diff --git a/nanobot/cli/commands.py b/nanobot/cli/commands.py
index aca0778..2d0f3c2 100644
--- a/nanobot/cli/commands.py
+++ b/nanobot/cli/commands.py
@@ -203,6 +203,7 @@ def _make_provider(config: Config):
     from nanobot.providers.custom_provider import CustomProvider
     from nanobot.providers.litellm_provider import LiteLLMProvider
     from nanobot.providers.openai_codex_provider import OpenAICodexProvider
+    from nanobot.providers.azure_openai_provider import AzureOpenAIProvider
 
     model = config.agents.defaults.model
     provider_name = config.get_provider_name(model)
@@ -220,6 +221,20 @@ def _make_provider(config: Config):
             default_model=model,
         )
 
+    # Azure OpenAI: direct Azure OpenAI endpoint with deployment name
+    if provider_name == "azure_openai":
+        if not p or not p.api_key or not p.api_base:
+            console.print("[red]Error: Azure OpenAI requires api_key and api_base.[/red]")
+            console.print("Set them in ~/.nanobot/config.json under providers.azure_openai section")
+            console.print("Use the model field to specify the deployment name.")
+            raise typer.Exit(1)
+        
+        return AzureOpenAIProvider(
+            api_key=p.api_key,
+            api_base=p.api_base,
+            default_model=model,
+        )
+
     from nanobot.providers.registry import find_by_name
     spec = find_by_name(provider_name)
     if not model.startswith("bedrock/") and not (p and p.api_key) and not (spec and spec.is_oauth):
diff --git a/nanobot/config/schema.py b/nanobot/config/schema.py
index 1f2f946..44c7446 100644
--- a/nanobot/config/schema.py
+++ b/nanobot/config/schema.py
@@ -266,6 +266,7 @@ class ProvidersConfig(Base):
     """Configuration for LLM providers."""
 
     custom: ProviderConfig = Field(default_factory=ProviderConfig)  # Any OpenAI-compatible endpoint
+    azure_openai: ProviderConfig = Field(default_factory=ProviderConfig)  # Azure OpenAI (model = deployment name)
     anthropic: ProviderConfig = Field(default_factory=ProviderConfig)
     openai: ProviderConfig = Field(default_factory=ProviderConfig)
     openrouter: ProviderConfig = Field(default_factory=ProviderConfig)
diff --git a/nanobot/providers/__init__.py b/nanobot/providers/__init__.py
index b2bb2b9..5bd06f9 100644
--- a/nanobot/providers/__init__.py
+++ b/nanobot/providers/__init__.py
@@ -3,5 +3,6 @@
 from nanobot.providers.base import LLMProvider, LLMResponse
 from nanobot.providers.litellm_provider import LiteLLMProvider
 from nanobot.providers.openai_codex_provider import OpenAICodexProvider
+from nanobot.providers.azure_openai_provider import AzureOpenAIProvider
 
