Managing Entra ID objects with Terraform and Topaz

This tutorial walks through managing Entra ID (Azure Active Directory) resources locally using Terraform's azuread provider with Topaz as the identity backend.

You will learn:

• How to configure the azuread provider to point at Topaz
• How to create and destroy users, groups, applications, and service principals
• How to combine azurerm and azuread in a single Terraform project
• Common gotchas specific to Entra ID emulation

What you will build

By the end of this tutorial, Terraform will create and then destroy:

• An Entra application registration
• A service principal linked to that application
• A security group
• A user account

All operations run locally against Topaz — no real Azure or Entra resources are created.

Prerequisites

• Topaz installed and running
• DNS setup completed (see Getting started)
• Topaz certificate trusted by your OS and tooling (see Getting started)
• Terraform installed (terraform --version)
• Azure CLI installed and configured for Topaz (see Azure CLI integration)

Step 1: Start Topaz

Start Topaz with a stable tenant and subscription ID:

topaz start \
  --tenant-id 50717675-3E5E-4A1E-8CB5-C62D8BE8CA48 \
  --default-subscription 00000000-0000-0000-0000-000000000001 \
  --log-level Information

Keep Topaz running for the rest of this tutorial.

Step 2: Create a Terraform project

Create a working directory:

mkdir -p topaz-entra-tutorial
cd topaz-entra-tutorial

Create providers.tf:

terraform {
  required_version = ">= 1.6.0"

  required_providers {
    azuread = {
      source  = "hashicorp/azuread"
      version = "~> 3.0"
    }
  }
}

provider "azuread" {
  # Host and port only — do not include https://
  metadata_host = "topaz.local.dev:8899"
}

The azuread provider redirects all Microsoft Graph API calls to Topaz as soon as metadata_host is set. No other endpoint overrides are needed.

Step 3: Create Entra resources

Create main.tf with an application, service principal, group, and user:

# Application registration
resource "azuread_application" "app" {
  display_name = "my-local-app"
}

# Service principal backed by the application above
resource "azuread_service_principal" "sp" {
  client_id = azuread_application.app.client_id
}

# Security group
resource "azuread_group" "devs" {
  display_name     = "local-developers"
  security_enabled = true
}

# User account
resource "azuread_user" "alice" {
  user_principal_name   = "alice@mytenant.onmicrosoft.com"
  display_name          = "Alice"
  password              = "P@ssw0rd!"
  force_password_change = false
}

output "app_client_id" {
  value = azuread_application.app.client_id
}

output "sp_object_id" {
  value = azuread_service_principal.sp.object_id
}

output "group_object_id" {
  value = azuread_group.devs.object_id
}

output "user_upn" {
  value = azuread_user.alice.user_principal_name
}

Step 4: Run the Terraform workflow

Initialize:

terraform init

Plan:

terraform plan -out tfplan

Apply:

terraform apply -auto-approve tfplan

Terraform should report four resources created and print the output values.

Step 5: Verify with Azure CLI

Confirm the objects exist in Topaz:

# List applications
az ad app list --display-name my-local-app --output table

# List service principals
az ad sp list --display-name my-local-app --output table

# List groups
az ad group list --display-name local-developers --output table

# Show user
az ad user show --id alice@mytenant.onmicrosoft.com --output table

Step 6: Clean up

terraform destroy -auto-approve

Terraform will remove the service principal before the application because of the dependency declared through client_id.

Combining azuread with azurerm

If you need both Entra and ARM resources in the same project, add azurerm to the required_providers block and configure both providers:

terraform {
  required_version = ">= 1.6.0"

  required_providers {
    azurerm = {
      source  = "hashicorp/azurerm"
      version = "= 4.67.0"
    }
    azuread = {
      source  = "hashicorp/azuread"
      version = "~> 3.0"
    }
  }
}

provider "azurerm" {
  features {}
  metadata_host                   = "topaz.local.dev:8899"
  resource_provider_registrations = "none"
}

provider "azuread" {
  metadata_host = "topaz.local.dev:8899"
}

Both providers use the same metadata_host value and authenticate via the same Azure CLI session.

Common gotchas

1) metadata_host includes a scheme

Symptom: Terraform errors with a malformed endpoint such as https://https://...

Fix: Use metadata_host = "topaz.local.dev:8899" — host and port only, no https://.

2) unexpected number of service principals returned

Symptom:

Error: Could not list existing service principals
unexpected number of service principals returned (expected: 1, received: N)

Cause: The azuread provider looks up a service principal by appId using a $filter query when reading existing state. If Topaz has leftover service principals from a previous run, it may return multiple results.

Fix: Run terraform destroy to clean up the previous run, or clear the Topaz state directory (.topaz/), then re-apply.

3) AZURE_CORE_INSTANCE_DISCOVERY not set

Symptom: Azure CLI authentication fails during terraform apply because the CLI tries to contact login.microsoftonline.com.

Fix:

export AZURE_CORE_INSTANCE_DISCOVERY=false

Set this before running any Terraform command when using Topaz as the auth endpoint.

4) TLS certificate errors

Symptom: CERTIFICATE_VERIFY_FAILED from the CLI or Terraform provider.

Fix: Ensure the Topaz certificate is trusted. See Getting started and Azure CLI integration.

5) User principal name domain mismatch

Symptom: Terraform applies successfully but Azure CLI queries return no results for a UPN.

Cause: The UPN domain (@mytenant.onmicrosoft.com) must match the tenant configured in Topaz (or simply be any consistent domain — Topaz does not validate it against real DNS).

Fix: Use a consistent domain suffix across all users in the same project. The domain itself does not need to exist.

Next steps

• Assign users to groups using azuread_group_member
• Combine Entra objects with Key Vault access policies in a single Terraform project
• See Terraform integration for full provider reference