Critical Microsoft Entra ID Exploit Allows Attackers to Seize Global Admin Rights

Security researchers have recently uncovered a critical technique that could allow attackers to seize Global Administrator access in Microsoft Entra ID, raising significant concerns across the enterprise security landscape. The vulnerability—first reported by Datadog and detailed in the Petri IT Knowledgebase—centers on the exploitation of trusted Microsoft applications and misconfigurations in hybrid Active Directory environments. This article examines the technical intricacies of the exploit, Microsoft’s response, and the actionable steps organizations can take to mitigate this elevated threat.

Understanding the Entra ID Attack Surface​

Microsoft Entra ID (formerly Azure Active Directory) serves as the identity backbone for millions of organizations globally. Its role is particularly vital in hybrid scenarios where on-premises Active Directory is integrated with Entra ID for seamless authentication and user management. Such environments, while flexible, introduce complexity that can inadvertently open new avenues for attackers.
The heart of the reported technique is the ability for malicious actors to escalate their privileges to Global Administrator by hijacking privileged trust relationships—in particular, those established via Microsoft’s own Exchange Online application. The attack does not rely on a novel software vulnerability in the traditional sense, but rather on chaining together pre-existing capabilities and misconfigurations in hybrid identity setups.

The Exploitation Method: A Step-by-Step Breakdown​

Datadog’s security report outlines a shockingly effective privilege escalation pathway. The process unfolds as follows:

• Compromise of a Privileged Service Principal
  The attacker first targets a Service Principal (SP) with high privileges, such as Application Administrator or Cloud Application Administrator. These roles possess the authority to register apps, manage application credentials, and set permissions. Once an SP is compromised, it offers a launchpad for wider exploitation.
• Hijacking Exchange Online’s Service Principal
  The next step is to pivot access to the tenant’s Exchange Online application, a Microsoft-owned app that inherently possesses powerful permissions (for instance, Domain.ReadWrite.All). By leveraging the rights granted to the compromised SP, the attacker can assume control of the Exchange Online SP within the tenant.
• Federated Domain Manipulation via Graph API
  The attacker uses the Microsoft Graph API to register a new, malicious domain and verifies ownership through DNS-based mechanisms. They then set up federation for this domain, uploading a crafted certificate intended to sign Security Assertion Markup Language (SAML) tokens.
• Forging SAML Tokens for Any User
  With control of the federated domain and certificate, the adversary can generate legitimate-looking SAML tokens for any hybrid identity in the tenant—including Global Admins. This bypasses typical security checks because the tokens can be designed to include valid claims, such as the presence of multi-factor authentication (MFA).
• Stealth and Covertness
  Because the SAML tokens mirror legitimate authentication flows, the access appears routine in security logs, complicating detection and forensic analysis.

Attack Step	Method/Tool	Objective
Compromise privileged SP	Phishing, token theft, etc.	Obtain Application/Cloud App Admin privileges
Hijack Exchange Online SP	SP permission abuse	Inherit wide-reaching Exchange Online powers
Register malicious domain	Microsoft Graph API	Inject attacker-controlled federated domain
Upload malicious federation cert	Graph API, SP permissions	Sign tokens to impersonate anyone
Generate SAML tokens	Crafted/forged tokens	Attain stealthy admin access

Why Is This Technique So Damaging?​

This exploit chain takes advantage of several factors:

• Trusted First-Party Applications: Microsoft’s own applications, like Exchange Online, are inherently trusted and often granted extensive permissions within tenants. Hijacking such a trust anchor provides attackers a vast attack surface with relatively little scrutiny.
• Hybrid Complexity: Environments that federate on-premises AD with Entra ID—while offering flexibility—also increase fog-of-war around identity boundaries and token issuance.
• Role Overprovisioning: Many organizations assign broad roles like Application Administrator beyond necessity, dramatically raising the risk that a successful attack could escalate rapidly.
• Audit Challenges: Standard monitoring may not capture the full spectrum of activity around SP changes, domain federation configurations, or SAML token forgeries if not tuned expressly for these scenarios.

These points collectively create a “perfect storm” in which the odds of both compromise and undetected movement increase significantly.

Microsoft’s Response: Misconfiguration, Not a Flaw?​

After the disclosure, Microsoft’s Security Response Center (MSRC) evaluated Datadog’s report and acknowledged the described attack chain. However, Microsoft classified the issue as resulting from “expected behavior” and not a security flaw per se. Their position: the described pathway requires misconfiguration—specifically, overprovisioned service principal privileges and lax federation settings—rather than a bypass of built-in security mechanisms.
This stance has ignited debate within the security community. Some experts argue that the ability to so easily escalate to Global Admin by abusing first-party functionality—especially in commonly deployed hybrid scenarios—represents a material exposure regardless of whether it fits the strictest definition of a vulnerability.

Analysis: Where Responsibility Lies​

The distinction between vulnerability and misconfiguration is more than academic. Microsoft’s framing effectively places the remediation burden on customers. Yet, it’s undisputed that hybrid and federated environments are notoriously difficult to secure, and the boundaries between “feature” and “exploit” often blur.
Many security professionals advocate that Microsoft, as the cloud provider, bears at least some responsibility to “safe-default” the high-risk features, harden typosquatting pathways in domain registration, and improve detection mechanisms for anomalous SP or federation changes.

