Assigning Copilot Licenses

Overview

You’ve planned your deployment, selected your pilot group, and procured your Copilot licenses. Now it’s time to assign those licenses to users and actually enable Copilot.

This video covers three methods for assigning Copilot licenses—from manual assignment for small pilots to group-based licensing and PowerShell for scale—plus how to verify that assignments are working and troubleshoot when they’re not.

What You’ll Learn

• Manual Assignment: Step-by-step in the Microsoft 365 admin center
• Group-Based Licensing: Scalable, auditable assignment through Entra ID groups
• PowerShell: Bulk assignment and automation with Microsoft Graph
• Verification: How to confirm licenses are working and troubleshoot common issues

Script

Hook: assignment is the activation step

Your prerequisites are met. Your licenses are procured. Your pilot group is selected. Now you need to actually assign those Copilot licenses to users.

This is where the plan becomes real. There are three methods to do this: manual assignment in the admin center, group-based licensing through Entra ID, and PowerShell automation. Each has its place. Let’s walk through all three so you can pick the right one for your deployment phase.

Manual assignment in the admin center

For small pilot groups, manual assignment is the quickest way to get started.

Here’s the process. Sign in to the Microsoft 365 admin center at admin.microsoft.com. Navigate to Users, then Active users. Find the user you want to enable and click on their name. Go to the Licenses and apps tab. You’ll see a list of available licenses. Check the box next to Microsoft 365 Copilot and click Save changes.

That’s it for one user. The license is assigned immediately, though it may take up to 24 hours for Copilot features to appear in the user’s applications.

To assign to multiple users, you can select multiple users from the Active users list and use the bulk action to add licenses. This works for groups of up to about 25 users before it becomes tedious and error-prone.

Manual assignment works well for Phase Zero technical validation where you’re enabling Copilot for a handful of IT team members. It also works for very small pilots.

The limitations are real though. Manual assignment doesn’t scale. It’s easy to forget someone or accidentally assign the wrong license. There’s no automatic provisioning when new users join the pilot group. And it doesn’t leave a clean audit trail of who assigned what and when. For anything beyond a small pilot, use one of the next two methods.

Group-based licensing

Group-based licensing is the recommended approach for government Copilot deployments. Here’s how it works.

Instead of assigning licenses to individual users, you assign the license to an Entra ID group. Every user who is a member of that group automatically receives the license. When you add a user to the group, they get Copilot. When you remove them, the license is reclaimed. It’s automatic, scalable, and auditable.

Start by creating a dedicated security group in Entra ID for your Copilot deployment. Name it something clear—like “Copilot Pilot Users” or “M365 Copilot Licensed Users.” Don’t reuse an existing all-staff group unless you want everyone to get Copilot immediately.

To assign the license to the group, go to the Microsoft Entra admin center. Navigate to Groups, select your Copilot group, then go to Licenses. Click Assignments, select Microsoft 365 Copilot, and save.

Now manage Copilot access through group membership. Add your pilot users to the group. As you expand through deployment phases, add more users or nest additional groups.

A few considerations for government environments. Dynamic groups can automatically add users based on attributes like department or job title—useful for Phase Two and Phase Three when you’re expanding by department. However, dynamic membership rules need careful testing to avoid accidentally licensing users who shouldn’t have Copilot yet.

Nested groups work but check for inheritance issues. If Group A is a member of your Copilot group, and Group A contains 500 users, all 500 get Copilot. Make sure nested group memberships match your rollout intent.

Monitor for assignment errors. The Entra admin center shows licensing errors on the group’s License page. Common errors include users who don’t have a qualifying base license or users who have conflicting service plans. Address these before assuming everyone in the group has Copilot.

PowerShell automation

For organizations that prefer scripting or need integration with existing provisioning workflows, PowerShell is the way to go.

You’ll use the Microsoft Graph PowerShell SDK. Install it with Install-Module Microsoft.Graph if you haven’t already. Connect with Connect-MgGraph using an account that has license management permissions.

The basic workflow for bulk assignment is straightforward. Prepare a CSV file with the user principal names of your target users. Write a script that reads the CSV, looks up each user in Entra ID, and assigns the Copilot license using Set-MgUserLicense. Add error handling to catch and log failures—missing base licenses, invalid UPNs, or already-assigned licenses.

PowerShell is the right choice when you need to assign licenses to hundreds of users in a single operation, when you want to integrate license assignment with other provisioning steps, or when you need detailed logging that goes beyond what the admin center provides.

For government environments, make sure your PowerShell scripts are documented, version-controlled, and approved through your change management process. Automated license changes should be as governed as manual ones.

Verification and troubleshooting

After assigning licenses, verify that they’re working.

In the admin center, go to the user’s profile and check the Licenses and apps tab. Microsoft 365 Copilot should show as assigned. If you used group-based licensing, the license source will show the group name rather than “Direct.”

The more important verification is whether Copilot actually appears in the user’s apps. Have your pilot users open Word, Excel, PowerPoint, Outlook, or Teams and look for the Copilot button or icon. In Word and PowerPoint, it appears in the ribbon. In Teams, it appears in the chat sidebar. In Outlook, it appears in the email reading pane.

If Copilot doesn’t appear, check these common issues. First, replication delay. License changes can take up to 24 hours to propagate. Wait a full day before troubleshooting. Second, missing base license. The user must have a qualifying E3 or E5 license in addition to the Copilot add-on. Third, conflicting service plans. Some license combinations create conflicts that prevent Copilot from activating. The admin center flags these—check the user’s license page for error indicators. Fourth, client version. The user’s Microsoft 365 apps must be on a supported version. Older builds won’t show Copilot features even with a valid license.

Close: assignment best practices

Three best practices to close.

Use group-based licensing for any deployment beyond a small pilot. It’s the most scalable, most auditable, and most reliable method for government environments.

Document your assignment method in your governance records. Record which group controls Copilot access, who manages group membership, and what the process is for adding or removing users.

Track assigned versus active. Not every licensed user will use Copilot immediately. Monitor the gap between licenses assigned and users actively engaging with Copilot—that gap is your adoption opportunity.

Sources & References

• Enable users for Microsoft 365 Copilot — Primary guidance for enabling Copilot
• Assign licenses to users in Microsoft 365 — General license assignment guidance
• Assign licenses to a group in Entra ID — Group-based licensing