🤫 Authenticated Remote MCP Server

This sample shows how to deploy an Entra ID-protected MCP server on Azure.

The sample also uses an authorization pattern where the client acquires a token for the MCP server first, and then uses on-behalf-of flow to exchange it for a token that can be used with Microsoft Graph. It does all this in an entirely secretless manner too.

⚠️ Important: Experimental Implementation

[!IMPORTANT] This is an experimental implementation and should NOT be used in production scenarios.

This sample demonstrates how to build a protected MCP server with Entra ID by implementing OAuth 2.0 Dynamic Client Registration and PKCE flow patterns that work around current gaps in Entra ID's native support for these standards. While it showcases the technical possibilities, it's intended for educational and proof-of-concept purposes only.

For production scenarios, consider using established authentication patterns with pre-registered applications and standard OAuth flows.

What it uses

⚡ Azure Functions
🕸️ Azure API Management
💪 Bicep
🐍 Python
🚀 Azure Developer CLI

[!NOTE] You can use the Model Context Protocol Inspector or Visual Studio Code to test this MCP server.

How the Authorization Flow Works

This implementation uses a sophisticated OAuth 2.0 flow with PKCE (Proof Key for Code Exchange) to securely authenticate MCP clients. Here's how it all fits together:

sequenceDiagram
    participant Client as MCP Client
    participant Browser as User's Browser
    participant APIM as API Management
    participant Entra as Entra ID
    participant Function as Azure Function
    participant Graph as Microsoft Graph

    Note over Client,Graph: 1. Discovery & Registration
    Client->>APIM: GET /.well-known/oauth-authorization-server
    APIM->>Client: OAuth metadata (authorization_endpoint, token_endpoint, etc.)
    
    Client->>APIM: POST /register (Dynamic Client Registration)
    Note over APIM: Store client info in CosmosDB<br/>Generate unique client_id
    APIM->>Client: Client credentials (client_id, no secret)

    Note over Client,Graph: 2. Authorization with PKCE
    Note over Client: Generate code_verifier & code_challenge
    Client->>Browser: Open authorization URL with PKCE params
    Browser->>APIM: GET /authorize?client_id=...&code_challenge=...
    
    Note over APIM: Check for existing consent cookie<br/>🍪 __Host-MCP_APPROVED_CLIENTS
    alt No previous consent
        APIM->>Browser: Redirect to /consent page
        Note over Browser: User reviews permissions and clicks "Allow"
        Browser->>APIM: POST /consent (with CSRF protection)
        Note over APIM: Set consent cookie<br/>🍪 __Host-MCP_APPROVED_CLIENTS<br/>🍪 __Host-MCP_CONSENT_STATE
    end
    
    APIM->>Browser: Redirect to Entra ID with state correlation
    Note over APIM: Set Entra state cookie<br/>🍪 __Host-MCP_ENTRA_STATE<br/>(contains sessionId|entraidState|clientState)
    
    Browser->>Entra: Authorize with Entra ID
    Note over Browser: User authenticates with Entra ID
    Entra->>APIM: Callback with authorization code
    
    Note over APIM: Validate state correlation<br/>Exchange code for Entra access token<br/>Generate encrypted session token
    APIM->>Browser: Redirect with MCP authorization code

    Note over Client,Graph: 3. Token Exchange
    Browser->>APIM: POST /token (code + code_verifier)
    Note over APIM: Validate PKCE challenge<br/>Return encrypted session token
    APIM->>Browser: Access token (encrypted session key)
    Browser->>Client: Token for MCP communication

    Note over Client,Graph: 4. Authenticated MCP Communication
    Client->>APIM: GET /mcp/sse (with Bearer token)
    Note over APIM: Decrypt session token<br/>Lookup cached Entra token<br/>Add to request for downstream
    APIM->>Function: Forward with Entra access token
    
    Function->>Graph: API calls using on-behalf-of flow
    Graph->>Function: User data
    Function->>APIM: MCP response
    APIM->>Client: Authenticated MCP response

Security Features & Cookies Used

This implementation uses several security mechanisms and cookies to ensure a secure flow:

Cookie	Purpose
`__Host-MCP_APPROVED_CLIENTS`	Remembers user consent for specific clients
`__Host-MCP_DENIED_CLIENTS`	Remembers denied consent to prevent re-prompting
`__Host-MCP_CONSENT_STATE`	Validates consent form submissions
`__Host-MCP_ENTRA_STATE`	Correlates Entra ID callback with original request
`__Host-MCP_CSRF_TOKEN`	Protects against CSRF attacks on consent forms

[!NOTE] All cookies use __Host- prefix, Secure, HttpOnly, and SameSite=Lax for maximum security (except __Host-MCP_ENTRA_STATE which uses SameSite=None for cross-site redirects).

