Bulk Create Microsoft 365 Dynamic Membership Groups Using Graph PowerShell

Managing dynamic membership groups one by one in the Microsoft 365 admin center can quickly become tedious—especially in large environments. A much better approach is to automate the process and create multiple dynamic Microsoft 365 groups in bulk using Microsoft Graph PowerShell.

In this article, we’ll walk through a simple and effective Graph PowerShell script that reads group details from a CSV file and creates Microsoft 365 (Unified) dynamic membership groups in bulk.

Prerequisites

Before running the script, ensure the following:

• Microsoft Graph PowerShell module is installed
• You are connected to Microsoft Graph with appropriate permissions:
• Group.ReadWrite.All
• Directory.ReadWrite.All

Connect-MgGraph -Scopes "Group.ReadWrite.All","Directory.ReadWrite.All"

CSV File Format

The script reads group information from a CSV file. Your CSV must include the following columns:

DisplayName,Description,MailNickname,MembershipRule
HR – Employees,Dynamic group for HR users,hremployees,(user.department -eq "HR")
IT – Users,Dynamic group for IT users,itusers,(user.department -eq "IT")
US Users,All users located in the US,ususers,(user.country -eq "United States")
                            

Column Explanation

Column	Description
DisplayName	Display name of the Microsoft 365 group
Description	Description of the group
MailNickname	Unique mail alias (no spaces)
MembershipRule	Dynamic membership rule

The Script

Below is the exact script used to bulk create dynamic Microsoft 365 groups by reading data from a CSV file.

$CsvPath = "D:\DynamicM365Groups.csv" 

$Groups = Import-Csv $CsvPath

foreach ($Group in $Groups) {

    Write-Host "Creating group: $($Group.DisplayName)" -ForegroundColor Cyan

    try {
        $Params = @{
            DisplayName                   = $Group.DisplayName
            Description                   = $Group.Description
            GroupTypes                    = @("Unified", "DynamicMembership")
            MailEnabled                   = $true
            MailNickname                  = $Group.MailNickname
            SecurityEnabled               = $false
            MembershipRule                = $Group.MembershipRule
            MembershipRuleProcessingState = "On"
        }

        New-MgGroup -BodyParameter $Params

        Write-Host "✔ Successfully created: $($Group.DisplayName)" -ForegroundColor Green
    }
    catch {
        Write-Host "✖ Failed to create: $($Group.DisplayName)" -ForegroundColor Red
        Write-Host $_.Exception.Message -ForegroundColor Yellow
    }
}
                            

Your CSV file should read as follows with the appropriate headers:

DisplayName,Description,MailNickname,MembershipRule
HR – Full Time Employees,Dynamic group for full-time HR users,hrfte,(user.department -eq "HR") 
IT – Contractors,Dynamic group for IT contractors,itcontract,(user.department -eq "IT") 
US Users One More,All users located in the US,ususersonemore,(user.country -eq "USA")
                            

How the Script Works

Let’s break this down in simple terms:

1. CSV Import
• The script reads group details from a CSV file using Import-Csv.
2. Loop Through Each Group
• Each row in the CSV represents one dynamic Microsoft 365 group.
3. Build the Group Parameters
• The -BodyParameter hashtable defines:
• Group type (Unified + DynamicMembership)
• Mail settings
• Membership rule
• Rule processing state
4. Create the Group
• New-MgGroup creates the Microsoft 365 group and applies the dynamic membership rule.
5. Error Handling
• If group creation fails, the error is caught and displayed without stopping the script.

Further Enhancements

Once you’re comfortable with this script, you can extend it in several useful ways:

• Pre-check if a group already exists (to avoid duplicates)
• Export created group IDs for reporting or auditing
• Add a “WhatIf” / dry-run mode
• Validate membership rules before attempting creation
• Log results to a CSV or text file

These enhancements are especially useful when running the script in production tenants.

Possible Errors & Solutions

Error	Cause	Solution
Duplicate MailNickname Error	Another object with the same value for property mailNickname already exists	Ensure MailNickname values in the CSV are unique across the tenant.
Invalid Membership Rule	DynamicGroupQueryParseError	Verify that the membership rule uses only supported dynamic rule attributes and correct syntax.
Insufficient Permissions	Insufficient privileges to complete the operation	Reconnect to Microsoft Graph with Group.ReadWrite.All and Directory.ReadWrite.All permissions.

Conclusion

Bulk creating Microsoft 365 dynamic membership groups using Graph PowerShell is a clean, repeatable, and admin-friendly approach—especially when combined with CSV input. This script keeps things simple, avoids unnecessary complexity, and works well for real-world tenant management.

If you manage multiple departments, regions, or user categories, this approach can save significant time while ensuring consistency across your Microsoft 365 environment.