Azure API Management Your Auth Gateway For MCP Servers
The Model Context Protocol (MCP) is quickly becoming the standard for integrating Tools 🛠️ with Agents 🤖 and Azure API Management is at the fore-front, ready to support this open-source protocol 🚀. You may have already encountered discussions about MCP, so let's clarify some key concepts: Model Context Protocol (MCP) is a standardized way, (a protocol), for AI models to interact with external tools, (and either read data or perform actions) and to enrich context for ANY language models. AI Agents/Assistants are autonomous LLM-powered applications with the ability to use tools to connect to external services required to accomplish tasks on behalf of users. Tools are components made available to Agents allowing them to interact with external systems, perform computation, and take actions to achieve specific goals. Azure API Management: As a platform-as-a-service, API Management supports the complete API lifecycle, enabling organizations to create, publish, secure, and analyze APIs with built-in governance, security, analytics, and scalability. New Cool Kid in Town - MCP AI Agents are becoming widely adopted due to enhanced Large Language Model (LLM) capabilities. However, even the most advanced models face limitations due to their isolation from external data. Each new data source requires custom implementations to extract, prepare, and make data accessible for any model(s). - A lot of heavy lifting. Anthropic developed an open-source standard - the Model Context Protocol (MCP), to connect your agents to external data sources such as local data sources (databases or computer files) or remote services (systems available over the internet through e.g. APIs). MCP Hosts: LLM applications such as chat apps or AI assistant in your IDEs (like GitHub Copilot in VS Code) that need to access external capabilities MCP Clients: Protocol clients that maintain 1:1 connections with servers, inside the host application MCP Servers: Lightweight programs that each expose specific capabilities and provide context, tools, and prompts to clients MCP Protocol: Transport layer in the middle At its core, MCP follows a client-server architecture where a host application can connect to multiple servers. Whenever your MCP host or client needs a tool, it is going to connect to the MCP server. The MCP server will then connect to for example a database or an API. MCP hosts and servers will connect with each other through the MCP protocol. You can create your own custom MCP Servers that connect to your or organizational data sources. For a quick start, please visit our GitHub repository to learn how to build a remote MCP server using Azure Functions without authentication: https://aka.ms/mcp-remote Remote vs. Local MCP Servers The MCP standard supports two modes of operation: Remote MCP servers: MCP clients connect to MCP servers over the Internet, establishing a connection using HTTP and Server-Sent Events (SSE), and authorizing the MCP client access to resources on the user's account using OAuth. Local MCP servers: MCP clients connect to MCP servers on the same machine, using stdio as a local transport method. Azure API Management as the AI Auth Gateway Now that we have learned that MCP servers can connect to remote services through an API. The question now rises, how can we expose our remote MCP servers in a secure and scalable way? This is where Azure API Management comes in. A way that we can securely and safely expose tools as MCP servers. Azure API Management provides: Security: AI agents often need to access sensitive data. API Management as a remote MCP proxy safeguards organizational data through authentication and authorization. Scalability: As the number of LLM interactions and external tool integrations grows, API Management ensures the system can handle the load. Security remains to be a critical piece of building MCP servers, as agents will need to securely connect to protected endpoints (tools) to perform certain actions or read protected data. When building remote MCP servers, you need a way to allow users to login (Authenticate) and allow them to grant the MCP client access to resources on their account (Authorization). MCP - Current Authorization Challenges State: 4/10/2025 Recent changes in MCP authorization have sparked significant debate within the community. 🔍 𝗞𝗲𝘆 𝗖𝗵𝗮𝗹𝗹𝗲𝗻𝗴𝗲𝘀 with the Authorization Changes: The MCP server is now treated as both a resource server AND an authorization server. This dual role has fundamental implications for MCP server developers and runtime operations. 💡 𝗢𝘂𝗿 𝗦𝗼𝗹𝘂𝘁𝗶𝗼𝗻: To address these challenges, we recommend using 𝗔𝘇𝘂𝗿𝗲 𝗔𝗣𝗜 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 as your authorization gateway for remote MCP servers. 🔗For an enterprise-ready solution, please check out our azd up sample repo to learn how to build a remote MCP server using Azure API Management as your authentication gateway: https://aka.ms/mcp-remote-apim-auth The Authorization Flow The workflow involves three core components: the MCP client, the APIM Gateway, and the MCP server, with Microsoft Entra managing authentication (AuthN) and authorization (AuthZ). Using the OAuth protocol, the client starts by calling the APIM Gateway, which redirects the user to Entra for login and consent. Once authenticated, Entra provides an access token to the Gateway, which then exchanges a code with the client to generate an MCP server token. This token allows the client to communicate securely with the server via the Gateway, ensuring user validation and scope verification. Finally, the MCP server establishes a session key for ongoing communication through a dedicated message endpoint. Diagram source: https://aka.ms/mcp-remote-apim-auth-diagram