Conditional Access policies in Azure AD provide a more granular approach to enforcing MFA based on specific conditions, such as user groups, applications, locations, device platforms, and sign-in risk levels. By creating and applying Conditional Access policies, administrators can define and enforce specific access requirements, including MFA, for users attempting to access resources. For example, a policy can be created to require MFA for users accessing sensitive applications or when they are connecting from an unfamiliar location. Conditional Access policies enable organizations to balance security and productivity by applying MFA only when certain conditions are met, reducing friction for users in low-risk scenarios.

Security defaults are a set of basic security settings provided by Microsoft for organizations that may not have dedicated security teams or resources to manage their security posture. When enabled, security defaults apply a predefined set of security configurations, including MFA, to all users in the organization. With security defaults enabled, MFA is enforced for all users during sign-in, and privileged actions such as registering an application or modifying directory settings also require MFA. While security defaults offer a straightforward approach to enhancing security, they lack the granularity and flexibility of Conditional Access policies.