Password Expiration Policy Has Expired: Microsoft 365 Guidance for 2026

Forced routine password changes are no longer considered a strong security control for Microsoft 365 and Microsoft Entra ID. In 2026, the better approach is to stop expiring passwords on a calendar and instead protect identities with MFA, Conditional Access, passwordless sign-in, risk detection, and rapid response when compromise is suspected.

Why routine password expiration fell out of favor

For years, many organizations required users to change passwords every 30, 60, or 90 days. The intent was good: reduce the time an attacker could use a stolen password. In practice, frequent forced changes often led to weaker behavior. Users created predictable password variations, wrote passwords down, reused passwords across services, or chose simpler passwords that were easier to remember.

Microsoft’s current security direction, aligned with modern identity guidance, is that routine password expiration should not be the primary defense. If there is no evidence that a password has been compromised, forcing a change on a fixed schedule usually adds user friction without meaningfully reducing risk. If a password has been compromised, waiting for the next scheduled expiration is too slow.

The 2026 recommendation: do not expire passwords just because time passed

For Microsoft 365 and Microsoft Entra ID accounts, the practical recommendation is clear: do not require routine password expiration unless a specific regulatory, contractual, or business requirement demands it. Instead, require password changes when there is a reason, such as suspected compromise, a credential leak, a successful phishing event, abnormal sign-in behavior, or exposure of a privileged account.

This does not mean passwords are unimportant. It means password policy should be part of a layered identity security model, not a standalone control. A long, unique password protected by phishing-resistant MFA and monitored sign-in risk is usually better than a frequently changed password protected by nothing else.

When a password should be changed immediately

Password changes still matter in the right situations. Organizations should require an immediate reset when there is evidence or reasonable suspicion of compromise, including leaked credentials, phishing, malware on a user device, suspicious sign-in activity, impossible travel alerts, repeated failed sign-ins, or unauthorized mailbox or file access.

Passwords should also be reviewed for privileged accounts, service accounts, shared legacy accounts, and emergency access or break-glass accounts. Break-glass credentials should be cloud-only, very strongly protected, tightly monitored, excluded only from the controls necessary to preserve emergency access, and rotated after use or according to a documented administrative process.

What to use instead: modern Microsoft identity controls

The modern replacement for routine expiration is layered identity protection. At minimum, Microsoft 365 tenants should enforce multifactor authentication (MFA), block legacy authentication, monitor sign-ins, and apply strong password protection. Smaller organizations may start with Microsoft Security Defaults when they do not yet have a more advanced Conditional Access design.

For mature environments, Conditional Access should enforce access policies based on user, device, location, application, risk, and authentication strength. Microsoft Entra Password Protection can block weak and commonly used passwords, including custom banned password lists based on company name, brands, seasons, and local terms. Smart Lockout helps reduce password spray and brute-force impact. Microsoft Entra ID Protection can detect risky users and risky sign-ins and trigger automated controls where licensing and policy allow.

Move toward phishing-resistant MFA and passwordless sign-in

Not all MFA methods provide the same protection. SMS and voice-based MFA are better than password-only access, but they are weaker than modern, phishing-resistant methods and should be phased out where practical.

Preferred options include FIDO2 security keys, passkeys, Windows Hello for Business, certificate-based authentication where appropriate, and Microsoft Authenticator passwordless sign-in. These methods reduce dependence on memorized passwords and help defend against common phishing and credential replay attacks.

Cloud-only, hybrid, and administrator accounts need different handling

Password expiration can behave differently depending on identity architecture. Cloud-only Microsoft 365 users are governed by Microsoft Entra ID and tenant password settings. Hybrid organizations may still have on-premises Active Directory domain password policies that affect domain-joined sign-ins and synchronized users. Federated environments and legacy applications may introduce additional dependencies.

Administrator accounts deserve separate treatment. Instead of relying on routine expiration, use separate admin identities, least privilege, Microsoft Entra Privileged Identity Management where available, just-in-time elevation, strong MFA or phishing-resistant authentication, sign-in alerting, and regular access reviews. Service accounts should be minimized, documented, monitored, and replaced with managed identities or app registrations where possible.

How to handle auditors and compliance requirements

Auditors may still ask whether passwords expire. The best answer is not simply “no.” The best answer is a documented identity security policy explaining why routine expiration is disabled and what compensating controls are in place: MFA, Conditional Access, banned password lists, password spray protection, risk-based detection, logging, alerting, incident response, privileged access management, and user security training.

Some regulations or customer contracts may still require password expiration. In that case, organizations should meet the requirement while documenting the security tradeoff and strengthening the surrounding controls. Where possible, align policy with current Microsoft guidance, NIST-style modern password practices, and the organization’s actual regulatory obligations.

Practical Microsoft 365 admin checklist

Review your current Microsoft 365 and Microsoft Entra ID password expiration settings. Disable routine expiration where appropriate and permitted. Confirm MFA coverage for all users, especially administrators. Replace per-user MFA with Conditional Access policies where licensing and architecture support it. Block legacy authentication. Review risky users and risky sign-ins. Configure Microsoft Entra Password Protection and Smart Lockout. Evaluate passwordless options such as Windows Hello for Business, passkeys, FIDO2 security keys, and Microsoft Authenticator passwordless sign-in.

Also review licensing. Some advanced capabilities require Microsoft Entra ID P1 or P2, which may be included in plans such as Microsoft 365 Business Premium, E3, E5, or available as add-ons through Microsoft CSP and New Commerce Experience (NCE) subscriptions. The right licensing model depends on tenant size, compliance needs, device strategy, and security maturity.

Key takeaways

• Routine password expiration is no longer recommended as a primary security control for Microsoft 365 and Microsoft Entra ID when there is no evidence of compromise.
• Passwords should be changed immediately after suspected compromise, credential exposure, phishing, privileged account risk, or other security events.
• Modern identity protection should prioritize MFA, Conditional Access, phishing-resistant authentication, passwordless sign-in, banned password lists, Smart Lockout, and sign-in risk monitoring.
• SMS and voice MFA are weaker than phishing-resistant methods such as FIDO2 security keys, passkeys, Windows Hello for Business, and Microsoft Authenticator passwordless sign-in.
• Hybrid Active Directory, cloud-only Microsoft Entra ID, administrator accounts, service accounts, and break-glass accounts require separate password and access-management policies.
• If auditors ask about password expiration, document compensating controls and align the policy with Microsoft guidance, modern password standards, and applicable regulatory requirements.

IT Partner can help you modernize Microsoft 365 identity security with a tenant security assessment, Microsoft Entra ID and Conditional Access design, MFA or passwordless rollout, and licensing guidance for the right Microsoft 365 and Entra capabilities.