Conclusion Azure API Management (APIM) is an essential tool for enterprise customers looking to integrate AI models with external tools using the Model Context Protocol (MCP). In this blog, we've emphasized the simplicity of connecting AI agents to various data sources through MCP, streamlining previously complex implementations. Given the critical role of secure access to platforms and services for AI agents, APIM offers robust solutions for managing OAuth tokens and ensuring secure access to protected endpoints, making it an invaluable asset for enterprises, despite the challenges of authentication. API Management: An Enterprise Solution for Securing MCP Servers Azure API Management is an essential tool for enterprise customers looking to integrate AI models with external tools using the Model Context Protocol (MCP). It is designed to help you to securely expose your remote MCP servers. MCP servers are still very new, and as the technology evolves, API Management provides an enterprise-ready solution that will evolve with the latest technology. Stay tuned for further feature announcements soon! Acknowledgments This post and work was made possible thanks to the hard work and dedication of our incredible team. Special thanks to Pranami Jhawar, Julia Kasper, Julia Muiruri, Annaji Sharma Ganti Jack Pa, Chaoyi Yuan and Alex Vieira for their invaluable contributions. Additional Resources MCP Client Server integration with APIM as AI gateway Blog Post: https://aka.ms/remote-mcp-apim-auth-blog Sequence Diagram: https://aka.ms/mcp-remote-apim-auth-diagram APIM lab: https://aka.ms/ai-gateway-lab-mcp-client-auth Python: https://aka.ms/mcp-remote-apim-auth .NET: https://aka.ms/mcp-remote-apim-auth-dotnet On-Behalf-Of Authorization: https://aka.ms/mcp-obo-sample 3rd Party APIs – Backend Auth via Credential Manager: Blog Post: https://aka.ms/remote-mcp-apim-lab-blog APIM lab: https://aka.ms/ai-gateway-lab-mcp YouTube Video: https://aka.ms/ai-gateway-lab-demo
🚀 New & Improved Data Mapper UX in Azure Logic Apps – Now in Public Preview!
We’re excited to announce that a UX update for Data Mapper in Azure Logic Apps is now in Public Preview! We have continuously improved Data Mapper, which is already generally available (GA), based on customer feedback. Last year, we conducted a private preview to assess the improvements in the new user experience and confirm that we are on the right track in simplifying complex data transformations, including EDI schemas. With the insights gained, we made significant UI enhancements and added features to streamline the mapping process. Feedback We value your feedback to make the Data Mapper even better. Please share your thoughts, suggestions, and overall experience with us through our feedback form. How feedback shaped the Public Preview Throughout the evolution of Data Mapper, we gathered valuable feedback from customers and partners. Key themes that emerged include: Reliability: Ensuring the Data Mapper can handle large schemas and complex transformation logic, including functions. Error handling: Providing real-time validation by allowing users to test payloads and catch errors while authoring maps. Looping: Clearly indicating when repeating nodes are mapped and ensuring complex objects are properly represented Drag & drop enhancements: Improving how connections between nodes are created for better usability. Deserialization & namespace honoring: Ensuring XML deserialization correctly loads mappings without data loss, preserving namespace integrity for seamless schema validation. We’ve incorporated these suggestions into the public preview, ensuring a more refined and user-friendly experience. What’s new in the Data Mapper UX? 1. Easier navigation Docked schema panels keep you oriented within the data map. Easily search for specific nodes to streamline mapping. 2. Side-by-side function panel Search and use 100+ built-in functions, including mainly: Collection functions (for repeating elements) String manipulations Mathematical operations Conditional logic 3. Automatic looping for repeating nodes When mapping repeating nodes, a new loop connection is automatically added on the immediate parent nodes at source and destination. Repeating parent nodes are denoted by "A1, A2" notation on hover. Note: If the child node in the source has a deeper nesting level than in the destination, you must manually map the connection from the repeating source node to the destination to ensure proper data transformation. 4. Real-time error detection On saving the map, instantly view warnings and errors for missing mappings or incorrect configurations 5. Test Your Map Instantly Preview the output before running your workflow. How to set up and test out the new Data Mapper experience Enable the Preview: Go to your Azure Logic App (Standard) extension -> Settings -> Data Mapper. Select “Version ~2” to try out the new user experience. Light theme: Enable "Light Theme" in VS Code before creating a new data map. Dark Theme is not supported, but is on the roadmap and will be prioritized soon. Create a New Data Map: Navigate to the Azure tab on the left-hand panel of your VS Code. Select “Create New Data Map” and name it. Once loaded, select the schemas for source and destination. Upload schemas: Upload your source and destination schemas before creating the map (eg .xsd or .json files). Limitations While the new Data Mapper UX brings significant improvements, a few limitations remain: Filter function: The filter function correctly processes numeric conditions when enclosed in quotes (e.g., ">= 10"), but does not behave consistently for string comparisons (e.g., checking if item name = "Pen"). We are actively working on refining this behavior. Custom Functions: Support for custom functions is coming in the next refresh to enhance flexibility in data mapping. Usability enhancements: Improved tooltips, function labels, error messages and other UX refinements are on the way to provide clearer guidance and a smoother mapping experience, especially for complex transformations. Future investments The product is going to continue getting better and we should be adding more features very soon! Some immediate investments include: Enhanced test map experience: Making it easier to validate mappings during development. Panel resizing: Allowing users to have flexibility in viewing larger schemas and functions when multiple panels are expanded.Introducing Azure API Management Policy Toolkit
