diff --git a/README.md b/README.md
index 215877b..13fd3f9 100644
--- a/README.md
+++ b/README.md
@@ -36,7 +36,10 @@ python3 -m venv .venv
 source .venv/bin/activate
 pip install -r requirements.txt
 ```
-Set up the `OPENAI_API_KEY` environment variable (for OpenAI) or the `AZURE_OPENAI_API_KEY`, `AZURE_API_VERSION` and `AZURE_API_BASE` environment variables (for Azure OpenAI).  
+Set up the `OPENAI_API_KEY` environment variable (for OpenAI) 
+or the `AZURE_OPENAI_API_KEY`, `AZURE_API_VERSION` and `AZURE_API_BASE` environment variables (for Azure OpenAI)
+or `AZURE_API_VERSION` and `AZURE_API_BASE` environment variables + `az login` for Azure OpenAI with Managed Entra.
+
 You can then run the optillm proxy as follows.
 
 ```bash
diff --git a/optillm.py b/optillm.py
index 1044b7a..f3b4eb7 100644
--- a/optillm.py
+++ b/optillm.py
@@ -31,11 +31,24 @@
     API_KEY = os.environ.get("OPENAI_API_KEY")
     default_client = OpenAI(api_key=API_KEY)
 else:
-    default_client = AzureOpenAI(
-        api_key=os.environ.get("AZURE_OPENAI_API_KEY"),
-        api_version=os.environ.get("AZURE_API_VERSION"),
-        azure_endpoint=os.environ.get("AZURE_API_BASE"),
-)
+    API_KEY = os.environ.get("AZURE_OPENAI_API_KEY")
+    API_VERSION = os.environ.get("AZURE_API_VERSION")
+    AZURE_ENDPOINT = os.environ.get("AZURE_API_BASE")
+    if API_KEY is not None:
+        default_client = AzureOpenAI(
+            api_key=API_KEY,
+            api_version=API_VERSION,
+            azure_endpoint=AZURE_ENDPOINT,
+        )
+    else:
+        from azure.identity import DefaultAzureCredential, get_bearer_token_provider
+        azure_credential = DefaultAzureCredential()
+        token_provider = get_bearer_token_provider(azure_credential, "https://cognitiveservices.azure.com/.default")
+        default_client = AzureOpenAI(
+            api_version=API_VERSION,
+            azure_endpoint=AZURE_ENDPOINT,
+            azure_ad_token_provider=token_provider
+        )
 
 # Server configuration
 server_config = {
diff --git a/requirements.txt b/requirements.txt
index 2bbd104..834a056 100644
--- a/requirements.txt
+++ b/requirements.txt
@@ -3,4 +3,5 @@ networkx
 openai
 z3-solver
 aiohttp
-flask
\ No newline at end of file
+flask
+azure.identity
\ No newline at end of file