Azure OpenAI gives you access to OpenAI models hosted in your own Azure tenant. This guide covers both authentication methods.

## Prerequisites

- An Azure subscription with Azure OpenAI Service enabled
- A deployed model (e.g., GPT-4o, GPT-4 Turbo) in your Azure OpenAI resource
- The endpoint URL and deployment name from the Azure portal

## Configure with API key

1. Open **Settings > Azure OpenAI** in Daneel.
2. Enter your **Endpoint URL** (e.g., `https://your-resource.openai.azure.com/`).
3. Enter your **Deployment name** (the name you gave your model deployment).
4. Select **API Key** as the auth method.
5. Paste your Azure API key.
6. Click **Save**.

Switch the provider dropdown in the chat panel to **Azure OpenAI** to start using it.

## Configure with Entra ID (OAuth2)

For environments that require Azure Active Directory authentication:

1. Open **Settings > Azure OpenAI** in Daneel.
2. Enter your **Endpoint URL** and **Deployment name**.
3. Select **Entra ID** as the auth method.
4. Daneel initiates an OAuth2 flow via Chrome's identity API.
5. Sign in with your Microsoft account and consent to the required permissions.

Daneel handles token refresh automatically.

## Tool calling

Azure OpenAI supports MCP tool calling using the OpenAI function calling format. Once configured, [connected MCP servers](/how-to/mcp-server/) work the same as with Claude or Ollama.

## Next steps

- [Connect MCP servers](/how-to/mcp-server/) to give Azure OpenAI access to external tools
- See the [AI Providers reference](/reference/providers/) for a comparison of all backends
- Read about [the provider spectrum](/concepts/providers/) to understand trade-offs