Information
This policy setting configures which directory Windows LAPS will use to back up the local admin account password.
The recommended state for this setting is: Enabled: Active Directory or Enabled: Azure Active Directory
Note: Organizations that utilize third-party commercial software to manage unique & complex local Administrator passwords on domain members may opt to disregard these LAPS recommendations.
Note #2: Windows LAPS does not support standalone computers - they must be joined to an Active Directory domain or Entra ID (formerly Azure Active Directory).
Note #3: Windows LAPS does not support simultaneous storage of the local admin password in both directory types.
Note #4: If the setting is configured and the managed device is not joined to the configured directory type, the local administrator password will not be managed by Windows LAPS.
Due to the difficulty in managing local Administrator passwords, many organizations choose to use the same password on all workstations and/or Member Servers when deploying them. This creates a serious attack surface security risk because if an attacker manages to compromise one system and learn the password to its local Administrator account, then they can leverage that account to instantly gain access to all other computers that also use that password for their local Administrator account.
Solution
To establish the recommended configuration via GP, set the following UI path to Enabled: Active Directory or Enabled: Azure Active Directory :
Computer Configuration\Policies\Administrative Templates\System\LAPS\Configure password backup directory
Note: This Group Policy path may not exist by default. It is provided by the Group Policy template LAPS.admx/adml that is included with the Microsoft Windows 11 Release 22H2 Administrative Templates v3.0 (or newer).
Impact:
The passwords managed by Windows LAPS will only be retrievable from the configured directory type.