The answer is to deploy an Azure VPN Gateway in each VNet and create a site-to-site VPN connection between them. This is correct because VNet peering, even global peering, does not inherently encrypt traffic; it routes data over the Microsoft backbone without IPsec. To encrypt VNet peering traffic with IPsec, you must bypass the peering connection entirely and establish a separate encrypted tunnel using VPN Gateways, which enforce IPsec/IKE protocols for all traffic between the peered VNets. On the AZ-500 exam, this question tests your understanding that VNet peering is a networking feature, not a security encryption solution, and the common trap is assuming peering alone satisfies encryption requirements. A key memory tip is: “Peering is for routing, VPN is for encrypting”—if the policy demands IPsec, think site-to-site VPN, not peering.
AZ-500 Secure networking Practice Question
This AZ-500 practice question tests your understanding of secure networking. This is a configuration task: choose the command set that satisfies every stated requirement. Small differences — like 'secret' vs 'password' or 'transport input ssh' vs 'all' — change whether the answer is correct. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A company has virtual networks in East US and West US connected via global VNet peering. The security policy requires that all traffic between the peered VNets be encrypted using IPsec. Which action should the company take to meet this requirement?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Deploy an Azure VPN Gateway in each VNet and create a site-to-site VPN connection between them.
VNet peering does not encrypt traffic between peered virtual networks by default; it relies on the Microsoft backbone network. To enforce IPsec encryption for all traffic between the peered VNets, you must deploy an Azure VPNGateway in each VNet and configure a site-to-site VPN connection between them. This creates an encrypted tunnel using IPsec/IKE protocols, satisfying the security policy requirement.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✗
Enable the 'Allow gateway transit' setting on the VNet peering.
Why it's wrong here
Gateway transit allows a spoke VNet to use the hub VPN gateway, but it does not encrypt the peering link itself.
✓
Deploy an Azure VPN Gateway in each VNet and create a site-to-site VPN connection between them.
Why this is correct
This creates an IPsec tunnel that encrypts traffic between the two VNets, meeting the requirement.
Related concept
Read the scenario before looking for a memorised answer.
✗
Enable 'Use remote gateways' on the VNet peering.
Why it's wrong here
This setting allows a peered VNet to use the remote gateway for transit, but it does not encrypt the peering connection.
✗
Configure Azure Firewall to encrypt the traffic between the VNets.
Why it's wrong here
Azure Firewall does not provide IPsec encryption; it primarily performs stateful filtering and NAT.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates assume VNet peering inherently encrypts traffic or that Azure Firewall can enforce encryption, but neither is true; only a VPNgateway provides IPsec encryption between VNets.
Detailed technical explanation
How to think about this question
Azure VPNGateway supports IPsec/IKE policy-based or route-based VPN tunnels. When you create a site-to-site VPN between two VNets, each VPN gateway negotiates an IPsec security association (SA) using protocols like IKEv1 or IKEv2, and traffic is encrypted with AES or 3DES. This setup is necessary because VNet peering traffic traverses the Microsoft backbone without encryption, and Azure does not offer a native 'encrypted peering' option.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A healthcare organisation deploys an application with a public-facing web tier and a private database tier. The database subnet has no public IP and only accepts connections from the web tier's security group. Questions like this test whether you can design cloud network isolation using VNets/VPCs, subnets, and security group rules.
Related glossary terms
Concepts from this question explained
These glossary pages explain the core terms tested in this AZ-500 question in full detail.
Secure networking — This question tests Secure networking — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Deploy an Azure VPN Gateway in each VNet and create a site-to-site VPN connection between them. — VNet peering does not encrypt traffic between peered virtual networks by default; it relies on the Microsoft backbone network. To enforce IPsec encryption for all traffic between the peered VNets, you must deploy an Azure VPN Gateway in each VNet and configure a site-to-site VPN connection between them. This creates an encrypted tunnel using IPsec/IKE protocols, satisfying the security policy requirement.
What should I do if I get this AZ-500 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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