We’re excited to announce the early release of the Azure API Management Policy Toolkit, a set of libraries and tools designed to change how developers work with API Management policies, making policy management more approachable, testable, and efficient for developers. Empowering developers with Azure API Management Policy Toolkit Policies have always been at the core of Azure API Management, offering powerful capabilities to secure, change behavior, and transform requests and responses to the APIs. Recently, we've made the policies easier to understand and manage by adding Copilot for Azure features for Azure API Management. This allows you to create and explain policies with AI help directly within the Azure portal. This powerful tool lets developers create policies using simple prompts or get detailed explanations of existing policies. This makes it much easier for new users to write policies and makes all users more productive. Now, with the Policy Toolkit, we’re taking another significant step forward. This toolkit brings policy management even closer to the developer experience you know. Elevating policy development experience Azure API Management policies are written in Razor format, which for those unfamiliar with it can be difficult to read and understand, especially when dealing with large policy documents that include expressions. Testing and debugging policy changes requires deployment to a live Azure API Management instance, which slows down feedback loop even for small edits. The Policy Toolkit addresses these challenges. You can now author your policies in C#, a language that feels natural and familiar to many developers and write tests against them. This shift improves the policy writing experience for developers, makes policies more readable, and shortens the feedback loop for policy changes. Key toolkit features to transform your workflow: Consistent policy authoring. Write policies in C#. No more learning Razor syntax and mixing XML and C# in the same document. Syntax checking: Compile your policy documents to catch syntax errors and generate Razor-based equivalents. Unit testing: Write unit tests alongside your policies using your favorite unit testing framework. CI/CD integration: Integrate Policy Toolkit into automation pipelines for testing and compilation into Razor syntax for deployment. Current Limitations While we’re excited about the capabilities of the Policy Toolkit, we want to be transparent about its current limitation: Not all policies are supported yet, but we’re actively working on expanding the coverage. We are working on making the Policy Toolkit available as a NuGet package. In the meantime, you’ll need to build the solution on your own. Unit testing is limited to policy expressions and is not supported for entire policy documents yet. Get Started Today! We want you to try the Azure API Management Policy Toolkit and to see if it helps streamlining your policy management workflow. Check out documentation to get started. We’re eager to hear your feedback! By bringing policy management closer to the developer, we’re opening new possibilities to efficiently manage your API Management policies. Whether you’re using the AI-assisted approach with Copilot for Azure or diving deep into C# with the Policy Toolkit, we’re committed to making policy management more approachable and powerful.Introducing GenAI Gateway Capabilities in Azure API Management
We are thrilled to announce GenAI Gateway capabilities in Azure API Management – a set of features designed specifically for GenAI use cases. Azure OpenAI service offers a diverse set of tools, providing access to advanced models like GPT3.5-Turbo to GPT-4 and GPT-4 Vision, enabling developers to build intelligent applications that can understand, interpret, and generate human-like text and images. One of the main resources you have in Azure OpenAI is tokens. Azure OpenAI assigns quota for your model deployments expressed in tokens-per-minute (TPMs) which is then distributed across your model consumers that can be represented by different applications, developer teams, departments within the company, etc. Starting with a single application integration, Azure makes it easy to connect your app to Azure OpenAI. Your intelligent application connects to Azure OpenAI directly using API Key with a TPM limit configured directly on the model deployment level. However, when you start growing your application portfolio, you are presented with multiple apps calling single or even multiple Azure OpenAI endpoints deployed as Pay-as-you-go or Provisioned Throughput Units (PTUs) instances. That comes with certain challenges: How can we track token usage across multiple applications? How can we do cross charges for multiple applications/teams that use Azure OpenAI models? How can we make sure that a single app does not consume the whole TPM quota, leaving other apps with no option to use Azure OpenAI models? How can we make sure that the API key is securely distributed across