You can create an unlicensed application user in your environment. This application user will be given access to your environment’s data on behalf of the user who’s using your application.

Note: In an environment, you can only have one application user for each Azure AD–registered application.

Follow the below steps to create an Application User in Dynamics 365 CE online environment.

Pre-requisite: Follow the below article and Register an App in Azure AD.

How to Register an App in Azure Active Directory for Dynamics 365 CE Online?

Or

If you have already registered an App in Azure Active Directory, then go to Step 1.

Step 1: Login to Power Platform Admin Center (PPAC) with your credentials.

If you are using US Government (GCC, GCC High and DOD) Cloud, click on the article link and find your related URL and login to PPAC.

Step 2: Click on Environments.

Step 3: Click on required Environment, where you would like to create an Application User.

Step 4: Click on Settings.

Step 5: Click on Users + permissions to expand.

Step 6: Click on Application users.

Step 7: Click on New app user or Setup app user.

Step 8: Click on Add an app.

Step 9: Select the required app and Click on Add.

Step 10: Choose the required Business Unit.

Step 11: Click on Security roles edit button.

Step 12: Choose the required security role and Click on Save.

In this example, I am selecting System Administrator.

Note: In general scenarios, do not provide System Administrator access to the Application user, instead create a customized security role(s) that restricts access to the limited data of your application.

Step 13: Click on Create.

Application user has been created successfully.

Hope you have successfully followed the steps and created the Application user in Dynamics 365 CE environment online.

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