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Windows Server Active Directory Groups vs Microsoft Entra Cloud Groups

Nimra MalikNimra Malik Oct 9, 2026 870 views

Question details

The user needs to understand the functional differences between on-premises Windows Server Active Directory groups and cloud-only Microsoft Entra groups, as well as how they are managed in a hybrid setup.

Windows Server Active Directory Groups vs. Microsoft Entra Cloud Groups
Product
Microsoft Entra ID
Device & OS
not provided
Scenario
Planning and managing user identities and group structures in a hybrid enterprise environment.
Observed behavior
Seeking detailed information on synchronization capabilities, management limits, and membership rules for on-premises versus cloud-only groups.
Before you start

Verify your current administrative access levels in both your on-premises Windows Server environment and the Microsoft Entra admin center before attempting synchronization.

Solution 1Recommended

Synchronize On-Premises Groups with Microsoft Entra ID

Use Microsoft Entra Connect to bridge your on-premises Active Directory with Microsoft Entra ID to establish a unified hybrid identity ecosystem.

By synchronizing your on-premises identities to the cloud, you allow users to access Microsoft 365 and other cloud-based services using their existing organizational credentials.

1
Install Microsoft Entra Connect

Download and install the Microsoft Entra Connect synchronization tool on a dedicated on-premises Windows Server.

2
Configure Synchronization Rules

Run the configuration wizard to link your local Active Directory forest with your Microsoft Entra ID tenant, specifying which organizational units (OUs) to sync.

3
Verify Sync Status

Open the Microsoft Entra admin center and check the synchronization logs to ensure your on-premises users and groups are successfully populating in the cloud environment.

Synchronize On-Premises Groups with Microsoft Entra ID
Management Limitation: Keep in mind that synchronized groups are treated as read-only in the cloud. You must continue to manage their membership directly from your on-premises Active Directory.
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Frequently Asked Questions

Can I edit an on-premises synchronized group directly in Microsoft Entra ID?

No, groups that are synchronized from an on-premises Active Directory cannot be edited in the cloud. Changes must be made in the local Active Directory and then synced back to Microsoft Entra ID.

What is the primary benefit of creating a cloud-only Microsoft Entra group?

Cloud-only groups allow administrators to utilize modern features like dynamic group memberships based on specific user attributes, and they do not require local server infrastructure to maintain.

Does Microsoft Entra Connect sync user passwords as well as group memberships?

Yes, Microsoft Entra Connect can be configured to use Password Hash Synchronization (PHS) or Pass-through Authentication (PTA) alongside standard group and user identity synchronization.