Create an Azure AD License group for your Microsoft 365 users.

This blog post will describe how to create an Azure AD License group for your Microsoft 365 users.

As a Microsoft 365 administrator, sometimes you need to make your administration life so much easier. Isn’t it?

In this first post in my “Beginner’s Guide” series, I will show you how you can create an Azure Active Directory Security Group who will automatically assign a Microsoft 365 license to its members. Let’s go!

Step 1: Create an Azure Active Directory Security Group

Go to and sign in with a Global Administrator. Then go to Azure Active Directory => Groups => + New group.


In this example, we will create a group named SG_SU_M365BS_LicensedUsers, and later we will assign Microsoft 365 Business Standard to the group.

Fill in the Security Group information (Group type, Group name, Group description, etc…) and click Create.


Now let’s go to the next step, assigning the license to the group.

Step 2: Assign a license to the Security Group

Now select the group and go to Licenses and click Assignments.

In the next screen, you will get an overview of all active licenses in your tenant. In the left column, you select the license which you want to attach to the group and in the right column, you can enable/disable the feature included in the license. You can also change these settings afterward.
After selecting the desired license and its features, click Save.


Now that your license is assigned to the group, you can start adding members.

Step 3: Adding members to the Azure License Group

Now let us add a member to this License GRoup. Click on the group and go to Members. Then choose +Add members. Search for the user (in this example who chose John Doe), Click on it and choose Select.


The user is now added to the group. Give it a couple of seconds and is you now check the user’s license properties you will see that this user has a Microsoft 365 Business Standard license assigned.


So that’s it. You can now automatically manage your user licenses by simply adding a user to the License Group. Easy peasy isn’t it?


There is a second way to create an Azure Group that you can use for step 1, a dynamic group. I’ve written another blog post about creating dynamic Azure groups. You can find the blog post here: Create an Azure Dynamic User Group

Hope you found this post informative. If you have any remarks or questions, feel free to leave a reply or give me a shout on social media.

Nicky De Westelinck

Nicky De Westelinck is a Modern Workplace Expert for Arxus with several years of experience in Microsoft 365. His main focus is Microsoft Intune and Microsoft 365 Administration. He is also a Microsoft Certified Trainer since 2021.

View all posts by Nicky De Westelinck →

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