Key Security Features:

🔐 PKCE (Proof Key for Code Exchange) - Prevents authorization code interception
🍪 Secure Cookies - All cookies use __Host- prefix for maximum security
🛡️ CSRF Protection - Double-submit cookie pattern with constant-time validation
🔄 State Correlation - Multiple layers of state validation prevent session fixation
🔒 Encrypted Session Tokens - Session identifiers are AES-encrypted
⏰ Token Caching - Entra tokens cached with encrypted session keys for performance

Getting started

Follow these steps to get started.

Install the Azure Developer CLI.

Clone the repository locally:

git clone https://github.com/localden/remote-auth-mcp-apim-py

Navigate to the repository in your terminal:
```
cd remote-auth-mcp-apim-py
```
Ensure the Microsoft.App resource provider is registered on your subscription either on the Azure portal or by running the following Azure CLI command:
```
az login
az provider register --namespace Microsoft.App --wait
```
Log in to Azure Developer CLI:
```
azd auth login
```
Deploy the project to Azure:
```
azd up
```

[!IMPORTANT] Deploying this project will incur Azure cost. If you are deploying for testing and experimentation, make sure to delete the created resource group after testing.

Deploying and testing the project

When you run azd up, resources declared in the infra directory will be provisioned in your Azure account. You can go through the existing Bicep files to see what infrastructure will be automatically deployed.

GIF showing the deployment of Azure resources with Azure Developer CLI

Once the deployment completes, you will be see the endpoint printed in the terminal:

Endpoint in the terminal

For example, in the screenshot above the endpoint is https://apim-2lzunaz2nu642.azure-api.net/mcp/sse. Copy it.

[!NOTE] Prior to the next step, make sure that you have Node.js installed - it's required to run the Model Context Protocol Inspector.

In your terminal, run:

npx @modelcontextprotocol/[email protected]

[!NOTE] We're using the 0.9.0 release of the Model Context Protocol Inspector because it's the most stable version when it comes to testing protected MCP servers.

This will give an endpoint where you can see Model Context Protocol Inspector running locally. Open the URL in your browser.

Switch the Transport Type to SSE and set the URL to the endpoint that you got from running the deployment. Click Connect.

Authenticating in the MCP Inspector

You will be prompted to authenticate with the credentials in the tenant in which you deployed the infrastructure. The Entra ID applications are dynamically registered at deployment time - one for the server, and another that will be used for on-behalf-of flow to acquire Microsoft Graph access.

Once you consent, you will be returned back to the Model Context Protocol Inspector landing page. Wait a few seconds until the connection is established - you will see a green Connected label on the page.

Connected MCP server in MCP Inspector

Once connected, click on List Tools and select get_graph_user_details. This will enable you to get data about the currently authenticated user from Microsoft Graph. Click Run Tool.

List tools in MCP Inspector and trigger the one that returns user details from Graph

If all goes well, you will see your user data in the response block, like this:

{
  "@odata.context": "https://graph.microsoft.com/v1.0/$metadata#users/$entity",
  "businessPhones": [],
  "displayName": "YOUR_NAME",
  "givenName": null,
  "jobTitle": null,
  "mail": "YOUR_EMAIL",
  "mobilePhone": null,
  "officeLocation": null,
  "preferredLanguage": null,
  "surname": null,
  "userPrincipalName": "YOUR_UPN",
  "id": "c6b77314-c0ec-44b2-b0bb-2c971a753f0c",
  "success": true
}

Feedback and reporting issues

Make sure to open an issue if you encounter any roadblocks or have comments.