,7 @@ require (
 	github.com/json-iterator/go v1.1.12 // indirect
 	github.com/kballard/go-shellquote v0.0.0-20180428030007-95032a82bc51 // indirect
 	github.com/klauspost/compress v1.15.0 // indirect
+	github.com/kr/fs v0.1.0 // indirect
 	github.com/leodido/go-urn v1.2.1 // indirect
 	github.com/lucas-clemente/quic-go v0.25.1-0.20220307142123-ad1cb27c1b64 // indirect
 	github.com/lucasb-eyer/go-colorful v1.2.0 // indirect
@@ -222,7 +226,6 @@ require (
 	github.com/prometheus/procfs v0.7.3 // indirect
 	github.com/rivo/tview v0.0.0-20200712113419-c65badfc3d92 // indirect
 	github.com/rivo/uniseg v0.2.0 // indirect
-	github.com/robfig/cron/v3 v3.0.1
 	github.com/russross/blackfriday/v2 v2.1.0 // indirect
 	github.com/sirupsen/logrus v1.8.1 // indirect
 	github.com/spf13/afero v1.8.1 // indirect
@@ -235,16 +238,13 @@ require (
 	github.com/zclconf/go-cty v1.10.0 // indirect
 	github.com/zeebo/errs v1.2.2 // indirect
 	go.opencensus.io v0.23.0 // indirect
-	golang.org/x/mod v0.5.1
 	golang.org/x/net v0.0.0-20220325170049-de3da57026de // indirect
-	golang.org/x/term v0.0.0-20210927222741-03fcf44c2211
 	golang.org/x/text v0.3.7 // indirect
 	golang.org/x/time v0.0.0-20211116232009-f0f3c7e86c11 // indirect
 	golang.org/x/tools v0.1.9 // indirect
 	google.golang.org/appengine v1.6.7 // indirect
 	google.golang.org/genproto v0.0.0-20220324131243-acbaeb5b85eb // indirect
 	google.golang.org/grpc v1.45.0 // indirect
-	gopkg.in/DataDog/dd-trace-go.v1 v1.37.1
 	gopkg.in/coreos/go-oidc.v2 v2.2.1 // indirect
 	gopkg.in/natefinch/lumberjack.v2 v2.0.0 // indirect
 	gopkg.in/square/go-jose.v2 v2.6.0 // indirect
diff --git a/go.sum b/go.sum
index 861b43638d..888473c4ac 100644
--- a/go.sum
+++ b/go.sum
@@ -1103,6 +1103,7 @@ github.com/klauspost/crc32 v1.2.0/go.mod h1:+ZoRqAPRLkC4NPOvfYeR5KNOrY6TD+/sAC3H
 github.com/konsorten/go-windows-terminal-sequences v1.0.1/go.mod h1:T0+1ngSBFLxvqU3pZ+m/2kptfBszLMUkC4ZK/EgS/cQ=
 github.com/konsorten/go-windows-terminal-sequences v1.0.2/go.mod h1:T0+1ngSBFLxvqU3pZ+m/2kptfBszLMUkC4ZK/EgS/cQ=
 github.com/konsorten/go-windows-terminal-sequences v1.0.3/go.mod h1:T0+1ngSBFLxvqU3pZ+m/2kptfBszLMUkC4ZK/EgS/cQ=
+github.com/kr/fs v0.1.0 h1:Jskdu9ieNAYnjxsi0LbQp1ulIKZV1LAFgK1tWhpZgl8=
 github.com/kr/fs v0.1.0/go.mod h1:FFnZGqtBN9Gxj7eW1uZ42v5BccTP0vu6NEaFoC2HwRg=
 github.com/kr/logfmt v0.0.0-20140226030751-b84e30acd515/go.mod h1:+0opPa2QZZtGFBFZlji/RkVcI2GknAs/DXo4wKdlNEc=
 github.com/kr/pretty v0.1.0/go.mod h1:dAy3ld7l9f0ibDNOQOHHMYYIIbhfbHSm3C4ZsoJORNo=
@@ -1438,6 +1439,8 @@ github.com/pkg/errors v0.9.1/go.mod h1:bwawxfHBFNV+L2hUp1rHADufV3IMtnDRdf1r5NINE
 github.com/pkg/profile v1.2.1/go.mod h1:hJw3o1OdXxsrSjjVksARp5W95eeEaEfptyVZyv6JUPA=
 github.com/pkg/profile v1.6.0/go.mod h1:qBsxPvzyUincmltOk6iyRVxHYg4adc0OFOv72ZdLa18=
 github.com/pkg/sftp v1.13.1/go.mod h1:3HaPG6Dq1ILlpPZRO0HVMrsydcdLt6HRDccSgb87qRg=
+github.com/pkg/sftp v1.13.4 h1:Lb0RYJCmgUcBgZosfoi9Y9sbl6+LJgOIgk/2Y4YjMFg=
+github.com/pkg/sftp v1.13.4/go.mod h1:LzqnAvaD5TWeNBsZpfKxSYn1MbjWwOsCIAFFJbpIsK8=
 github.com/pmezard/go-difflib v0.0.0-20151028094244-d8ed2627bdf0/go.mod h1:iKH77koFhYxTK1pcRnkKkqfTogsbg7gZNVY4sRDYZ/4=
 github.com/pmezard/go-difflib v1.0.0 h1:4DBwDE0NGyQoBHbLQYPwSUPoCMWR5BEzIk/f1lZbAQM=
 github.com/pmezard/go-difflib v1.0.0/go.mod h1:iKH77koFhYxTK1pcRnkKkqfTogsbg7gZNVY4sRDYZ/4=
diff --git a/peer/channel.go b/peer/channel.go
index 732a6a1c1d..ca82887f2f 100644
--- a/peer/channel.go
+++ b/peer/channel.go
@@ -21,7 +21,7 @@ const (
 	// For some reason messages larger just don't work...
 	// This shouldn't be a huge deal for real-world usage.
 	// See: https://github.com/pion/datachannel/issues/59
-	maxMessageLength = 32 * 1024 // 32 KB
+	maxMessageLength = 64 * 1024 // 64 KB
 )
 
 // newChannel creates a new channel and initializes it.
@@ -145,7 +145,9 @@ func (c *Channel) init() {
 		if c.opts.Unordered {
 			c.reader = c.rwc
 		} else {
-			c.reader = bufio.NewReader(c.rwc)
+			// This must be the max message length otherwise a short
+			// buffer error can occur.
+			c.reader = bufio.NewReaderSize(c.rwc, maxMessageLength)
 		}
 		close(c.opened)
 	})