Guest Users Microsoft Entra Business-to-Business (B2B) Collaboration

1. Introduction to Guest Users

Guest Users in Microsoft Entra ID are external identities that are invited into an organization’s tenant to collaborate securely with internal users. These users are commonly vendors, partners, contractors, consultants, customers, or temporary collaborators who require controlled access to organizational resources without becoming full internal employees.

Guest Users are part of Microsoft Entra Business-to-Business (B2B) collaboration. Instead of creating traditional internal accounts for outside individuals, organizations invite external users using their existing identities such as:

Microsoft Accounts
Other Microsoft Entra tenants
Gmail accounts
Federation identities
One-time passcode authentication accounts
A Guest User is identified in Microsoft Entra ID with the User Type: Guest

 Guest formatted as: john_smith_gmail.com#EXT#@contoso.onmicrosoft.com

Default Directory Restrictions
Microsoft intentionally restricts Guests from seeing directory information.
Default Guest limitations include:

Even though Guests have minimal permissions, they are still authenticated identities.
Meaning:
They exist inside your tenant
They consume tokens
They can appear in logs
They can potentially be targeted by attackers

Important Security Exception

Even though Guests have minimal permissions, they are still authenticated identities.
Meaning:
They exist inside your tenant
They consume tokens
They can appear in logs
They can potentially be targeted by attackers

 Therefore: Minimal access does not mean Zero Risk

Default Guest Permissions Setting

Microsoft has a Built-In Setting called:
Guest Users have Limited Access to Properties and Memberships of Directory Objects
This is the recommended default.

Three Guest Permission Models

Most Restrictive
Guests can only access Explicitly Assigned Resources.
Recommended for High-Security Environments.

Limited Access (Default)
Guests can see Limited Directory Information.
Most organizations use this.

Same Access as Members
NOT Recommended.
Guests behave almost like internal users.

High Security Risk.

Azure RBAC Permissions

Guest Users receive NO Azure Permissions unless assigned.
Example:

To grant Azure access:
Azure RBAC assignment required
Example:
New-AzRoleAssignment

Microsoft Teams Example

If invited to Teams:
Guest User can:
Access that Team
Access SharePoint Files
Participate in Chats/Channels

But Cannot:
Access other Teams
Browse Tenant Resources
Become Admin Automatically

Common Misunderstanding

Many Administrators Believe:
Guest User = Harmless
This is incorrect.

Improperly managed Guests can become:
Persistent Attack Vectors
Overshared Collaboration Risks
Shadow Access Identities
Data Leakage Sources

Recommended Security Best Practices

Best Practice Statement

Correct Enterprise Design:

Guest Users should receive Zero Access by Default and only gain explicitly approved access through controlled assignments.

Typical Guest User Access Includes:
Microsoft Teams
SharePoint Online
Onedrive Shared Content
Applications
Azure resources
Power BI
Custom Enterprise Applications
Guest Users help Organizations Collaborate Securely while Maintaining Identity Governance and Access Control.

2. Guest User Architecture

The Guest User Model Includes:

3. Types of Guest User Authentication

Guest Users can authenticate using:

4. Benefits of Guest Users

5. Licensing Requirements

Microsoft uses a Monthly Active User (MAU) Billing Model for External Identities.

6. Guest User Configuration Using Microsoft Entra Portal

Step 1 – Open Microsoft Entra Admin Center

Navigate to:
https://entra.microsoft.com

Step 2 – Navigate to Users

Go to:
Identity
Users
All Users

Step 3 – Create Guest User

Select:
New User
Invite External User

Step 4 – Configure Guest Information

Provide:

Step 5 – Send Invitation

Select:
Invite
The external user receives an Invitation Email.

