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Can I run a domain controller on an Azure VM?

Yes, fully supported by Microsoft. You need a few specific settings, otherwise you get strange replication and performance issues.

Try this first

  1. 1VM size: pick a D-series or E-series with premium SSD for the OS disk and a separate data disk for NTDS.dit, SYSVOL and logs.
  2. 2Disable host caching on the NTDS disk (write caching). DCs expect write-through; otherwise you can get USN rollback on crashes.
  3. 3Static IP via the Azure NIC, not in Windows. In Azure the IP is set at VNet level; doing it in Windows loses the proper DNS config.
  4. 4VNet DNS settings: set the DC itself as primary DNS for the VNet, plus a second DC somewhere (cloud or on-prem via VPN/ExpressRoute).
  5. 5Backup and patching: as on-prem, but via Azure Backup (System State or VM-level). Don't rely on Azure snapshots alone.

When to bring us in

For hybrid setups: deploy VPN or ExpressRoute to on-prem and place the Azure DC in its own AD Site with appropriate link cost. Otherwise it skews client locator choices.

See also

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