multiple applications? How can we distribute load across multiple Azure OpenAI endpoints? How can we make sure that PTUs are used first before falling back to Pay-as-you-go instances? To tackle these operational and scalability challenges, Azure API Management has built a set of GenAI Gateway capabilities: Azure OpenAI Token Limit Policy Azure OpenAI Emit Token Metric Policy Load Balancer and Circuit Breaker Import Azure OpenAI as an API Azure OpenAI Semantic Caching Policy (in public preview) Azure OpenAI Token Limit Policy Azure OpenAI Token Limit policy allows you to manage and enforce limits per API consumer based on the usage of Azure OpenAI tokens. With this policy you can set limits, expressed in tokens-per-minute (TPM). This policy provides flexibility to assign token-based limits on any counter key, such as Subscription Key, IP Address or any other arbitrary key defined through policy expression. Azure OpenAI Token Limit policy also enables pre-calculation of prompt tokens on the Azure API Management side, minimizing unnecessary request to the Azure OpenAI backend if the prompt already exceeds the limit. Learn more about this policy here. Azure OpenAI Emit Token Metric Policy Azure OpenAI enables you to configure token usage metrics to be sent to Azure Applications Insights, providing overview of the utilization of Azure OpenAI models across multiple applications or API consumers. This policy captures prompt, completions, and total token usage metrics and sends them to Application Insights namespace of your choice. Moreover, you can configure or select from pre-defined dimensions to split token usage metrics, enabling granular analysis by Subscription ID, IP Address, or any custom dimension of your choice. Learn more about this policy here. Load Balancer and Circuit Breaker Load Balancer and Circuit Breaker features allow you to spread the load across multiple Azure OpenAI endpoints. With support for round-robin, weighted (new), and priority-based (new) load balancing, you can now define your own load distribution strategy according to your specific requirements. Define priorities within the load balancer configuration to ensure optimal utilization of specific Azure OpenAI endpoints, particularly those purchased as PTUs. In the event of any disruption, a circuit breaker mechanism kicks in, seamlessly transitioning to lower-priority instances based on predefined rules. Our updated circuit breaker now features dynamic trip duration, leveraging values from the retry-after header provided by the backend. This ensures precise and timely recovery of the backends, maximizing the utilization of your priority backends to their fullest. Learn more about load balancer and circuit breaker here. Import Azure OpenAI as an API New Import Azure OpenAI as an API in Azure API management provides an easy single click experience to import your existing Azure OpenAI endpoints as APIs. We streamline the onboarding process by automatically importing the OpenAPI schema for Azure OpenAI and setting up authentication to the Azure OpenAI endpoint using managed identity, removing the need for manual configuration. Additionally, within the same user-friendly experience, you can pre-configure Azure OpenAI policies, such as token limit and emit token metric, enabling swift and convenient setup. Learn more about Import Azure OpenAI as an API here. Azure OpenAI Semantic Caching policy Azure OpenAI Semantic Caching policy empowers you to optimize token usage by leveraging semantic caching, which stores completions for prompts with similar meaning. Our semantic caching mechanism leverages Azure Redis Enterprise or any other external cache compatible with RediSearch and onboarded to Azure API Management. By leveraging the Azure OpenAI Embeddings model, this policy identifies semantically similar prompts and stores their respective completions in the cache. This approach ensures completions reuse, resulting in reduced token consumption and improved response performance. Learn more about semantic caching policy here. Get Started with GenAI Gateway Capabilities in Azure API Management We’re excited to introduce these GenAI Gateway capabilities in Azure API Management, designed to empower developers to efficiently manage and scale their applications leveraging Azure OpenAI services. Get started today and bring your intelligent application development to the next level with Azure API Management.Choosing the right Azure API Management tier for your networking scenarios
There are different options when it comes to integrating your API Management with your Azure Virtual Network (VNet) which are important to understand. These options will depend on your network perimeter access requirements and the available tiers and features in Azure API Management. This blog post aims to guide you through the different options available on both the classic tiers and v2 tiers of Azure API Management, to help you decide which choice works best for your requirements. We need to define how are we going to call the tiers : developer, basic, standard , premium. For example v1 tiers, classical tiers, etc…Announcing Public Preview of Azure API Management Basic v2 and Standard v2 Tiers
We're thrilled to announce the public preview launch of our latest Azure API Management pricing tiers: Basic v2 and Standard v2. These new tiers address highly sought-after customer requests, bring quality-of-service enhancements, and offer a flexible starting point for API Management, allowing organizations of any size to embark on their API journey.AI Gateway tier of API Management now in public preview
