At the moment, this isn’t supported directly.
When you create a Dataverse connection using a service principal, you must enter the Client ID, Client Secret, and Tenant ID. The client secret is then saved as part of that connection.
The connection cannot automatically read or refresh the secret from:
- Azure Key Vault
- A Dataverse Environment Variable with the Secret data type
Secret environment variables can be used inside apps, flows, or custom integrations, but they cannot be used to authenticate or automatically update the Dataverse connection itself.
So, when the Infra team rotates the client secret, the Dataverse connection will also need to be updated or recreated with the new secret. You can automate that process through an Azure DevOps pipeline, deployment script, or Power Platform API, but the connection will not automatically pick up the new secret on its own.
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