Senior Member

Disk encryption is a basic data protection method for physical & virtual hard disks. It falls under physical data security and it prevents data breaches from stolen hard disks (physical & virtual). 

Similar to on-premises Windows servers and computers, we can use BitLocker to encrypt Windows VM running on Azure. For Linux VMs, we can use DM-Crypt to encrypt virtual disks. More details about BitLocker is available here on Microsoft Docs. Azure VM encryption uses the Azure Key Vault to store encryption keys and secrets. 


In this post, I am going to demonstrate how we can encrypt Azure Linux VM.




Be sure your Azure VM configurations comply with following prior to moving forward: 

  • Azure disk encryption for Linux VM is only going to work if you are running Azure-endorsed Linux distribution such as,
    • Ubuntu 14.04.5, 16.04, 18.04
    • RHEL 6.7, 6.8, 7.2, 7.3, 7.4, 7.5, 7.6
    • CentOS 6.8, 7.2n, 7.3, 7.4, 7.5, 7.6
    • openSUSE 42.3
    • SLES 12-SP3, 12-SP4
  • If you encrypting OS & Data volume in Linux VM and its root (/) file system usage is 4GB or less you need a minimum of 8GB Ram. Also, if root (/) file system usage is more than 4GB, it needs 2 * (/root file system usage). This is only required during the initial encryption process. 
  • Azure Linux VM must have dm-crypt & vfat modules running.
  • Data disks of Linux VM (which required encryption) must be listed under /etc/fstab correctly. 

This demo will be using PowerShell. Please make sure you have the latest Azure PowerShell module installed


Step 1: Setup Resource Group


The first step of the configuration is to create a new resource group. 

1. Launch PowerShell console and connect to Azure using Connect-AzAccount



2. Then create a new resource group using, 


New-AzResourceGroup -Name REBELRG1 -Location "East US"


In the above, REBELRG1 is the resource group name and East US is the resource group location.



Step 2: Configure Azure Key Vault


Next, we need to create a new key vault and encryption key. 

1. As the first step, let's go ahead and enable Azure Key Vault provider within the subscription by using, 


Register-AzResourceProvider -ProviderNamespace "Microsoft.KeyVault"


2. Then, we go ahead with Azure Vault setup,


New-AzKeyVault -Location "East US" -ResourceGroupName REBELRG1 -VaultName REBELVMKV1 -EnabledForDiskEncryption


In the above, REBELVMKV1 is the key vault name and it is created under REBELRG1 resource group which we created in the previous step. -EnabledForDiskEncryption is used to prepare the key vault to use with disk encryption.




3. Then we need to create access policy so currently logged in user can create encryption keys. 


Set-AzKeyVaultAccessPolicy -VaultName REBELVMKV1 -ObjectId xxxxxxxxxxxxxxxx -PermissionsToKeys create,import,delete,list,get -PermissionsToSecrets set,delete -PassThru


In above objectid should replace with the actual objectid value of the currently logged in global admin account. In here -PermissionsToKeys define the permissions allocated for keys and -PermissionsToSecrets defines the permissions allocated for secrets.




4. Now we need a new encryption key to use with disk encryption. 


Add-AzKeyVaultKey -VaultName REBELVMKV1 -Name "REBELVMKey" -Destination "Software"



In the above, REBELVMKey is the key name. -Destination is defined as Software as we creating the standard encryption key. If required it can be set to Hardware Security Model (HSM) but it comes with additional cost.


Step 4: Create VM


In this demo, I am going to create a new VM for encryption testing. It is not a must; we still can encrypt any existing VM. 

To create new VM I am using,


$mylogin = Get-Credential

New-AzVm -ResourceGroupName REBELRG1 -Name "REBELVM01" -Location "eastus" -VirtualNetworkName "REBELVNET1" -SubnetName "REBELVMSubnet1" -PublicIpAddressName "REBELVM01IP1" -OpenPorts 22 -Image Canonical:UbuntuServer:16.04-LTS:latest -Size Standard_D2s_v3 -Credential $mylogin


In the above, REBELVM01 is the VM name. It is running UbuntuServer:16.04 edition. I have specified it using -Image parameter. It also using Standard_D2s_v3 vm size.




Step 5: Encrypt VM


The next step of the configuration is to encrypt the VM. To do that we need the following values,

  • Azure Key Vault Resource ID
  • Azure Key Vault URI
  • Azure Key vault key ID

We can find Key Vault Resource ID & Key Vault URI values using,


Get-AzKeyVault -VaultName REBELVMKV1 -ResourceGroupName REBELRG1 | fl




We can find Key vault key ID using,


Get-AzKeyVaultKey -VaultName rebelvmkv1 -Name REBELVMKey




Now we can go ahead with the encryption by running the following cmdlet:


Set-AzVMDiskEncryptionExtension -ResourceGroupName REBELRG1 -VMName "REBELVM01" -DiskEncryptionKeyVaultUrl (value of Azure Key Vault URI) -DiskEncryptionKeyVaultId (value of Azure Key Vault Resource ID) -KeyEncryptionKeyUrl (value of Azure Key vault key ID) -KeyEncryptionKeyVaultId (value of Azure Key Vault Resource ID) -VolumeType All –SkipVmBackup


Be sure to replace the parameter values according to your setup in the cmdlet above. In there -VolumeType defines which type of disks need to be encrypted. In this demo I am encrypting OS & Data disks.


VMBackup extension is a recovery safeguard for encrypted disks. However, this is not compatible with the managed disks. Therefore, the encryption will fail if you not using –SkipVmBackup



Once encryption is completed, VM will be rebooted. 


Step 6: Verification


Once the reboot is completed, we can verify the encryption status using:


Get-AzVmDiskEncryptionStatus -VMName REBELVM01 -ResourceGroupName REBELRG1



Also, when viewing VM properties | Disks, the encryption is enabled as expected.



As we can see the encryption for Azure Linux VM is working as expected.