Today, we are introducing the AI Gateway tier of Azure API Management, now in public preview. It gives platform teams a purpose-built experience built specifically for AI workloads - publishing and governing models and MCP servers. Controls are configured through policy cards rather than XML and expressions, and the portal experience and control plane are structured around models, MCP servers, and tools rather than APIs. (For brevity, we refer to the AI Gateway tier as AI Gateway throughout the rest of this article.) AI Gateway is built on Azure API Management, bringing proven operational capabilities to AI workloads. The resource runs in your subscription, uses your Entra tenant, and sends telemetry to destinations you control. The operating model will be familiar to existing API Management customers, but the interface is built around AI workloads. The AI Gateway tier is intended for teams that want this focused experience; other API Management tiers remain the right choice when organizations also need general-purpose API management or capabilities not included in the AI Gateway experience. A practical model for platform teams The AI Gateway gives platform teams a shared place to manage models, MCP servers, policies, and observability destinations, with access controlled through Azure RBAC. For example, a central platform group can connect a set of approved models and tools and publish them for application teams. The application teams can test those assets in the test console and build against them without routing every change through the central group. The platform group still owns the shared guardrails and can see how the assets are being used. After an asset is published, developers can create a named runtime key and begin calling the gateway immediately. Bring the models and tools you already use Most organizations don't standardize on a single model provider. Different models are selected based on quality, latency, cost, geography, or specialized capabilities. The preview supports models from Microsoft Foundry including OpenAI, Anthropic, Mistral, and other Foundry hosted models, as well as models hosted in AWS Bedrock, Google Vertex AI, OpenAI, and Anthropic. A guided wizard simplifies importing models from Microsoft Foundry. Other providers can be added by configuring a connection, with backend authentication configured as part of that connection. All published models are available under the same stable endpoint. Applications continue to use supported API formats such as OpenAI Chat Completions and Responses or Anthropic Messages directly or via SDKs. The AI Gateway extends governance beyond models to the MCP servers and tools agents use to interact with enterprise systems. You can expose an existing MCP server over SSE or Streamable HTTP, turn all or selected operations from a REST API into an MCP server by uploading its OpenAPI specification, or use more than 1,400 connector-backed tools from the Power Platform and Logic Apps library. You can also federate multiple MCP servers behind a single server, so an agent connects once and sees the tools across those servers. Backend authentication supports an API key, OAuth client credentials, managed identity, or mTLS. Governance that's built in Organizations need consistent governance across models and MCP servers without requiring every application team to implement those capabilities independently. The AI Gateway portal presents governance policies through an intuitive card-based experience rather than requiring policy XML. The same policies are expressed as JSON properties, making them easy to manage as infrastructure as code and to audit and enforce across a fleet with Azure Policy. In the public preview, those cards cover request and token rate limits, token quotas, Azure AI Content Safety, and fallback to a secondary model. Policies are applied per asset, making it clear which controls protect each model or MCP server. OpenTelemetry-based token metrics The AI Gateway emits token-usage metrics through OpenTelemetry, with attributes following GenAI and cloud semantic conventions. Metrics can be sent to Application Insights, Datadog, Splunk, Grafana Cloud, or another OTLP endpoint. The portal provides a monitoring view over Application Insights data. Better together: Microsoft Foundry and AI Gateway With AI Gateway, teams can extend the same governance controls, for example token rate limits and quotas, across models hosted in Microsoft Foundry and models hosted elsewhere. Foundry and non-Foundry models are published through gateway-managed endpoints, giving applications and agents a consistent way to access governed models regardless of where they are hosted. Foundry-hosted agents can consume curated sets of tools from Foundry toolboxes, with access to the underlying MCP servers and APIs governed through AI Gateway. Together, Microsoft Foundry and AI Gateway cover the enterprise application lifecycle: Foundry for building and running AI applications, and AI Gateway for publishing, governing, and observing models, tools, and MCP servers across your AI estate. The new AI Gateway tier will soon be available through the gateway experience in Microsoft Foundry portal. We are working toward a seamless, integrated AI Gateway experience within Foundry portal and will share more about that work separately. Available today in public preview The AI Gateway tier is available today at no cost in public preview in East US 2 and Sweden Central. Pricing will be shared separately. To provision a resource, add a model or MCP server, and make a first call click this to go to the AI Gateway tier portal and try it. If you prefer to start from code, use a sample to deploy all the required resources for a Foundry-hosted agent configured to access its model and tools through AI Gateway. We look forward to your feedback as we continue to rapidly evolve AI Gateway.
