M365 Changelog: Create “Nested” Groups with Azure AD Dynamic Groups (preview)

MC394932  — This feature will help you better manage group memberships by allowing you to build dynamic Azure AD Security Groups and Microsoft 365 groups based on other groups. For example, you can now create Dynamic-Group-A with members of Group-X and Group-Y.

The groups that define the membership of the dynamic group can be any group type represented in Azure Active Directory, such as user or device security groups, Microsoft 365 groups, and groups synced from on-premises. Unlike existing nested security groups today, memberOf dynamic groups return a flat list of members, so they can be used for licensing assignment and application assignment.  

When this will happen:

This feature is now available in Public Preview. 

How this will affect your organization:

With this preview, admins can configure dynamic groups with the memberOf attribute in the Azure portal, Microsoft Graph, and PowerShell. Security groups, Microsoft 365 groups, and groups that are synced from on-premises Active Directory, can all be added as members of these dynamic groups and to a single group. For example, the dynamic group could be a security group, but you can use Microsoft 365 groups, security groups, and groups that are synced from on-premises to define its membership.

What you need to do to prepare:

There is nothing you need to do to prepare for this change. You may want to notify your users about this change and update your training and documentation as appropriate.

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Additional information