How To Configure Azure Active Directory?
Last Updated :
23 Jul, 2025
Azure Active Directory is a cloud based service provided by Microsoft. It is a identity provider and access management (IAM) service. If you use any of the services like Microsoft 365, Outlook etc. you're already using Azure AD. When you log into these services, you're, in fact, logging into Azure AD.
Uses of Azure AD
- Service like Skype, Outlook and OneDrive.
- Services used by organizations such as Teams, Office 365 and SharePoint.
- To connect to Azure to access Resource Groups, Subscriptions, Virtual Machines etc.
- Used by Web Developers to secure access to web services and applications.
Benefits of Using an Identity Provider
- User only needs to remember single set of credentials.
- Management of users becomes centralized as it can be done in Azure itself.
- High level of security is provided by Microsoft.
- Additional features like Multi Factor Authentication(MFA), Single sign-on and Role Based Access Control (RBAC) are provided by Azure.
Need To Configure Azure Active Directory
Azure AD needs to be configured in order to manage access and authentication to resources and applications in Azure.
A scenario where we need to configire Azure Ad can be that when we create a new user in Microsoft Azure, the default role of this user is User and hence this user can't perform all the actions that are possible in Azure. But, this user can create his own Azure Acitve Directory to be able to do almost everything in Azure.
Creating a New User in Azure Active Directory
Step 1: Navigate to your Azure portal.
Step 2: Type Azure Active Directory or AAD in the search bar and select Azure Active Directory from the options.
Step 3: From the left-hand menu, select Users under Manage category.
Step 4: Click on New User option. Then click on Create new user.
On the next screen you will be prompted to fill the details about the new user.
- User name: A unique identifier in Azure portal.
- Name: The display name of user in Azure portal.
- Password: You can either create your own password or choose the auto-generate password option.
Note: Remember the auto generated password or the password you create. This will be used to sign-in to this user later.
Step 5: Click Create.
Step 6: Sign in to this newly created user.
- Select the name of the user.
- On the next screen, copy the username, given under the name of the user.
- Now sign-in to Microsoft Azure using this username and password.
Note: Currently, this user is part of Administrator's Azure AD, and therefore has no resource groups or privileges assigned to them. Go to Azure Active Directory, choose Manage tenants. On the next screen, click on the tenant name.
The new panel shows the role as User.
Creating a New Azure Active Directory
Step 1: Navigate to your Azure portal and click on Create a Resource option.
Step 2: Type Azure Active Directory in the search bar. Then choose Azure Active Directory.
Step 3: On the next screen, select Create.
Step 4: Under the Configuration Panel, fill the details about the new tenant.
- Organization name: A unique name for the organization.
- Initial domain name: Global Unique name for all Azure AD Resources.
- Country or region: The region where the tenant will reside.
Step 5: Click on Review+Create. On the next screen, click on Create.
Step 6: Re log-in to this user's account.
Step 7: Click on the username in the top right corner and then click on Switch directory.
Step 8: Now, click on Switch in front the name of organization on the next screen.
Step 9: Now, to check the role of this user:
- Type Users in the search bar and hit enter.
- On the next screen, select the newly created user.
- Under Manage, select Assigned roles.
Now, it will show the role as Global Administrator.
You can now manage all aspects of Azure AD and Microsoft services that use Azure AD identities.
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