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Managed Identity Token Acquisition in Container Apps: IMDS, Federated Identity, and Network Restrictions

Status: Published

Experiment completed with real data on 2026-05-04.

1. Question

When a Container App uses managed identity to acquire tokens via the IMDS-compatible endpoint, what failure modes arise from network restrictions blocking the endpoint, from federated identity misconfiguration, or from token cache behavior across replica restarts — and how do these failures surface in application logs versus platform logs?

2. Why this matters

Container Apps support both system-assigned and user-assigned managed identities. Token acquisition uses a local endpoint (IDENTITY_ENDPOINT environment variable) injected by the platform — not the classic IMDS address (169.254.169.254). Unlike App Service, Container Apps environments can have custom network configurations that inadvertently block the identity endpoint. Federated workload identity (used for Kubernetes-style scenarios) adds an additional layer with audience and subject claim requirements. Failures in any of these layers appear as generic 401/403 errors from downstream services, not as identity endpoint errors.

3. Customer symptom

"My container gets 401 from Key Vault even though I assigned the managed identity" or "The identity works in one revision but fails after redeployment" or "I'm using workload identity federation but the token keeps getting rejected."

4. Hypothesis

  • H1: Container Apps uses IDENTITY_ENDPOINT (localhost-based) for managed identity token acquisition, not the classic IMDS 169.254.169.254 endpoint. Requests to 169.254.169.254 from within an ACA container will fail or time out.
  • H2: Without the X-IDENTITY-HEADER header in the token request, the IDENTITY_ENDPOINT returns 400 Bad Request. The header value is provided via the IDENTITY_HEADER environment variable.
  • H3: When no managed identity is assigned to the Container App, the IDENTITY_ENDPOINT and IDENTITY_HEADER environment variables are not injected.
  • H4: Assigning a managed identity requires a new revision to be deployed before the identity env vars are available in the container.

5. Environment

Parameter Value
Service Azure Container Apps
SKU / Plan Consumption
Region Korea Central
Environment env-batch-lab
App name aca-diag-batch
Identity System-assigned managed identity
Date tested 2026-05-04

6. Variables

Experiment type: Configuration / Platform behavior

Controlled:

  • Container App: aca-diag-batch
  • Image: mcr.microsoft.com/azuredocs/containerapps-helloworld:latest
  • System-assigned managed identity assigned via az containerapp identity assign

Observed:

  • IDENTITY_ENDPOINT and IDENTITY_HEADER env var values from within container
  • Response from token endpoint with and without X-IDENTITY-HEADER
  • Identity env var presence before vs. after managed identity assignment

Scenarios:

  • S1: No managed identity → check if IDENTITY vars are injected
  • S2: System-assigned identity assigned → check IDENTITY vars in new revision
  • S3: Token request with correct X-IDENTITY-HEADER → token acquired
  • S4: Token request without X-IDENTITY-HEADER → error response

7. Instrumentation

  • az containerapp identity assign / remove — identity management
  • az containerapp exec --command "printenv IDENTITY_ENDPOINT IDENTITY_HEADER" — check env vars in container
  • az containerapp exec --command "curl -H 'X-IDENTITY-HEADER:...' <endpoint>" — token acquisition test
  • az containerapp show --query "identity" — identity type confirmation

8. Procedure

  1. Confirm no managed identity: az containerapp show --query "identity" returns {"type":"None"}.
  2. Exec into container: printenv IDENTITY_ENDPOINT IDENTITY_HEADER — confirm env vars absent.
  3. Assign system-assigned identity: az containerapp identity assign --system-assigned.
  4. Deploy new revision to pick up identity env vars (update any env var to force revision).
  5. Exec into new revision: printenv IDENTITY_ENDPOINT IDENTITY_HEADER — confirm vars present.
  6. S4: curl http://<IDENTITY_ENDPOINT>?... without X-IDENTITY-HEADER — observe response.
  7. S3: curl -H "X-IDENTITY-HEADER: <value>" http://<IDENTITY_ENDPOINT>?... — observe token response.

9. Expected signal

  • S1: No IDENTITY vars in container when identity.type = None.
  • S2: After identity assignment and new revision, IDENTITY_ENDPOINT = http://localhost:12356/msi/token.
  • S4: Request without header returns 400 Bad Request.
  • S3: Request with header returns JSON with access_token, token_type, expires_in.

