diff --git a/oauthenticator/azuread.py b/oauthenticator/azuread.py
index bd7bb9ad..2a223663 100644
--- a/oauthenticator/azuread.py
+++ b/oauthenticator/azuread.py
@@ -9,6 +9,7 @@
 from jupyterhub.auth import LocalAuthenticator
 from tornado.httpclient import HTTPRequest
 from traitlets import default
+from traitlets import List
 from traitlets import Unicode
 
 from .oauth2 import OAuthenticator
@@ -50,6 +51,22 @@ def _token_url_default(self):
             self.tenant_id
         )
 
+    allowed_groups = List(
+        Unicode(),
+        config=True,
+        help="Automatically allow members of selected groups",
+    )
+
+    admin_groups = List(
+        Unicode(),
+        config=True,
+        help="Groups whose members should have Jupyterhub admin privileges",
+    )
+
+    @staticmethod
+    def check_user_in_groups(member_groups, allowed_groups):
+        return bool(set(member_groups) & set(allowed_groups))
+
     async def authenticate(self, handler, data=None):
         code = handler.get_argument("code")
 
@@ -94,6 +111,15 @@ async def authenticate(self, handler, data=None):
         # results in a decoded JWT for the user data
         auth_state['user'] = decoded
 
+        groups = self.allowed_groups + self.admin_groups
+        if groups:
+            ad_groups = decoded.get('groups')
+            if self.check_user_in_groups(ad_groups, groups):
+                userdict['admin'] = self.check_user_in_groups(
+                    ad_groups, self.admin_groups
+                )
+            else:
+                userdict = None
         return userdict
 
 
diff --git a/oauthenticator/tests/test_azuread.py b/oauthenticator/tests/test_azuread.py
index 35c8a2bf..5055325e 100644
--- a/oauthenticator/tests/test_azuread.py
+++ b/oauthenticator/tests/test_azuread.py
@@ -3,10 +3,12 @@
 import re
 import time
 import uuid
+from functools import partial
 from unittest import mock
 
 import jwt
 import pytest
+from pytest import fixture
 
 from ..azuread import AzureAdOAuthenticator
 from .mocks import setup_oauth_mock
@@ -19,26 +21,30 @@ def test_tenant_id_from_env():
         assert aad.tenant_id == tenant_id
 
 
-def user_model(tenant_id, client_id, name):
+def user_model(tenant_id, client_id, name, **kwargs):
     """Return a user model"""
     # model derived from https://docs.microsoft.com/en-us/azure/active-directory/develop/id-tokens#v20
     now = int(time.time())
+
+    user = {
+        "ver": "2.0",
+        "iss": f"https://login.microsoftonline.com/{tenant_id}/v2.0",
+        "sub": "AAAAAAAAAAAAAAAAAAAAAIkzqFVrSaSaFHy782bbtaQ",
+        "aud": client_id,
+        "exp": now + 3600,
+        "iat": now,
+        "nbf": now,
+        "name": name,
+        "preferred_username": name,
+        "oid": str(uuid.uuid1()),
+        "tid": tenant_id,
+        "nonce": "123523",
+        "aio": "Df2UVXL1ix!lMCWMSOJBcFatzcGfvFGhjKv8q5g0x732dR5MB5BisvGQO7YWByjd8iQDLq!eGbIDakyp5mnOrcdqHeYSnltepQmRp6AIZ8jY",
+    }
+    user.update(kwargs)
+
     id_token = jwt.encode(
-        {
-            "ver": "2.0",
-            "iss": f"https://login.microsoftonline.com/{tenant_id}/v2.0",
-            "sub": "AAAAAAAAAAAAAAAAAAAAAIkzqFVrSaSaFHy782bbtaQ",
-            "aud": client_id,
-            "exp": now + 3600,
-            "iat": now,
-            "nbf": now,
-            "name": name,
-            "preferred_username": name,
-            "oid": str(uuid.uuid1()),
-            "tid": tenant_id,
-            "nonce": "123523",
-            "aio": "Df2UVXL1ix!lMCWMSOJBcFatzcGfvFGhjKv8q5g0x732dR5MB5BisvGQO7YWByjd8iQDLq!eGbIDakyp5mnOrcdqHeYSnltepQmRp6AIZ8jY",
-        },
+        user,
         os.urandom(5),
     ).decode("ascii")
 
@@ -48,6 +54,15 @@ def user_model(tenant_id, client_id, name):
     }
 
 
+def _get_authenticator(**kwargs):
+    return AzureAdOAuthenticator(
+        tenant_id=str(uuid.uuid1()),
+        client_id=str(uuid.uuid1()),
+        client_secret=str(uuid.uuid1()),
+        **kwargs,
+    )
+
+
 @pytest.fixture
 def azure_client(client):
     setup_oauth_mock(
@@ -59,6 +74,11 @@ def azure_client(client):
     return client
 
 
+@fixture
+def get_authenticator(azure_client, **kwargs):
+    return partial(_get_authenticator, http_client=azure_client)
+
+
 @pytest.mark.parametrize(
     'username_claim',
     [
@@ -68,12 +88,8 @@ def azure_client(client):
         'preferred_username',
     ],
 )
-async def test_azuread(username_claim, azure_client):
-    authenticator = AzureAdOAuthenticator(
-        tenant_id=str(uuid.uuid1()),
-        client_id=str(uuid.uuid1()),
-        client_secret=str(uuid.uuid1()),
-    )
+async def test_azuread(get_authenticator, username_claim, azure_client):
+    authenticator = get_authenticator()
     if username_claim:
         authenticator.username_claim = username_claim
 
@@ -95,3 +111,53 @@ async def test_azuread(username_claim, azure_client):
 
     name = user_info['name']
     assert name == jwt_user[authenticator.username_claim]
+
+
+@pytest.mark.parametrize(
+    'allowed_groups,admin_groups,azuread_groups,expected',
+    [
+        (
+            [],
+            ['jupyterhub-admin'],
+            ['jupyterhub-admin'],
+            lambda r: bool(r) and r['admin'],
+        ),
+        ([], ['jupyterhub-admin'], ['jupyter-admin'], lambda r: not bool(r)),
+        (['jupyterhub'], [], ['jupyterhub'], lambda r: bool(r) and not r['admin']),
+        (['jupyterhub'], [], ['jupyter'], lambda r: not bool(r)),
+        ([], [], ['jupyterhub'], lambda r: bool(r)),
+        (
+            ['jupyterhub'],
+            ['jupyterhub-admin'],
+            ['jupyterhub', 'jupyterhub-admin'],
+            lambda r: bool(r) and r['admin'],
+        ),
+        (['jupyterhub'], [], [], lambda r: not bool(r)),
+        ([], [], [], lambda r: bool(r) and r.get('admin') is None),
+    ],
+)
+async def test_azuread_groups(
+    get_authenticator,
+    azure_client,
+    allowed_groups,
+    admin_groups,
+    azuread_groups,
+    expected,
+):
+    authenticator = get_authenticator(
+        scope=['openid', 'profile'],
+        allowed_groups=allowed_groups,
+        admin_groups=admin_groups,
+    )
+
+    handler = azure_client.handler_for_user(
+        user_model(
+            tenant_id=authenticator.tenant_id,
+            client_id=authenticator.client_id,
+            name="somebody",
+            groups=azuread_groups,
+        )
+    )
+
+    r = await authenticator.authenticate(handler)
+    assert expected(r)