The VCS Checkout mode is a setting that affects how project sources reach an agent. This mode affects only sources checkout. The current revision and changes data retrieving logic is executed by the TeamCity server and thus TeamCity server needs to access the VCS server in any mode.
Depending on the version control used, agents can require command line clients installed and available in PATH on the agents (e.g. Perforce, Git, Mercurial).
The checkout mode is configured on the build configuration's Version Control Settings page, in the Checkout Options section (an advanced setting).
TeamCity has three different VCS checkout modes:
Automatically on server
This is the default setting. The TeamCity server will export the sources and pass them to an agent before each build. Since the sources are exported rather than checked out, no administrative data is stored in the agent's file system and version control operations (like check-in, label or update) cannot be performed from the agent. TeamCity optimizes communications with the VCS servers by caching the sources and retrieving from the VCS server only the necessary changes. Unless clean checkout is performed, the server sends to the agent incremental patches to update only the files changed since the last build on the agent in the given checkout directory.
Automatically on agent
The build agent will check out the sources before the build. This checkout mode is supported only for CVS, Subversion, TFS, Mercurial, Perforce, ClearCase and Git. Agent-side checkout frees more server resources and provides the ability to access version control-specific directories (.svn, CVS, .git); that is, the build script can perform VCS operations (e.g. check-ins into the version control) — in this case ensure the build script uses credentials necessary for the check-in.
Do not check out files automatically
TeamCity will not check out any sources automatically, the default build checkout directory will still be created so that you could use it to check out the sources via a build script. Please note that TeamCity will accurately report changes only if the checkout is performed on the revision specified by the build.vcs.number.* properties passed into the build.