Expose REST APIs as MCP servers with Azure API Management and API Center (now in preview)
As AI-powered agents and large language models (LLMs) become central to modern application experiences, developers and enterprises need seamless, secure ways to connect these models to real-world data and capabilities. Today, we’re excited to introduce two powerful preview capabilities in the Azure API Management Platform: Expose REST APIs in Azure API Management as remote Model Context Protocol (MCP) servers Discover and manage MCP servers using API Center as a centralized enterprise registry Together, these updates help customers securely operationalize APIs for AI workloads and improve how APIs are managed and shared across organizations. Unlocking the value of AI through secure API integration While LLMs are incredibly capable, they are stateless and isolated unless connected to external tools and systems. Model Context Protocol (MCP) is an open standard designed to bridge this gap by allowing agents to invoke tools—such as APIs—via a standardized, JSON-RPC-based interface. With this release, Azure empowers you to operationalize your APIs for AI integration—securely, observably, and at scale. 1. Expose REST APIs as MCP servers with Azure API Management An MCP server exposes selected API operations to AI clients over JSON-RPC via HTTP or Server-Sent Events (SSE). These operations, referred to as “tools,” can be invoked by AI agents through natural language prompts. With this new capability, you can expose your existing REST APIs in Azure API Management as MCP servers—without rebuilding or rehosting them. Addressing common challenges Before this capability, customers faced several challenges when implementing MCP support: Duplicating development efforts: Building MCP servers from scratch often led to unnecessary work when existing REST APIs already provided much of the needed functionality. Security concerns: Server trust: Malicious servers could impersonate trusted ones. Credential management: Self-hosted MCP implementations often had to manage sensitive credentials like OAuth tokens. Registry and discovery: Without a centralized registry, discovering and managing MCP tools was manual and fragmented, making it hard to scale securely across teams. API Management now addresses these concerns by serving as a managed, policy-enforced hosting surface for MCP tools—offering centralized control, observability, and security. Benefits of using Azure API Management with MCP By exposing MCP servers through Azure API Management, customers gain: Centralized governance for API access, authentication, and usage policies Secure connectivity using OAuth 2.0 and subscription keys Granular control over which API operations are exposed to AI agents as tools Built-in observability through APIM’s monitoring and diagnostics features How it works MCP servers: In your API Management instance navigate to MCP servers Choose an API: + Create a new MCP Server and select the REST API you wish to expose. Configure the MCP Server: Select the API operations you want to expose as tools. These can be all or a subset of your API’s methods. Test and Integrate: Use tools like MCP Inspector or Visual Studio Code (in agent mode) to connect, test, and invoke the tools from your AI host. Getting started and availability This feature is now in public preview and being gradually rolled out to early access customers. To use the MCP server capability in Azure API Management: Prerequisites Your APIM instance must be on a SKUv1 tier: Premium, Standard, or Basic Your service must be enrolled in the AI Gateway early update group (activation may take up to 2 hours) Use the Azure Portal with feature flag: ➤ Append ?Microsoft_Azure_ApiManagement=mcp to your portal URL to access the MCP server configuration experience Note: Support for SKUv2 and broader availability will follow in upcoming updates. Full setup instructions and test guidance can be found via aka.ms/apimdocs/exportmcp. 2. Centralized MCP registry and discovery with Azure API Center As enterprises adopt MCP servers at scale, the need for a centralized, governed registry becomes critical. Azure API Center now provides this capability—serving as a single, enterprise-grade system of record for managing MCP endpoints. With API Center, teams can: Maintain a comprehensive inventory of MCP servers. Track version history, ownership, and metadata. Enforce governance policies across environments. Simplify compliance and reduce operational overhead. API Center also addresses enterprise-grade security by allowing administrators to define who can discover, access, and consume specific MCP servers—ensuring only authorized users can interact with sensitive tools. To support developer adoption, API Center includes: Semantic search and a modern discovery UI. Easy filtering based on capabilities, metadata, and usage context. Tight integration with Copilot Studio and GitHub Copilot, enabling developers to use MCP tools directly within their coding workflows. These capabilities reduce duplication, streamline workflows, and help teams securely scale MCP usage across the organization. Getting started This feature is now in preview and accessible to customers: https://aka.ms/apicenter/docs/mcp AI Gateway Lab | MCP Registry 3. What’s next These new previews are just the beginning. We're already working on: Azure API Management (APIM) Passthrough