Add Entra OAuth proxy (via FastMCP AzureAuthProvider) and automated Entra app registration

.vscode/mcp.json

@@ -30,4 +30,4 @@
 		},
 	},
 	"inputs": []
-}
+}

AGENTS.md

@@ -0,0 +1,31 @@
+# Instructions for coding agents
+
+## Adding a new azd environment variable
+
+An azd environment variable is stored by the azd CLI for each environment. It is passed to the "azd up" command and can configure both provisioning options and application settings.
+
+When adding new azd environment variables, update these files:
+
+1. **infra/main.parameters.json**: Add the new parameter mapping from azd env variable to Bicep parameter
+   - Use format `${ENV_VAR_NAME}` for required values
+   - Use format `${ENV_VAR_NAME=default}` for optional values with defaults
+   - Example: `"useEntraProxy": { "value": "${USE_ENTRA_PROXY=false}" }`
+
+2. **infra/main.bicep**: Add the Bicep parameter declaration at the top with `@description`
+   - Use `@secure()` decorator for sensitive values like passwords/secrets
+   - Example: `@description('Flag to enable feature X') param useFeatureX bool = false`
+
+3. **infra/server.bicep** (or other module): If the variable needs to be passed to a container app:
+   - Add a parameter to receive the value from main.bicep
+   - Add the environment variable to the appropriate `env` array (e.g., `baseEnv`, or a conditional array)
+   - For secrets, add to a secrets array and reference via `secretRef`
+
+4. **infra/main.bicep**: Pass the parameter value to the module
+   - Example: `featureXEnabled: useFeatureX ? someValue : ''`
+
+5. **infra/write_env.sh** and **infra/write_env.ps1**: If the variable should be written to `.env` for local development:
+   - Add a line to echo/write the value from `azd env get-value`
+   - For conditional values, wrap in an if block to only write when populated
+
+6. **infra/main.bicep outputs**: If the value needs to be stored back in azd env after provisioning:
+   - Add an output (note: `@secure()` parameters cannot be outputs)

README.md

@@ -16,6 +16,7 @@ A demonstration project showcasing Model Context Protocol (MCP) implementations
 - [Deploy to Azure](#deploy-to-azure)
 - [Deploy to Azure with private networking](#deploy-to-azure-with-private-networking)
 - [Deploy to Azure with Keycloak authentication](#deploy-to-azure-with-keycloak-authentication)
+- [Deploy to Azure with Entra OAuth Proxy](#deploy-to-azure-with-entra-oauth-proxy)
 
 ## Getting started
 
@@ -360,3 +361,83 @@ This project supports deploying with OAuth 2.0 authentication using Keycloak as
 | DCR | Open (anonymous) | Require initial access token | Any client can register without auth |
 
 > **Note:** Keycloak must be publicly accessible because its URL is dynamically generated by Azure. Token issuer validation requires a known URL, but the mcproutes URL isn't available until after deployment. Using a custom domain would fix this.
+
+---
+
+## Deploy to Azure with Entra OAuth Proxy
+
+This project supports deploying with Microsoft Entra ID (Azure AD) authentication using FastMCP's built-in Azure OAuth proxy. This is an alternative to Keycloak that uses Microsoft Entra with your Azure tenant for identity management.
+
+### What gets deployed with Entra OAuth
+
+| Component | Description |
+|-----------|-------------|
+| **Microsoft Entra App Registration** | Created automatically during provisioning with redirect URIs for local development, VS Code, and production |
+| **OAuth-protected MCP Server** | FastMCP with AzureProvider for OAuth authentication |
+| **CosmosDB OAuth Client Storage** | Persists OAuth client registrations across server restarts |
+
+### Deployment steps for Entra OAuth
+
+1. Enable Entra OAuth proxy:
+
+   ```bash
+   azd env set USE_FASTMCP_AUTH true
+   ```
+
+2. Deploy to Azure:
+
+   ```bash
+   azd up
+   ```
+
+   During deployment:
+   - **Preprovision hook**: Creates a Microsoft Entra App Registration with a client secret, and stores the credentials in azd environment variables
+   - **Postprovision hook**: Updates the App Registration with the deployed server URL as an additional redirect URI
+
+3. Verify deployment by checking the outputs:
+
+   ```bash
+   azd env get-value MCP_SERVER_URL
+   azd env get-value FASTMCP_AUTH_AZURE_CLIENT_ID
+   ```
+
+### Environment variables
+
+The following environment variables are automatically set by the deployment hooks:
+
+| Variable | Description |
+|----------|-------------|
+| `FASTMCP_AUTH_AZURE_CLIENT_ID` | The App Registration's client ID |
+| `FASTMCP_AUTH_AZURE_CLIENT_SECRET` | The App Registration's client secret |
+| `FASTMCP_AUTH_AZURE_TENANT_ID` | Your Azure tenant ID |
+
+These are written to `.env` by the postprovision hook for local development.
+
+### Testing locally
+
+After deployment, you can test locally with OAuth enabled:
+
+```bash
+# Run the MCP server
+cd servers && uvicorn deployed_mcp:app --host 0.0.0.0 --port 8000
+```
+
+The server will use the Entra App Registration for OAuth and CosmosDB for client storage.
+
+### Connecting VS Code MCP client
+
+The App Registration includes redirect URIs for VS Code:
+
+- `http://localhost:5173/oauth/callback` (VS Code extension localhost)
+- `http://localhost:5174/oauth/callback` (VS Code extension localhost alt port)
+- `https://vscode.dev/redirect` (VS Code web)
+
+Configure your VS Code MCP client to use the deployed server URL with OAuth.
+
+### Troubleshooting Entra OAuth
+
+If you encounter issues with the OAuth flow in VS Code, you can reset the cached authentication state:
+
+1. Open the Command Palette (`Cmd+Shift+P` on macOS, `Ctrl+Shift+P` on Windows/Linux)
+2. Run **"Authentication: Remove Dynamic Authentication Providers"**
+3. This clears any cached OAuth tokens and forces a fresh authentication flow

