Grant Key Vault Permissions for Azure Disk Encryption
A company plans to enable Azure Disk Encryption (ADE) on a fleet of Windows virtual machines. They want to use a key stored in Azure Key Vault to encrypt the disks. Which additional access configuration must be made in the Key Vault to allow ADE to succeed?
Quick Answer
The correct answer is to grant the Azure Disk Encryption service principal (Microsoft.Azure.Security) the 'Get', 'WrapKey', and 'UnwrapKey' key permissions in the Key Vault access policy. This is necessary because Azure Disk Encryption relies on this specific platform-managed service principal to authenticate and perform cryptographic operations against the vault; without these permissions, ADE cannot retrieve the encryption key or wrap and unwrap the disk encryption secrets. On the AZ-500 exam, this question tests your understanding of how Azure platform services interact with Key Vault via service principals, often appearing as a trick where candidates mistakenly grant permissions to a user or VM managed identity instead of the correct Microsoft.Azure.Security principal. A common trap is assuming the VM’s own identity handles the encryption, but ADE always uses the platform’s built-in principal. Memory tip: think “ADE needs the three K’s—Get, Wrap, Unwrap—for the Security principal.”
⚠ Common exam trap
Candidates often confuse the need to grant permissions to the VM's managed identity (Option B) with the actual requirement to grant permissions to the Azure Disk Encryption service principal, because ADE does not use the VM's identity to access the Key Vault.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Grant the Azure Disk Encryption service principal (Microsoft.Azure.Security) appropriate key permissions in the Key Vault access policy.
Azure Disk Encryption (ADE) uses the Azure platform's built-in service principal (Microsoft.Azure.Security) to access the Key Vault and retrieve the disk encryption key. Without granting this service principal the necessary 'Get', 'WrapKey', and 'UnwrapKey' key permissions in the Key Vault access policy, ADE cannot authenticate and perform the encryption operations. This is a mandatory configuration step for ADE to succeed.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Grant the Azure Disk Encryption service principal (Microsoft.Azure.Security) appropriate key permissions in the Key Vault access policy.
Why this is correct
ADE relies on the Azure Disk Encryption service principal to access the encryption key. You must grant this principal the 'get', 'wrapKey', and 'unwrapKey' permissions in the access policy.
- ✗
Assign a managed identity to each VM and grant that identity key permissions in the Key Vault.
Why it's wrong here
While managed identities are used with newer encryption options (e.g., encryption at host), classic ADE does not use the VM's managed identity; it uses the Azure Disk Encryption service principal.
- ✗
Enable soft-delete and purge protection on the Key Vault.
Why it's wrong here
Soft-delete and purge protection are recommended to prevent accidental key deletion, but they are not prerequisites for the encryption process to work.
- ✗
Assign the 'Key Vault Contributor' RBAC role to the Azure Disk Encryption service principal.
Why it's wrong here
RBAC roles like 'Key Vault Contributor' grant management plane access, not the data plane key operations needed for encryption. The access policy must define specific key permissions.
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Same concept, more angles
3 more ways this is tested on AZ-500
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. A company plans to enable Azure Disk Encryption (ADE) on their Windows virtual machines. They will use a Key Encryption Key (KEK) stored in Azure Key Vault. What additional configuration must be made in the Key Vault to allow the Azure platform to access the KEK for encrypting the VM disks?
hard- A.Grant the Azure Disk Encryption service principal 'Reader' role on the key vault.
- ✓ B.Set the key vault's 'enabledForDiskEncryption' property to true.
- C.Grant the virtual machine's managed identity 'Contributor' role on the key vault.
- D.Configure soft-delete and purge protection on the key vault.
Why B: Azure Disk Encryption requires the key vault's 'enabledForDiskEncryption' property to be set to true. This property explicitly authorizes the Azure platform (specifically the Azure Disk Encryption service) to access the Key Encryption Key (KEK) stored in the vault for encrypting VM disks. Without this flag, the platform cannot retrieve the KEK, even if other permissions exist.
Variation 2. A company plans to enable Azure Disk Encryption (ADE) on a set of Windows virtual machines using a Key Encryption Key (KEK) stored in Azure Key Vault. They have enabled soft-delete and purge protection on the Key Vault. The encryption fails with an error indicating that the key vault does not have the required permissions. Which additional configuration is most likely required for ADE to use the KEK?
medium- ✓ A.Configure the key vault access policy to grant the Azure Disk Encryption service (or the VM's managed identity) the 'Key Vault Crypto Service Encryption User' role.
- B.Enable the key vault for deployment by setting the 'Enabled for deployment' access policy.
- C.Enable the key vault for disk encryption by setting the 'Enabled for Azure Disk Encryption' access policy.
- D.Add the 'Storage Account Contributor' role for the VMs to access the key vault.
Why A: Azure Disk Encryption (ADE) with a Key Encryption Key (KEK) requires the identity performing encryption (typically the VM's managed identity) to have cryptographic permissions on the Key Vault. This can be achieved either by creating an access policy that grants the 'wrapKey' and 'unwrapKey' permissions, or by assigning the built-in RBAC role 'Key Vault Crypto Service Encryption User' to the identity via IAM. Option A incorrectly mixes these two authorization models by saying 'configure the key vault access policy to grant the role.' The proper configuration is an RBAC role assignment, not an access policy.
Variation 3. A company wants to enable Azure Disk Encryption (ADE) on their Windows virtual machines using a Key Encryption Key (KEK) stored in Azure Key Vault. They have created the Key Vault with soft-delete enabled and a key. However, the encryption fails. What is the most likely missing configuration that prevents ADE from using the KEK?
hard- ✓ A.The Key Vault does not have the 'Azure Disk Encryption for Azure VMs' access policy.
- B.The Key Vault does not allow access from the Azure platform.
- C.The Key Vault firewall is enabled and blocking access from Azure services.
- D.The Key Vault does not have the system-assigned managed identity of the VM enabled.
Why A: Azure Disk Encryption (ADE) requires the Key Vault to have an explicit access policy granting the 'Azure Disk Encryption for Azure VMs' service principal (or the equivalent Azure RBAC role) permission to wrap and unwrap keys. Without this policy, the ADE extension cannot use the KEK to protect the encryption keys, even if the Key Vault itself is correctly configured with soft-delete and a key.
JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This AZ-500 practice question is part of Courseiva's free Microsoft certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the AZ-500 exam.