CIS.M365.5.1.5.5 - (L1) Ensure new application passwords are system-generated

Contributed by jeremy finneyAll contributors →

Overview

5.1.5.5 (L1) Ensure new application passwords are system-generated

In Microsoft Entra ID, applications and service principals can authenticate using password credentials (also referred to as client secrets). By default, when adding a new password credential, the caller may supply a custom password value or allow the system to generate one. This setting enforces a tenant-wide restriction that blocks the use of custom password values, requiring all new password credentials to be system-generated. The policy is implemented through the default app management policy and applies to all applications unless scoped exceptions are configured.

The setting does not affect existing password credentials; credentials created before the policy was enabled remain valid until they expire or are explicitly removed.

The recommended state is Block custom passwords set to On.

Rationale

Custom password values are chosen by the caller and are susceptible to low entropy, predictable patterns, and reuse across multiple applications. A weak or reused client secret that is compromised through source code exposure, logging, or a supply-chain breach can be trivially exploited by an attacker to authenticate as the application. System-generated passwords use random values of sufficient length and complexity, making them resistant to brute-force and dictionary attacks. Blocking custom passwords removes the weakest credential creation path and ensures that all new client secrets meet a consistent entropy baseline.

Impact

Any automated process, pipeline, or script that programmatically creates a client secret by supplying a custom password value will be blocked once the policy is enabled, unless an exception is configured. Most tooling, including the Microsoft Entra admin center, Azure CLI, and Azure PowerShell, already defaults to system-generated values, so the operational impact for typical workflows is minimal. Organizations that rely on custom password values in their automation will need to update those workflows to omit the custom value and accept the system-generated secret.

Organizations that have policies or regulatory requirements that mandate specific password formats may need to maintain exclusions for certain applications. Exceptions should be scoped narrowly and reviewed regularly to minimize risk.

Remediation action

To remediate using the UI:

1. Navigate to Microsoft Entra admin center.
2. Expand Entra ID and select Enterprise apps.
3. Under Security select Application policies.
4. Select Block custom passwords.
5. Set Status to On.
6. Set Applies to to one of the following:
   • All applications
   • All applications with exclusions (if using exclusions, ensure they are reviewed annually).
7. Set Only apply to apps created after to a desired date or leave it unconfigured.
8. Select Save and close to apply the changes.

To remediate using the Microsoft Graph API:

Important: The PATCH request replaces the passwordCredentials array in full. Retrieve the current policy first and include all existing entries in the request body to avoid overwriting other configured restrictions or exclusions.

1. Execute a GET request to retrieve the current policy: v1.0/policies/defaultAppManagementPolicy
2. Modify the returned JSON to reflect the following changes:
   • Set isEnabled to true.
   • Under applicationRestrictions.passwordCredentials, locate the entry where restrictionType is customPasswordAddition and set the following:
     • state to enabled
     • restrictForAppsCreatedAfterDateTime to 0001-01-01T00:00:00Z or a desired date.
   • Under servicePrincipalRestrictions.passwordCredentials, locate the entry where restrictionType is customPasswordAddition and set the following:
     • state to enabled
     • restrictForAppsCreatedAfterDateTime to 0001-01-01T00:00:00Z or a desired date.
3. Execute a PATCH request to the same URI with the modified JSON in the request body to apply the changes.

Note: Maester also checks that the restriction covers every existing application and service principal. Objects created before the Only apply to apps created after date (restrictForAppsCreatedAfterDateTime) are exempt from the restriction, so the check fails while any exist. Leave the date unconfigured or set it to 0001-01-01T00:00:00Z, or to a date before your oldest application and service principal.

Related links

• Microsoft Entra admin center - Application policies
• Enforce app management policies in Microsoft Entra ID
• Update tenantAppManagementPolicy
• CIS Microsoft 365 Foundations Benchmark v7.0.0 - 5.1.5.5

Test Metadata

Field	Value
Test ID	CIS.M365.5.1.5.5
Severity	Medium
Suite	CIS
Product	Entra ID
Feature	Applications
Area	Applications and workload identities
Resource type	Tenant
User impact	Low
Implementation cost	Medium
MITRE ATT&CK	T1110.001 Password Guessing, T1110.003 Password Spraying
Supports benchmark	CIS Microsoft 365 Foundations Benchmark (version 7.0.0), requirement 5.1.5.5
Benchmark level	L1
Benchmark profiles	E3 Level 1
Supports controls	cis-m365:5.1.5.5, nist-800-53-r5:IA-5
PowerShell test	Test-MtCisAppPasswordsSystemGenerated
Services	Graph

Source

• Test: tests/cis/Test.CIS.M365.5.1.5.5.ps1
• Documentation: tests/cis/Test.CIS.M365.5.1.5.5.md