Cortana is the update's tentpole feature, bringing Windows Phone users the ability to schedule meetings, send text messages, and search the web using their voice. The company says Cortana will learn from users, using heuristics in an effort to return more relevant information.
Microsoft has also provided an API for third-party applications to interface with the Bing-powered assistant, a feature still missing from Siri and Google's Google Now offering. There is no word on exactly what level of integration developers can expect, however.
Rumors that Microsoft was set to bring Cortana, named for a character from the blockbuster Halo franchise, to Windows Phone first surfaced in January. The company is believed to have plans to bring Cortana to the Xbox and Windows platforms next year.
Windows Phone 8.1 also includes a new Action Center that combines the functions of iOS's Control Center and Notification Center into a single feature. Action Center displays situational information, like battery percentage and notifications, and provides customizable shortcut buttons.
Other new features include the ability to set custom backgrounds and a "high density" option for adding more tiles to the home screen. Microsoft has also added a new keyboard input method, which the company calls "shape writing," allowing users to swipe across the keys to type, similar to third-party keyboards available for Google's Android.
Windows Phone 8.1 will begin rolling out to consumers "in the next few months."