Microsoft Entra Domain Services: Deploy, Join a VM, and Use Classic AD Tools
Microsoft Entra Domain Services (Entra DS) provides you with the functionality of managed domain controllers in Azure. This allows you to domain-join Windows Server VMs, use Group Policy, and manage DNS on a specially prepared vNet subnet without deploying and patching your own DC VMs. This post walks through: • Preparing your virtual network • Deploying Entra DS • Configuring DNS • Joining a Windows Server VM to the managed domain • Using AD DS and Windows Server DNS tools from that VM Prerequisites • An Azure subscription. • A Microsoft Entra tenant with a custom DNS domain verified (for example, zava.support). Entra DS uses this custom domain as the managed domain name. • Permission to create resource groups, VNets, and Entra DS. • Permission to manage Entra groups in the tenant (add administrators/configure RBAC). Step 1 – Create a resource group and virtual network 1. Create a new resource group in your chosen region to hold all Entra DS resources and VMs. 2. Create a virtual network (for example, zava-entra-dsvn) in that resource group (for example, address space: 172.16.0.0/16 (or a range that fits your environment). 3. Add a subnet dedicated to the Entra DS domain controllers (for example, zava-entra-dc). This subnet will host the managed domain controller resources created by Entra DS and you won’t actually deploy VMs there. Important Keep this DC subnet separate from your workload subnets. You can use NSGs, but avoid blocking Entra DS management traffic. Step 2 – Add a workload subnet for VMs 1. In the same virtual network, create a second subnet (for example, zava-domain-vms) for domain-joined workloads such as IIS VMs. This special subnet is where you’ll deploy the Windows Server VM that joins the Entra DS domain. Step 3 – Deploy Microsoft Entra Domain Services In the Azure portal, create a new Microsoft Entra Domain Services managed domain by performing the following steps: 1. Select the resource group you created earlier. 2. Confirm the DNS domain name (for example, zava.support)—this comes from your Entra tenant’s custom domain. 3. Choose the region (same region as the virtual network). 4. Keep the default Enterprise SKU unless you have a specific need for another. 5. On the Networking page: · Select the virtual network you created. · Select the DC subnet for the managed domain controllers. 6. On the Administration page note that the AAD DC Administrators group (legacy name shown in the portal) is effectively the Domain Admins equivalent for the managed domain. Any user you add to this group in Entra becomes a domain admin in Entra DS. 7. Configure synchronization scope between Entra and Entra DS. · All accounts (default) – synchronizes both cloud-only and synchronized users. · Cloud-only accounts – useful when you’re already syncing on-prem identities and you only want specific cloud accounts in Entra DS. 8. Review the Security settings page. By default: · NTLMv1 disabled. · You can enable/disable NTLM password sync, or effectively disable NTLM entirely. · RC4 encryption disabled by default. · Kerberos armoring enabled by default. · LDAP signing and LDAP channel binding enabled by default. 9. Review your configuration and create the Entra DS managed domain. Note after deployment, you cannot change: • The managed domain DNS name • Subscription • Resource group • Virtual network and subnet used by Entra DS Step 4 – Fix virtual network DNS with Entra DS health checks 1. Once deployment completes, open the Entra DS resource and go to View health. 2. Run the health checks. If the diagnostic reports that the virtual network DNS servers are not set to the Entra DS managed DC IPs, select Fix to automatically configure the VNet’s DNS servers. · In Entra DS, note the DNS server IPs (for example, 172.16.0.4 and 172.16.0.5). · In the virtual network’s DNS settings, confirm these IPs are configured as custom DNS servers. Tip Any VM in this virtual network that needs to join the managed domain must use these Entra DS DNS addresses. Step 5 – Add administrators to the AAD DC Administrators group 1. In the Entra admin center, go to Groups > All groups and locate AAD DC Administrators. 2. Open the group and add your primary admin account (for example, prime@zava.support) and add a dedicated domain admin–style account (for example, adds.prime@zava.support) to be the primary administrator for the managed domain. Important note: You’ll need to change the password of any Entra account you want to use in the managed AD DS domain after deploying Entra DS. This will configure password synchronization between Entra and Entra DS, allowing you to use the Entra account. If you don’t change the password, you’ll be unable to use the account with Entra DS even though it will function normally in other parts of Azure. This trips a lot of people up. Step 6 – Create a Windows Server IaaS VM on the workload subnet 1. In the Azure portal, create a new Windows Server VM (for example, an IIS server): 1. Place it in the same resource group. 2. Select the virtual network you created earlier. 3. Attach it to the workload subnet (for example, zava-domain-vms). 4. Configure a local administrator account (for example, username prime with a strong password). 2. On the Management blade, note the option “Login with Microsoft Entra ID”: 1. This enables direct Entra login to the VM but does not join the VM to the Entra DS domain. 2. For this walkthrough, you’ll join the VM to Entra DS using classic domain join so don’t need to enable this option. 3. Complete the wizard and deploy the VM. Step 7 – Connect to the VM and verify DNS 1. Once the VM is deployed, open the VM in the portal and select Connect > RDP. 1. Request a JIT RDP port opening if required. 2. Download the RDP file and open it with Remote Desktop Connection. 2. Sign in with the local administrator account you configured when deploying the VM and not your Entra account. 3. In the VM, open a command prompt and run: ipconfig /all 1. Confirm that the DNS servers are the Entra DS managed IPs (for example, 172.16.0.4 and 172.16.0.5). If DNS is wrong Double-check the VNet’s DNS settings and ensure the VM is attached to the correct virtual network and subnet, then restart the VM. Step 8 – Join the VM to the Entra DS domain 1. On the VM, open Server Manager and select Local Server. 2. Next to Workgroup, select the workgroup name to open System Properties (Computer Name tab). 3. Select Change… and then: · Under Member of, select Domain. · Enter the Entra DS domain name (for example, zava.support). 4. When prompted for credentials, use an account that’s a member of AAD DC Administrators, such as adds.prime@zava.support, and enter the password. 5. When you receive the confirmation that the computer has joined the domain, restart the VM. Step 9 – Sign in with an Entra DS domain account 1. After the VM restarts, reconnect via RDP using the VM’s public IP and: · Username: your domain UPN (for example, adds.prime@zava.support). · Password: the account’s password. 2. Confirm that you are signed in as a domain user in the Entra DS managed domain. Step 10 – Use AD DS and DNS tools on the domain-joined VM 1. Install and open Active Directory Users and Computers (RSAT) on the VM. · Browse the managed domain structure. · Notice containers such as AADDC Computers, AADDC Users, and groups like Domain Admins that map back to Entra groups. 2. Create an organizational unit (OU), for example IIS Servers, to contain IIS VMs. 3. Open Group Policy Management and: · Create a Group Policy Object targeting the IIS Servers OU. · Link and configure settings as required (hardening, IIS config, etc.). 4. Open the DNS Manager console on the VM, which now connects to the Entra DS–managed DNS servers. 5. Create a new Host (A) record, for example: · Name: iis3 · FQDN: iis3.zava.support · IP address: the appropriate internal address. 6. Open a command prompt and verify DNS resolution with: nslookup iis3.zava.support • Confirm it returns the correct IP address. Entra DS gives you familiar AD capabilities—domain join, Group Policy, and DNS—without the overhead of running and maintaining your own DC VMs in Azure. You can find out more at: https://learn.microsoft.com/en-us/entra/identity/domain-services/overview
