Welcome to the third episode. In this chapter, we’ll cover how to enable and configure the Dynamics 365 ERP MCP Server, including prerequisites, feature activation, allowed client configuration, and the required setup to work with external models from Copilot Studio.
🌱 ENABLING AND CONFIGURING THE DYNAMICS 365 ERP MCP
There are already many blogs and videos explaining how to enable the Dynamics 365 ERP MCP, so in this article we’ll focus on what usually saves the most time: the prerequisites and the key checks to make sure the configuration is correct from the start.
Once these checks are done, we’re ready to get hands-on.
First, the steps to enable it:
🌿 D365 FnO version must be at least 10.0.46 (10.0.2428.15).
🌿 From FnO, we need to enable the feature Dynamics 365 ERP Model Context Protocol:
🌿 Since we’ll be working with Copilot Studio, we need to verify that MCP is enabled from D365 FnO:
System administration >> Setup >> Allowed MCP clients
🌿 In the previous blog we mentioned that we’ll be working with an external model (from Anthropic). To be able to use the Claude Sonnet model, we need to enable the option to use external models from the Admin Center:
Step 1: From Data access, select ‘AI providers for other language models’:
Step 2: Select ‘Allow provider’:
Step 3: Wait less than a minute… and that’s it!:
🌿 Finally, and this is very important. always check in PPAC that all Copilot-related applications in the environment are updated to the latest version.
🌱 ADDITIONAL RESOURCES
I’m also sharing a few more blogs that explain how to enable it, in case you want to dive deeper and explore further:
🌿Dynamicspedia by Andre: https://dynamicspedia.com/2025/11/how-to-set-up-the-new-dynamics-365-erp-mcp-server/
🌿 Consejos Dynamics by Mariano: https://www.consejos-dynamics.com/post/que-es-mcp-como-instalarlo-para-f-o
🌿 Ramit on YouTube: https://www.youtube.com/watch?v=-BEX5OobeNU
I hope everything makes sense up to this point, because in the next chapter we move on to the most anticipated part: building and connecting with Episode 4: Create and Connect: Copilot Studio + MCP Server 👉🏻