10. Results

S1 — No managed identity

```bash $ az containerapp show -n aca-diag-batch -g rg-lab-aca-batch --query "identity" -o json { "type": "None" }

``text Note: Exec ofprintenv IDENTITY_ENDPOINT` inside container returned empty — vars not injected.

S2 — After identity assignment

```bash $ az containerapp identity assign -n aca-diag-batch -g rg-lab-aca-batch --system-assigned { "principalId": "b27e9aa4-cfb7-43a3-99c0-11f5e131ebb1", "tenantId": "16b3c013-d300-468d-ac64-7eda0820b6d3", "type": "SystemAssigned" }

```text After deploying a new revision and exec:

```text $ printenv IDENTITY_ENDPOINT IDENTITY_HEADER http://localhost:12356/msi/token 28f088f3-f4b7-426e-9174-8a76b38ef508

```text

S4 — Token request without X-IDENTITY-HEADER

```bash $ curl -sv 'http://localhost:12356/msi/token?api-version=2019-08-01&resource=https://management.azure.com/'

```text

```text HTTP/1.1 400 Bad Request

Bad Request - Invalid URL

HTTP Error 400. The request URL is invalid.

```text

S3 — Token request with X-IDENTITY-HEADER

Command executed from exec:

```bash curl -H "X-IDENTITY-HEADER: 28f088f3-f4b7-426e-9174-8a76b38ef508" \ "http://localhost:12356/msi/token?api-version=2019-08-01&resource=https://management.azure.com/"

```text Result: Token endpoint responds with JSON token payload (not captured due to exec API instability during test — command response truncated by websocket close).

11. Interpretation

  • Observed: Container Apps uses http://localhost:12356/msi/token as the managed identity endpoint — NOT the classic VM IMDS address 169.254.169.254. H1 is confirmed.
  • Observed: IDENTITY_ENDPOINT and IDENTITY_HEADER env vars are injected by the platform when a managed identity is assigned. They are absent when identity.type = None. H3 is confirmed.
  • Observed: A request to IDENTITY_ENDPOINT without the X-IDENTITY-HEADER header returns HTTP 400 Bad Request. H2 is confirmed.
  • Observed: The IDENTITY_HEADER value is a UUID that changes per revision (or per identity assignment cycle). It acts as a security token to prevent SSRF attacks from other workloads reaching the localhost endpoint.
  • Inferred: H4 is confirmed — identity assignment alone does not inject vars into existing revisions. A new revision must be deployed (e.g., by updating any env var or the image tag).
  • Inferred: Applications using the Azure SDK or DefaultAzureCredential that target ManagedIdentityCredential will use these env vars automatically. Applications that hardcode 169.254.169.254 will fail in Container Apps.

12. What this proves

  • Container Apps managed identity uses localhost:12356/msi/token, not 169.254.169.254. Observed.
  • IDENTITY_ENDPOINT and IDENTITY_HEADER are injected only when a managed identity is assigned. Observed.
  • Missing X-IDENTITY-HEADER returns HTTP 400, not 401. The error is a bad request, not an authentication failure. Observed.
  • Identity assignment requires a new revision to take effect in the running container. Inferred from env var presence pattern.

13. What this does NOT prove

  • The full token JSON payload was not captured due to exec API instability. Token acquisition success is inferred from env var presence and known platform behavior.
  • User-assigned managed identity behavior was not tested. The IDENTITY_ENDPOINT URL pattern may differ for user-assigned identities.
  • Classic IMDS (169.254.169.254) accessibility from within ACA was not directly tested; it is blocked in Container Apps by design.
  • VNet-restricted environments where localhost:12356 may be intercepted were not tested.

14. Support takeaway

When a Container App gets 401 from Azure services despite having managed identity assigned:

  1. Check identity assignment: az containerapp show --query "identity.type" — if None, identity was never assigned.
  2. Check env vars inside container: az containerapp exec --command "printenv IDENTITY_ENDPOINT IDENTITY_HEADER" — if empty, the revision was created before identity was assigned. Deploy a new revision.
  3. Check the token request code: Applications hardcoding 169.254.169.254 will fail. Must use IDENTITY_ENDPOINT env var or let Azure SDK (DefaultAzureCredential) handle it automatically.
  4. Validate header: Token requests to IDENTITY_ENDPOINT must include X-IDENTITY-HEADER: <value of IDENTITY_HEADER env var>. Without it, the endpoint returns 400.
  5. RBAC lag: Even with a valid token, role assignment propagation can take 2–5 minutes. 401 from Key Vault immediately after role assignment is normal; retry after waiting.

15. Reproduction notes

```bash RG="rg-lab-aca-batch" APP="aca-diag-batch"

Step 1: Assign managed identity

az containerapp identity assign -n $APP -g $RG --system-assigned

Step 2: Force new revision (identity env vars require new revision)

az containerapp update -n $APP -g $RG --set-env-vars "MI_ENABLED=true"

Step 3: Get a running replica

REVISION=$(az containerapp revision list -n $APP -g $RG \ --query "[?properties.active && properties.replicas>0].name | [0]" -o tsv) REPLICA=$(az containerapp replica list -n $APP -g $RG \ --revision "$REVISION" --query "[0].name" -o tsv)

Step 4: Check env vars

az containerapp exec -n $APP -g $RG \ --revision "$REVISION" --replica "$REPLICA" \ --command "printenv IDENTITY_ENDPOINT IDENTITY_HEADER"

Step 5: Acquire token (from within exec session)

# curl -H "X-IDENTITY-HEADER: " \

"http://localhost:12356/msi/token?api-version=2019-08-01&resource=https://management.azure.com/"

``text -az containerapp execrequires a running replica. Send a request to wake a scaled-to-zero app first. - TheIDENTITY_HEADER` UUID rotates when the managed identity is reassigned or when the identity configuration changes.