Microsoft Agent 365 is a platform designed to help organizations securely manage, govern, and scale AI-powered agents across the Microsoft 365 ecosystem. It provides a centralized control plane that brings identity, observability, security, and compliance to AI agents—treating them as managed digital entities rather than unmanaged tools.

As AI agents increasingly automate tasks such as joining meetings, sending emails, and accessing organizational data, enterprises face a growing challenge: how to manage AI agents with the same rigor applied to users and applications. Microsoft Agent 365 addresses this challenge.

Important
Microsoft Agent 365 is currently available through the Microsoft Copilot Frontier preview program. Features and capabilities may change as the product evolves.

Why Microsoft Introduced Agent 365

Prior to Agent 365, AI agents were often created and deployed in isolated environments, such as:

Copilot Studio
Azure AI services
Custom-developed agent frameworks

While agent creation was accessible, enterprise-level control was fragmented:

IT administrators lacked centralized visibility
Security teams could not fully monitor agent behavior
Compliance teams faced uncertainty around data access
Unapproved or “shadow” agents emerged without governance

Microsoft Agent 365 was introduced to provide a single, unified platform for discovering, managing, and governing AI agents across the organization.

What Is Microsoft Agent 365?

Microsoft Agent 365 is an enterprise platform for centralized AI agent management within Microsoft 365.

At a foundational level, Agent 365 treats AI agents as digital employees. Each agent:

Has its own identity
Operates under defined security and compliance policies
Is observable, auditable, and controllable
Can be onboarded, paused, or retired through a managed lifecycle

This approach allows organizations to apply existing identity and governance models to AI agents, reducing risk and improving trust.

How Agent 365 Differs from Microsoft 365 Copilot and Copilot Studio

Microsoft Agent 365 serves a distinct role within the Microsoft AI ecosystem.

Microsoft 365 Copilot
Helps users perform tasks such as drafting documents, summarizing meetings, and analyzing data.
Copilot Studio
Enables developers and makers to build AI agents.
Microsoft Agent 365
Provides governance, identity, and lifecycle management for all agents—regardless of how they were built.

Agent 365 does not replace Copilot or Copilot Studio. Instead, it governs and manages the agents they create.

Agent Identity with Microsoft Entra Agent ID

A core capability of Agent 365 is agent identity.

Each agent is assigned a Microsoft Entra Agent ID, similar to how human users and applications are assigned identities in Microsoft Entra ID. This identity enables organizations to:

Authenticate agents securely
Control and scope agent access
Apply Conditional Access policies
Audit and trace agent activity

Agents can operate using:

Agent-based authentication, where the agent acts under its own identity
On-behalf-of (OBO) access, where the agent performs actions using delegated user permissions

This model ensures agents follow the principle of least privilege.

Centralized Agent Management

Microsoft Agent 365 introduces a single control plane for managing AI agents across the tenant.

Unified Agent Registry

Administrators can view all agents in one place, including:

Approved and active agents
Inactive or retired agents
Shadow agents that were created outside standard governance processes

Policy Enforcement

IT teams can:

Apply governance templates
Restrict access to tools and data sources
Limit or disable high-risk capabilities

Observability

Administrators can monitor:

Agent activity and behavior
Tool and data usage
Frequency and scope of agent actions

Threat Protection

Integration with Microsoft Defender enables detection and response to suspicious or anomalous agent behavior.

Governance, Security, and Compliance

Agent 365 is designed to meet enterprise governance requirements.

It integrates with:

Microsoft Purview for data protection, compliance, and auditing
Microsoft Defender for threat detection and investigation
Microsoft Entra Conditional Access for risk-based access controls

Every agent action is:

Logged
Audited
Traceable

This allows organizations to deploy AI agents while maintaining regulatory compliance and data protection standards.

Agent Lifecycle Management

Agent 365 supports the full lifecycle of an AI agent:

Creation and registration
Identity assignment
Permission review and approval
Ongoing monitoring and auditing
Suspension, retirement, or deletion

Organizations can also track:

Agent activity logs
Security alerts
Performance and usage metrics
Business impact, such as task automation and time savings

Example Scenario: AI Sales Assistant

Consider a sales organization deploying an AI sales assistant:

The agent is assigned a Microsoft Entra Agent ID
It participates in Microsoft Teams channels
It accesses approved SharePoint documents
It sends follow-up emails from a service mailbox

IT administrators apply Conditional Access and data loss prevention policies.
Security teams monitor activity through Microsoft Defender.
Compliance teams audit actions using Microsoft Purview.

The agent operates autonomously while remaining fully governed.

Benefits by Role

IT Administrators

Centralized management through Microsoft 365 admin center
Visibility into all agents and their lifecycles

Security Teams

Real-time threat detection
Complete audit trails

Developers

Faster onboarding of agents
Built-in enterprise identity and security controls

Business Leaders

Scalable AI adoption with reduced risk
Improved visibility into ROI and productivity

Information Workers

Reduced repetitive work
Greater focus on high-value tasks

Getting Started

To use Microsoft Agent 365:

Your organization must be enrolled in the Microsoft Copilot Frontier preview
At least one Microsoft 365 Copilot license is required

After enabling access:

Sign in to the Microsoft 365 admin center
Navigate to Copilot and agent settings
Approve agent creation
Apply governance and access policies
Monitor agent activity centrally

Next Steps

Microsoft Agent 365 is a foundational platform for managing AI agents as part of the enterprise digital workforce.

Future topics to explore include:

The evolution of AI agents
Identity-first security for agents
Applying governance and observability at scale
Adoption strategies for IT, security, developers, and business leaders

👉 Read the next article in this series: Microsoft Agent 365: What’s Next and Why It Matters
This article outlines the full roadmap of topics we’ll be covering next and explains why each one is important for enterprises adopting AI agents.

Summary

Microsoft Agent 365 represents a shift in how organizations manage AI.

AI agents are no longer experimental tools—they are becoming part of the digital workforce. Agent 365 provides the structure required to manage that workforce responsibly, with identity, security, compliance, and transparency at the core.

Organizations that adopt Agent 365 early can scale AI usage safely, confidently, and at enterprise scale.

Introducing Microsoft Agent 365