7. Guest User Redemption Process

The Invited User:
Receives Invitation Email
Clicks Acceptance Link
Authenticates with their External Identity
Accepts Permissions
Gains Access to Assigned Resources

After redemption:
ExternalUserState = Accepted

8. Configure Guest Access Restrictions

Navigate to:
Identity
External Identities
External Collaboration Settings

Key settings include:

9. Configure Guest Users Using PowerShell

Install Microsoft Graph module:
Install-Module Microsoft.Graph -Force
Connect:
Connect-MgGraph -Scopes User.Invite.All
Invite Guest User:

$params = @{
    InvitedUserEmailAddress = "vendor@company.com"
    InviteRedirectUrl = "https://myapplications.microsoft.com"
    SendInvitationMessage = $true
    InvitedUserDisplayName = "Vendor Support"
}
New-MgInvitation -BodyParameter $params

View Guest Users:
Get-MgUser -Filter "userType eq 'Guest'"
Remove Guest User:
Remove-MgUser -UserId user@domain.com

10. Managing Guest Users

Guest User management includes:

11. Group-Based Guest User Management

Best practice is to assign Guest Users to groups rather than directly to resources.
Example:

Benefits:
Easier Auditing
Simplified Removal
Centralized Permissions
Reduced Configuration Errors

12. Dynamic Groups for Guest Users

Example Dynamic Membership Rule:
(user.userType -eq "Guest")

Useful for:
Conditional Access
Monitoring
Reporting
Governance

13. Conditional Access for Guest Users

Conditional Access is critical for securing Guest Users.
Recommended policies:

Example policy targets:
Include:
Guest or External Users
Exclude:
Emergency Access Accounts

14. Multi-Factor Authentication for Guest Users

Always require MFA for Guest Users.
Recommended approaches:

Authentication Strength example:
Phishing-Resistant MFA

15. Guest User Security Best Practices

Least Privilege Access - Grant Only Minimum Required Permissions.
Avoid Permanent Access - Use Temporary or Time-Bound Access.
Enforce MFA - Require MFA for every Guest User.
Restrict Directory Visibility - Prevent Guests from Enumerating Users/Groups.
Use Access Reviews - Regularly Validate Active Guest Users.
Monitor Sign-In Activity - Review Unusual Login Patterns.
Block Legacy Authentication - Disable Older Insecure Protocols.
Restrict Guest Invitations - Only Authorized Personnel should invite Guests.
Use Named Locations - Restrict Risky Geographies.
Apply Session Controls - Limit Persistent Sessions.
Use Entitlement Management - Automate Approvals and Expirations.

16. Cross-Tenant Access Settings

Cross-Tenant Access enables trusted collaboration between organizations.

Navigate to:
Identity
External Identities
Cross-tenant Access Settings

Configuration Areas:

17. Guest User Governance

Governance Includes:

18. Access Reviews for Guest Users

Recommended Review Frequency:

Access Reviews help:
Remove inactive accounts
Reduce attack surface
Maintain compliance
Validate business need

19. Entitlement Management

Entitlement Management Automates:
Access requests
Approval workflows
Expiration dates
Resource assignment
Re-certification

Example Access Package:

20. Ongoing Management of Guest User Accounts

Ongoing management is one of the most important areas of external identity security.

Daily Tasks

Weekly Tasks

Monthly Tasks

Quarterly Tasks

21. Monitoring and Auditing Guest Users

Monitoring Locations:
Microsoft Entra Admin Center
Monitoring
Sign-in Logs

Important Monitoring Fields:

22. Common Security Risks with Guest Users

23. Recommended Guest User Design Model

Recommended Architecture:

Guest User
    ↓
Assigned to Security Group
    ↓
Conditional Access Policies Applied
       ↓
MFA Enforcement
      ↓
Least Privilege Access
      ↓
Access Reviews
      ↓
Automatic Expiration

24. Guest User Lifecycle

25. Guest User Cleanup Best Practices

Remove Guest Users when:
Project ends
Vendor contract expires
User inactive for long periods
No recent sign-ins
Access no longer required
Example PowerShell cleanup query:
Get-MgUser -Filter "userType eq 'Guest'"
Inactive sign-in analysis:
Get-MgAuditLogSignIn

26. Do’s and Don’ts

27. Real-World Use Cases

28. Recommended Enterprise Security Baseline

29. Conclusion

Guest Users are a critical component of secure enterprise collaboration in Microsoft Entra ID. Proper configuration, governance, and continuous monitoring are essential to prevent external identities from becoming a major attack surface.

A mature Guest User strategy should include:
Strong Authentication
Least Privilege Access
Conditional Access Enforcement
Lifecycle Automation
Continuous Auditing
Access Reviews
Expiration Controls
Centralized Governance

Organizations that properly manage Guest Users significantly reduce security risk while enabling efficient and secure collaboration with external partners and vendors.