azure.yaml

@@ -29,12 +29,23 @@ services:
       path: ./agents/Dockerfile
       context: .
 hooks:
+  preprovision:
+    windows:
+      shell: pwsh
+      run: ./infra/auth_init.ps1
+      interactive: true
+      continueOnError: false
+    posix:
+      shell: sh
+      run: ./infra/auth_init.sh
+      interactive: true
+      continueOnError: false
   postprovision:
     posix:
       shell: sh
-      run: ./infra/write_env.sh
+      run: ./infra/write_env.sh && ./infra/auth_update.sh
       continueOnError: true
     windows:
       shell: pwsh
-      run: ./infra/write_env.ps1
+      run: ./infra/write_env.ps1; ./infra/auth_update.ps1
       continueOnError: true

infra/auth_init.ps1

@@ -0,0 +1,11 @@
+# Pre-provision hook to set up Azure/Entra ID app registration for FastMCP OAuth Proxy
+
+# Check if USE_FASTMCP_AUTH is enabled
+$USE_FASTMCP_AUTH = azd env get-value USE_FASTMCP_AUTH 2>$null
+if ($USE_FASTMCP_AUTH -ne "true") {
+    Write-Host "Skipping auth init (USE_FASTMCP_AUTH is not enabled)"
+    exit 0
+}
+
+Write-Host "Setting up Azure/Entra ID app registration for FastMCP OAuth Proxy..."
+python ./infra/fastmcp_auth_init.py

infra/auth_init.sh

@@ -0,0 +1,12 @@
+#!/bin/bash
+# Pre-provision hook to set up Azure/Entra ID app registration for FastMCP OAuth Proxy
+
+# Check if USE_FASTMCP_AUTH is enabled
+USE_FASTMCP_AUTH=$(azd env get-value USE_FASTMCP_AUTH 2>/dev/null || echo "false")
+if [ "$USE_FASTMCP_AUTH" != "true" ]; then
+    echo "Skipping auth init (USE_FASTMCP_AUTH is not enabled)"
+    exit 0
+fi
+
+echo "Setting up Azure/Entra ID app registration for FastMCP OAuth Proxy..."
+python ./infra/fastmcp_auth_init.py

infra/auth_update.ps1

@@ -0,0 +1,11 @@
+# Post-provision hook to update Azure app registration redirect URIs with deployed server URL
+
+# Check if USE_FASTMCP_AUTH is enabled
+$USE_FASTMCP_AUTH = azd env get-value USE_FASTMCP_AUTH 2>$null
+if ($USE_FASTMCP_AUTH -ne "true") {
+    Write-Host "Skipping auth update (USE_FASTMCP_AUTH is not enabled)"
+    exit 0
+}
+
+Write-Host "Updating FastMCP auth redirect URIs with deployed server URL..."
+python ./infra/fastmcp_auth_update.py

infra/auth_update.sh

@@ -0,0 +1,12 @@
+#!/bin/bash
+# Post-provision hook to update Azure app registration redirect URIs with deployed server URL
+
+# Check if USE_FASTMCP_AUTH is enabled
+USE_FASTMCP_AUTH=$(azd env get-value USE_FASTMCP_AUTH 2>/dev/null || echo "false")
+if [ "$USE_FASTMCP_AUTH" != "true" ]; then
+    echo "Skipping auth update (USE_FASTMCP_AUTH is not enabled)"
+    exit 0
+fi
+
+echo "Updating FastMCP auth redirect URIs with deployed server URL..."
+python ./infra/fastmcp_auth_update.py