The service is initially available to Xbox Game Pass Ultimate subscribers who are signed up to the Xbox Insider programme.
Microsoft said the Xbox Insider launch is designed “to gather additional feedback from the Xbox community to help us refine the experience ahead of a broader rollout”.
To access the service, PC owners need to connect a compatible controller via Bluetooth or USB. Once the Xbox app is launched, users should select the ‘cloud games’ button and choose a title to start playing.
Microsoft also said it has added some new features to Xbox Cloud Gaming, including information on controller and network status, social features, and the ability to invite other players to games.
UPDATE: Xbox engineering lead Eden Marie also said Microsoft is enabling remote play in the Xbox app, meaning users will be able to stream Xbox consoles to PCs for the first time.
Users can play backward compatible games and use the store when using remote play from a PC, she added.
Microsoft recently announced the next wave of titles coming to Xbox Game Pass for console, PC and Xbox Cloud Gaming in the first half of August.
Highlights include Katamari Damacy Reroll and Lumines Remastered on August 5, and Hades on August 13.
Earlier on Monday, Microsoft confirmed that Sega’s strategy game Humankind will be available on Xbox Game Pass for PC beginning on August 17, which is the game’s release date.