Best Practices: How Organizations Can Protect Themselves​

Despite differences in interpretation, consensus is clear on prevention: identity hygiene and rigorous audit controls are the most effective defense. Microsoft and external security researchers recommend a multi-faceted approach:

Restrict High-Privilege Roles​

One foundational lesson is to minimize assignment of powerful roles like Application Administrator, Cloud Application Administrator, and Privileged Role Administrator. These roles should be reserved for accounts with an explicit operational need, and regularly reviewed—preferably using just-in-time (JIT) and approval-based elevation via tools like Microsoft Privileged Identity Management (PIM).

Audit and Monitor Service Principals​

Service principals must be treated as first-class security entities. IT admins should maintain an up-to-date inventory of every SP in the tenant, monitor for changes in their credentials or permitted roles, and regularly check for unexpected or unauthorized modification. Solutions such as Microsoft Defender for Cloud Apps, as well as third-party identity protection tools, can automate much of this monitoring.
Notable recommendations include:

• Regularly running reports on SP creations, deletions, and permission assignments.
• Alerting on SPs that acquire high-value permissions or are used in unusual geographies.
• Immediately investigating any delegation of admin or federation privileges.

Secure Domain Federation​

Federation introduces structural trust. Only rigorously vetted and tightly controlled accounts should be permitted to configure new federated domains or upload federation certificates. Periodic reviews of all federated domains should be mandated, pruning unused or suspicious entries and verifying all certificate sources.

Enhance Logging and Detection​

Because the described attack can masquerade as legitimate, organizations must tune their security information and event management (SIEM) tools to pick up on subtle signs, such as:

• Sudden changes to SP role assignments or federation configuration.
• Unusually timed or sourced SAML token issuance.
• MFA claims surfacing for users without recent interactive logon histories.

Enable Conditional Access and MFA​

While the exploit can forge tokens with apparent MFA, layering conditional access policies that are adaptive to context and device can still provide added resilience. For example, policies that require re-authentication from new devices, block risky sign-ins, or enforce network location controls may limit post-compromise movement.

Potential Business Impacts​

Given the reach of Global Admin privileges, a successful exploit bares all tenant resources—cloud infrastructure, data, email, and applications—to total compromise. For regulated industries, this level of risk can trigger mandatory breach disclosures, compliance failures, and exposure to civil penalties.
Moreover, attackers who gain Global Admin can persist by creating backdoor users, manipulating logs, or deploying additional malicious SPs—all of which extend dwell time and complicate recovery efforts.

Critique and Broader Industry Perspective​

While Microsoft has correctly flagged overprivileged identities and loose federation as a root cause, the deeper concern lies in systemic complexity. When “normal” cloud configuration options can be chained into a high-impact exploit, user organizations face an uphill battle in practical risk reduction.
This dynamic isn’t unique to Microsoft. Cloud platforms across the sector—from AWS to Google Cloud—wrestle with balancing flexibility and safe defaults. However, the scale and ubiquity of Microsoft Entra ID means the impact of any such design flaw or gap in best practices is correspondingly vast.
Experts push for additional structural fixes, such as:

• Stronger Default Role Scoping: Making high-privilege role assignments opt-in and time-bound.
• Federation Guardrails: More rigorous validation and alerting when new federated domains or certificates are introduced.
• App/Service Principal Hardening: Automatic alerts or reviews for third-party (and first-party) apps gaining sensitive permissions.

Until such measures are universally implemented, security teams must assume that configuration errors are not just possible—they are inevitable. Preparedness rests on fast detection, deep visibility, and relentless reduction of standing privilege.

Real-World Examples and Lessons Learned​

The described exploit is not theoretical. Industry consultants have traced similar abuse patterns in real-world incidents, where attackers moved laterally using compromised service principals—a tactic sometimes missed until long after initial access. In several highly publicized breaches, persistent cloud access was achieved by manipulating SP credentials and certificates, reinforcing the urgency of the guidance issued here.
In the aftermath, impacted organizations found that thorough review of all service principals, domain federation settings, and administrative role assignments—while labor intensive—was essential to full remediation and future-proofing.

A Forward-Looking Security Roadmap​

Organizations embracing hybrid and multi-cloud identity need a comprehensive roadmap that goes beyond basic configuration checks. Recommended milestones include:

• Baseline Hygiene: Inventory all service principals, roles, and federated domains. Remove or restrict anything unused or excessive.
• Continuous Audit: Implement automated reporting and alerting for SP changes, domain federation, and elevated role usage.
• Zero Trust Pillars: Wherever possible, require robust authentication, adaptive policy enforcement, and minimal standing privilege.
• Resilience Testing: Regularly simulate attacks—involving SP takeover and SAML token forgery—using red teams or automated adversary simulation platforms.
• Crisis Response Planning: Ensure there is a plan for fast revocation of SP credentials, emergency log parsing, and re-securing federated domains in the event of a breach.

Conclusion: Shared Responsibility, Shared Vigilance​

The Microsoft Entra ID Global Admin escalation technique serves as both a warning and a guidepost for the industry. While the specific chain leverages Microsoft’s architecture and common hybrid setups, the underlying themes—overpermissioning, complex trust paths, and the difficulty of catching “expected” but dangerous behavior—are universal to modern cloud identity.
User organizations must adapt by treating configuration drift and role sprawl as a continual threat, not a one-time fix. At the same time, platform providers like Microsoft should revisit the user experience and safety posture of core identity primitives, aiming to make the most secure configuration also the easiest one to adopt.
In the end, bridging the gap between flexibility and safety is an ongoing effort—one in which every stakeholder, from administrators to vendors and security researchers, plays a critical role. As attacks grow in sophistication, so too must our strategies for detection, defense, and ultimately resilience in the face of the unexpected.

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Source: Petri IT Knowledgebase Microsoft Entra ID Flaw Enables Global Admin Takeover