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Azure Files can be configured to authenticate users with their existing on-premises Active Directory Domain Services (AD DS) credentials. This creates a seamless hybrid experience. To set this up, you must first synchronize your local user identities to Microsoft Entra ID using a tool like Microsoft Entra Connect. Only one identity source can be active per storage account at a time.
The core technical task is domain-joining the Azure storage account to your on-premises AD. This is done by registering the storage account as a computer or service account, typically using the AzFilesHybrid PowerShell module. Proper DNS configuration is essential so client machines can find the storage endpoint and the domain controllers. Authentication uses the Kerberos protocol, and enabling AES-256 encryption for Kerberos is a security best practice. Clients must have clear network connectivity to domain controllers to retrieve Kerberos tickets.
Access control operates in two distinct layers. First, you assign share-level permissions using Azure Role-Based Access Control (RBAC) to control who can even connect to the file share. Second, you manage directory and file-level permissions using traditional Windows Access Control Lists (ACLs) for granular control inside the share. For network access, on-premises clients connect over Port 445 (SMB). Since this port is often blocked by ISPs, a secure connection like a VPN, ExpressRoute, or Private Endpoint is required to route traffic privately.
This method allows you to manage access to Azure file shares directly using Microsoft Entra ID (formerly Azure AD) identities, without needing a connection to an on-premises domain. The configuration involves granting permissions at both the share and the file level.
You begin by assigning share-level permissions to users or groups using specific, built-in Azure RBAC roles for the file share, such as Storage File Data SMB Share Contributor. Once a user has this gateway access, you can configure directory and file-level permissions using Windows ACLs (NTFS permissions) on the files and folders themselves, just like on a traditional Windows server.
For clients to authenticate using their Entra ID credentials, each client machine must be configured to retrieve Azure AD Kerberos tickets. This can be done via management tools like Intune, Group Policy, or a registry setting. Furthermore, for services like Azure File Sync, you can use managed identities instead of storage account keys. A system-assigned managed identity allows the sync service or a registered server to authenticate securely to the storage account and the sync service itself, eliminating the need to manage and rotate shared keys manually.
Managing permissions for Azure Files is a two-tier process where both share-level and directory/file-level (NTFS) permissions are enforced together, with the most restrictive permission taking effect.
At the share level, you use Azure Role-Based Access Control (RBAC) to grant data plane access. You assign specific built-in roles—like Storage File Data SMB Share Reader, Contributor, or Elevated Contributor—to Microsoft Entra identities. It is important to use these precise roles scoped to the file share (fileshares) rather than broader roles to follow the principle of least privilege and prevent excessive access.
After a user is granted share access, NTFS permissions provide fine-grained authorization inside the share. These Windows Access Control Lists (ACLs) are preserved when data is migrated to Azure and can be managed using familiar tools like Windows File Explorer or the icacls command-line utility. To initially set or modify these ACLs, an administrator often needs to mount the share using the storage account key to gain the necessary ownership rights before identity-based access is fully configured for all users.
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