Automate Secret Rotation with Azure Functions and Key Vault

Secrets — database passwords, API keys, connection strings — are among the most sensitive assets in any cloud environment, and leaving them static creates a growing security risk. Azure Key Vault provides centralized secret storage with access policies, audit logging, and expiration tracking, but secrets still need to be rotated regularly to limit the blast radius of a compromise. By combining Key Vault with Event Grid and Azure Functions, you can build a fully automated rotation pipeline that detects expiring secrets and replaces them without manual intervention or application downtime.

In this lab, you will create a Key Vault and store secrets with defined expiration periods, deploy an Azure Function with managed identity that responds to SecretNearExpiry events, implement rotation logic that generates new secret versions, and verify the complete rotation lifecycle end-to-end.

Objectives

Upon completing this Intermediate level lab, you will be able to:

• Create an Azure Key Vault and store a secret with a defined expiration period
• Deploy an Azure Function App with a system-assigned managed identity
• Write an Event Grid-triggered function that responds to SecretNearExpiry events from Key Vault
• Implement rotation logic that generates a new secret version and updates Key Vault
• Configure an Event Grid subscription linking Key Vault near-expiry events to the Function App
• Verify the end-to-end secret rotation lifecycle by triggering and observing an automated rotation

Who is this lab for?

• Cloud Engineers and DevOps Practitioners who need to implement automated secret lifecycle management
• Security Engineers looking to enforce zero-downtime credential rotation policies
• Developers who want to understand event-driven architecture patterns using Functions and Event Grid
• Azure Architects designing secure and scalable secret management solutions in Azure