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Active Directory Security Groups vs. Microsoft 365 Groups: What to Use and When

AD security groups grant permissions to resources; Microsoft 365 Groups connect people to collaboration services. Choose based on the resource, membership, and management model.
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Use an Active Directory (AD) security group to grant permissions or user rights on on-premises network resources. Use a Microsoft 365 Group when people need a shared collaboration space—such as a group inbox and calendar, SharePoint library, Planner plan, or Teams membership. The key question is what the group must do, not which name sounds more secure.

What is the difference between a security group and a Microsoft 365 Group?

They are different group types built for different default jobs. An AD security group gathers accounts so administrators can assign resource permissions or user rights to the group instead of managing access account by account. A Microsoft 365 Group connects people to collaboration services. Microsoft describes the latter as “Microsoft 365 Groups that are used for collaboration between users, both inside and outside your company.” Microsoft’s group comparison outlines the distinction.

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Question Active Directory security group Microsoft 365 Group
Primary job Assign access permissions or user rights to resources, commonly on-premises. Connect members to Microsoft 365 collaboration services.
Typical outcome Access to a shared folder, printer, or other resource controlled through AD and its permissions. A shared group inbox and calendar, SharePoint document library, Planner, or membership for a Team, depending on configuration and available services.
Scope and access behavior AD DS scopes include Global, Universal, and Domain Local; the right choice depends on the directory and resource design. Behavior depends on the specific service or application. Check its supported group types and membership behavior.

When should I use an Active Directory security group?

Choose an AD security group when the permission target is an on-premises resource or an AD user right. For example, an administrator can grant a group access to a shared folder or printer, then manage who receives that access by changing group membership. Microsoft documents security groups as a way to assign permissions to shared resources. See Microsoft’s overview of AD security groups.

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Before creating one, decide which AD DS scope fits the forest and resource design. Global, Universal, and Domain Local groups have different membership and permission-use rules; none is universally correct. Microsoft’s scope guidance should be applied to the environment rather than reduced to a one-size-fits-all rule.

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When should I use a Microsoft 365 Group?

Use a Microsoft 365 Group when members need a shared Microsoft 365 work space rather than access alone. Group-connected services can include shared email and calendar, a SharePoint document library, and Planner. A Team uses a Microsoft 365 Group for its membership, and that group also provides members access to the Team’s parent SharePoint site. Microsoft explains the connected services, and documents the Teams relationship.

The services available to a group depend on your organization’s subscription and licensing context. Confirm that the services you intend to use are included and enabled before choosing the group type. Microsoft’s comparison describes the group options and service context.

Can a Microsoft 365 Group also control access?

Sometimes. Microsoft documents security-enabled Microsoft 365 Groups for scenarios that need both collaboration and access control. That does not make them a universal substitute for security groups: Microsoft says they are not supported for assigning permissions to Exchange shared mailboxes, where mail-enabled security groups should continue to be used. Check the target resource’s supported group types before relying on a Microsoft 365 Group for authorization. Microsoft’s group concepts documentation covers group capabilities and limitations.

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Which group should I use for cloud resource access?

For access to a Microsoft Entra or SaaS resource, evaluate the group types that the target application supports. Microsoft Entra security groups are used to manage access to shared resources, while Microsoft 365 Groups are collaboration-oriented. Do not assume every application handles every group type, membership type, or nested group identically. Microsoft documents Entra group types and membership considerations.

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What should I check before choosing?

  1. Identify the target. Is it an on-premises AD DS resource, a Microsoft Entra or SaaS resource, or a Microsoft 365 collaboration service?
  2. Define the outcome. Is access the only need, or do members also need a shared inbox, calendar, SharePoint library, Planner, or Teams membership?
  3. Check who or what must be a member. Confirm whether the design needs users, devices, service principals, or nested groups. Supported member types differ among Entra group types; verify the target application’s requirements. Microsoft’s Entra group documentation describes these distinctions.
  4. Check scope and nesting. For AD DS, select Global, Universal, or Domain Local scope to fit the forest and resource design. For Entra groups, confirm how the application treats nested groups rather than assuming nested membership grants effective access.
  5. Establish who manages the group. Determine whether it is cloud-managed or synchronized from on-premises AD. Groups synchronized from on-premises AD can only be managed on-premises; follow Microsoft’s source-of-authority guidance for the exact group type and scenario. Read Microsoft’s group source-of-authority guidance.
  6. Verify services and governance. Confirm that the organization’s subscription and configuration support the intended Microsoft 365 services, and decide who is allowed to create and manage groups. Microsoft’s comparison documentation describes the available group options.

Quick decision guide

  • On-premises folder, printer, or AD user right: use an AD security group when its scope and management model fit the environment.
  • Shared Microsoft 365 collaboration space: use a Microsoft 365 Group when members need its connected services.
  • Teams membership tied to SharePoint access: use the Microsoft 365 Group behind the Team.
  • Cloud or SaaS authorization: use a group type supported by that resource, and verify membership and nesting behavior.
  • Hybrid-synchronized group: establish its source of authority first; synchronized groups have on-premises management constraints.
  • Exchange shared mailbox permissions: do not use a security-enabled Microsoft 365 Group for this purpose; Microsoft’s guidance calls for a mail-enabled security group.

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