MCP server support We’re enabling APIM to act as a transparent proxy between your APIs and AI agents—no custom server logic needed. This will simplify onboarding and reduce operational overhead. Azure API Center (APIC) Deeper integration with Copilot Studio and VS Code Today, developers must perform manual steps to surface API Center data in Copilot workflows. We’re working to make this experience more visual and seamless, allowing developers to discover and consume MCP servers directly from familiar tools like VS Code and Copilot Studio. For questions or feedback, reach out to your Microsoft account team or visit: Azure API Management documentation Azure API Center documentation — The Azure API Management & API Center TeamsUse connectors with Managed Identity in the Logic Apps Standard extension
Managed Identity is Azure’s built-in way to authenticate to Microsoft Entra-protected resources without storing credentials, secrets, or connection strings. Deployed Logic Apps have supported it for a while, but the developer inner loop was a different story. You would wire up one authentication method to run and debug locally, then swap it for another before deploying to the cloud. The Logic Apps Standard extension for Visual Studio Code now lets you create connectors that use Managed Identity as an authentication parameter and run them while you build and debug locally. This works for both Azure managed connectors and service provider connectors. When you run locally, the extension authenticates as your signed-in developer identity using the Azure default credentials pattern. After you deploy, the same connection authenticates with the app’s managed identity. Why this matters for developers You gain two things. Stronger security. Managed Identity removes the requirement to keep API keys or connection strings around to reach your target systems. As the Azure Logic Apps managed-identity guidance puts it, a managed identity “removes the need to store and manage credentials, secrets, or access tokens.” Fewer secrets in your settings mean a smaller attack surface and less to rotate. One setup for local and cloud. Many teams keep one authentication configuration for local runs and redefine it for cloud deployment, and those differences often cause deployment errors. With the Azure default credentials pattern, your app authenticates with your local sign-in while you develop, then with a managed identity after you deploy. The transition needs no code changes. One connection definition covers both environments. Prerequisites Make sure you are on these versions or later: Logic Apps Standard VS Code extension 5.961.19+ Bundle 1.165.52+ Azure CLI 2.51+ Az PowerShell module You must be logged on Azure CLI (using az login) and Az Powershell module (using Connect-AzAccount). How to enable Add the following app setting to both ./local.settings.json and ./workflow-designtime/local.settings.json: { "IsEncrypted": false, "Values": { "WORKFLOWS_AUTHENTICATION_METHOD": "managedServiceIdentity" } } Then reload the Visual Studio Code window so that both the extension and the design-time engine pick up the new setting. Both files matter. The design-time engine reads its own settings file to power the designer, so skipping it is a common reason the change does not take effect. From Logic Apps extension version 5.981.1, you can choose enable Managed Identity as an authentication method by default, by checking the following extension setting: If you are not ready to use managed identity yet, you can change the WORKFLOWS_AUTHENTICATION_METHOD value to Raw. But notice that this flag enables managed identity for the whole application, so if you are planning to use this feature you need it set to managedServiceIdentity. You might want to keep the existing behavior in case your existing CI/CD pipeline requires the Raw authentication method in connections.json or parameters.json. Also notice that this is a local only setting - it is added to local.settings.json files, which are not captured by source control. How it works This uses the Azure default credentials pattern. When your workflow needs a token, the credential chain tries a series of sources in order and stops at the first one that can issue a token. Locally, that resolves to your developer identity, such as your Azure CLI az login session, your Visual Studio Code sign-in, or Azure PowerShell. After you deploy, it resolves to the app’s managed identity, which can be system-assigned or user-assigned. The configuration stays the same across both environments. Whichever identity you use, your local user while developing or the managed identity once deployed, it needs the right RBAC roles on the resources it accesses. If a connection returns an authorization error, check the role assignment on the target resource first. The WORKFLOWS_AUTHENTICATION_METHOD flag behaves differently for each connector family. The next two sections cover both. Deep dive: Azure managed connectors For managed connectors, the flag does two things. It removes the requirement for a local connection key to authorize your logic app to talk to the managed connector, its access control layer (ACL). The change is transparent: the designer shows that you now have access to the connector. You can confirm it by inspecting the connection’s access policies. It authenticates the connector to the end system using the managed identity, or your user context when you run locally. You pick Managed Identity as the authentication type when you create the connection. Creating an Azure Blob Storage (managed) connection with Authentication Type set to “Logic Apps Managed Identity.” One limitation applies today. The Managed Identity implementation for managed connectors does not generate dynamic values inside the designer. You can still configure the connector, but you supply custom values instead of picking from dynamically populated dropdowns. Deep dive: Service provider connectors Service provider connectors support dynamic parameters today. You create the connection, choose Managed Identity as the authentication type, and keep using the designer’s dynamic values as usual, such as entering the fully qualified namespace for a Service Bus connection. Creating a Service Bus (service-provider) connection with Managed Identity. The connector supports dynamic parameters such as the Fully Qualified Namespace. Try it and let us know If you build integrations on Logic Apps Standard, update to the latest extension, set WORKFLOWS_AUTHENTICATION_METHOD to managedServiceIdentity, and give your connectors a passwordless local inner loop. This small setting removes secrets from your configuration and keeps authentication consistent from your laptop to the cloud. Have feedback, or a scenario you would like to see supported, such as dynamic values for managed connectors? Share it with the Logic Apps Aviators community at aka.ms/aistechcommunity. Your input shapes the roadmap. Learn more Authenticate connections with managed identities in Azure Logic Apps Create Standard logic app workflows with Visual Studio Code DefaultAzureCredential overview (Azure Identity client library)Introducing native Service Bus message publishing from Azure API Management (Preview)
We’re excited to announce a preview capability in Azure API Management (APIM) — you can now send messages directly to Azure Service Bus from your APIs using a built-in policy. This enhancement, currently in public preview, simplifies how you connect your API layer with event-driven and asynchronous systems, helping you build more scalable, resilient, and loosely coupled architectures across your enterprise. Why this matters? Modern applications increasingly rely on asynchronous communication and event-driven designs. With this new integration: Any API hosted in API Management can publish to Service Bus — no SDKs, custom code, or middleware required. Partners, clients, and IoT devices can send data through standard HTTP calls, even if they don’t support AMQP natively. You stay in full control with authentication, throttling, and logging managed centrally in API Management. Your systems scale more smoothly by decoupling front-end requests from backend processing. How it works The new send-service-bus-message policy allows API Management to forward payloads from API calls directly into Service Bus queues or topics. High-level flow A client sends a standard HTTP request to your API endpoint in API Management. The policy executes and sends the payload as a message to Service Bus. Downstream consumers such as Logic Apps, Azure Functions, or microservices process those messages asynchronously. All configurations happen in API Management — no code changes or new infrastructure are required. Getting started You can try it out in minutes: Set up a Service Bus namespace and create a queue or topic. Enable a managed identity (system-assigned or user-assigned) on your API Management instance. Grant the identity the “Service Bus data sender” role in Azure RBAC, scoped to your queue/ topic. Add the policy to your API operation: <send-service-bus-message queue-name="orders"> <payload>@(context.Request.Body.As<string>())</payload> </send-service-bus-message> Once saved, each API call publishes its payload to the Service Bus queue or topic. 📖 Learn more. Common use cases This capability makes it easy to integrate your APIs into event-driven workflows: Order processing – Queue incoming orders for fulfillment or billing. Event notifications – Trigger internal workflows across multiple applications. Telemetry ingestion – Forward IoT or mobile app data to Service Bus for analytics. Partner integrations – Offer REST-based endpoints for external systems while maintaining policy-based control. Each of these scenarios benefits from simplified integration, centralized governance, and improved reliability. Secure and governed by design The integration uses managed identities for secure communication between API Management and Service Bus — no secrets required. You can further apply enterprise-grade controls: Enforce rate limits, quotas, and authorization through APIM policies. Gain API-level logging and tracing for each message sent. Use Service Bus metrics to monitor downstream processing. Together, these tools help you maintain a consistent security posture across your APIs and messaging layer. Build modern, event-driven architectures With this feature, API Management can serve as a bridge to your event-driven backbone. Start small by queuing a single API’s workload, or extend to enterprise-wide event distribution using topics and subscriptions. You’ll reduce architectural complexity while enabling more flexible, scalable, and decoupled application patterns. Learn more: Get the full walkthrough and examples in the documentation 👉 here