-__all__ = ["LLMProvider", "LLMResponse", "LiteLLMProvider", "OpenAICodexProvider"]
+__all__ = ["LLMProvider", "LLMResponse", "LiteLLMProvider", "OpenAICodexProvider", "AzureOpenAIProvider"]
diff --git a/nanobot/providers/azure_openai_provider.py b/nanobot/providers/azure_openai_provider.py
new file mode 100644
index 0000000..25580ac
--- /dev/null
+++ b/nanobot/providers/azure_openai_provider.py
@@ -0,0 +1,192 @@
+"""Azure OpenAI provider implementation with API version 2024-10-21."""
+
+from __future__ import annotations
+
+import uuid
+from typing import Any
+from urllib.parse import urljoin
+
+import httpx
+import json_repair
+
+from nanobot.providers.base import LLMProvider, LLMResponse, ToolCallRequest
+
+
+class AzureOpenAIProvider(LLMProvider):
+    """
+    Azure OpenAI provider with API version 2024-10-21 compliance.
+    
+    Features:
+    - Hardcoded API version 2024-10-21
+    - Uses model field as Azure deployment name in URL path
+    - Uses api-key header instead of Authorization Bearer
+    - Uses max_completion_tokens instead of max_tokens
+    - Direct HTTP calls, bypasses LiteLLM
+    """
+
+    def __init__(
+        self,
+        api_key: str = "",
+        api_base: str = "",
+        default_model: str = "gpt-5.2-chat",
+    ):
+        super().__init__(api_key, api_base)
+        self.default_model = default_model
+        self.api_version = "2024-10-21"
+        
+        # Validate required parameters
+        if not api_key:
+            raise ValueError("Azure OpenAI api_key is required")
+        if not api_base:
+            raise ValueError("Azure OpenAI api_base is required")
+        
+        # Ensure api_base ends with /
+        if not api_base.endswith('/'):
+            api_base += '/'
+        self.api_base = api_base
+
+    def _build_chat_url(self, deployment_name: str) -> str:
+        """Build the Azure OpenAI chat completions URL."""
+        # Azure OpenAI URL format:
+        # https://{resource}.openai.azure.com/openai/deployments/{deployment}/chat/completions?api-version={version}
+        base_url = self.api_base
+        if not base_url.endswith('/'):
+            base_url += '/'
+        
+        url = urljoin(
+            base_url, 
+            f"openai/deployments/{deployment_name}/chat/completions"
+        )
+        return f"{url}?api-version={self.api_version}"
+
+    def _build_headers(self) -> dict[str, str]:
+        """Build headers for Azure OpenAI API with api-key header."""
+        return {
+            "Content-Type": "application/json",
+            "api-key": self.api_key,  # Azure OpenAI uses api-key header, not Authorization
+            "x-session-affinity": uuid.uuid4().hex,  # For cache locality
+        }
+
+    def _prepare_request_payload(
+        self,
+        messages: list[dict[str, Any]],
+        tools: list[dict[str, Any]] | None = None,
+        model: str | None = None,
+        max_tokens: int = 4096,
+        temperature: float = 0.7,
+        reasoning_effort: str | None = None,
+    ) -> dict[str, Any]:
+        """Prepare the request payload with Azure OpenAI 2024-10-21 compliance."""
+        payload: dict[str, Any] = {
+            "messages": self._sanitize_empty_content(messages),
+            "max_completion_tokens": max(1, max_tokens),  # Azure API 2024-10-21 uses max_completion_tokens
+            "temperature": temperature,
+        }
+
+        if reasoning_effort:
+            payload["reasoning_effort"] = reasoning_effort
+
+        if tools:
+            payload["tools"] = tools
+            payload["tool_choice"] = "auto"
+
+        return payload
+
+    async def chat(
+        self,
+        messages: list[dict[str, Any]],
+        tools: list[dict[str, Any]] | None = None,
+        model: str | None = None,
+        max_tokens: int = 4096,
+        temperature: float = 0.7,
+        reasoning_effort: str | None = None,
+    ) -> LLMResponse:
+        """
+        Send a chat completion request to Azure OpenAI.
+
+        Args:
+            messages: List of message dicts with 'role' and 'content'.
+            tools: Optional list of tool definitions in OpenAI format.
+            model: Model identifier (used as deployment name).
+            max_tokens: Maximum tokens in response (mapped to max_completion_tokens).
+            temperature: Sampling temperature.
+            reasoning_effort: Optional reasoning effort parameter.
+
+        Returns:
+            LLMResponse with content and/or tool calls.
+        """
+        deployment_name = model or self.default_model
+        url = self._build_chat_url(deployment_name)
+        headers = self._build_headers()
+        payload = self._prepare_request_payload(
+            messages, tools, model, max_tokens, temperature, reasoning_effort
+        )
+
+        try:
+            async with httpx.AsyncClient() as client:
+                response = await client.post(url, headers=headers, json=payload)
+                if response.status_code != 200:
+                    return LLMResponse(
+                        content=f"Azure OpenAI API Error {response.status_code}: {response.text}",
+                        finish_reason="error",
+                    )
+                
+                response_data = await response.json()
+                return self._parse_response(response_data)
+
+        except Exception as e:
+            return LLMResponse(
+                content=f"Error calling Azure OpenAI: {str(e)}",
+                finish_reason="error",
+            )
+
+    def _parse_response(self, response: dict[str, Any]) -> LLMResponse:
+        """Parse Azure OpenAI response into our standard format."""
+        try:
+            choice = response["choices"][0]
+            message = choice["message"]
+
+            tool_calls = []
+            if message.get("tool_calls"):
+                for tc in message["tool_calls"]:
+                    # Parse arguments from JSON string if needed
+                    args = tc["function"]["arguments"]
+                    if isinstance(args, str):
+                        args = json_repair.loads(args)
+
+                    tool_calls.append(
+                        ToolCallRequest(
+                            id=tc["id"],
+                            name=tc["function"]["name"],
+                            arguments=args,
+                        )
+                    )
+
+            usage = {}
+            if response.get("usage"):
+                usage_data = response["usage"]
+                usage = {
+                    "prompt_tokens": usage_data.get("prompt_tokens", 0),
+                    "completion_tokens": usage_data.get("completion_tokens", 0),
+                    "total_tokens": usage_data.get("total_tokens", 0),
+                }
+
+            reasoning_content = message.get("reasoning_content") or None
+
+            return LLMResponse(
+                content=message.get("content"),
+                tool_calls=tool_calls,
+                finish_reason=choice.get("finish_reason", "stop"),
+                usage=usage,
+                reasoning_content=reasoning_content,
+            )
+
+        except (KeyError, IndexError) as e:
+            return LLMResponse(
+                content=f"Error parsing Azure OpenAI response: {str(e)}",
+                finish_reason="error",
+            )
+
+    def get_default_model(self) -> str:
+        """Get the default model (also used as default deployment name)."""
+        return self.default_model
\ No newline at end of file
diff --git a/nanobot/providers/registry.py b/nanobot/providers/registry.py
index df915b7..93a1138 100644
--- a/nanobot/providers/registry.py
+++ b/nanobot/providers/registry.py
@@ -81,6 +81,16 @@ PROVIDERS: tuple[ProviderSpec, ...] = (
         is_direct=True,
     ),
 
+    # === Azure OpenAI (direct API calls with API version 2024-10-21) =====
+    ProviderSpec(
+        name="azure_openai",
+        keywords=("azure", "azure-openai"),
+        env_key="",
+        display_name="Azure OpenAI",
+        litellm_prefix="",
+        is_direct=True,
+    ),
+
     # === Gateways (detected by api_key / api_base, not model name) =========
     # Gateways can route any model, so they win in fallback.
 
diff --git a/tests/test_azure_openai_provider.py b/tests/test_azure_openai_provider.py
new file mode 100644
index 0000000..54338b9
--- /dev/null
+++ b/tests/test_azure_openai_provider.py
@@ -0,0 +1,356 @@
+"""Test Azure OpenAI provider implementation (updated for model-based deployment names)."""
+
+import asyncio
+import pytest
+from unittest.mock import AsyncMock, patch
+
+from nanobot.providers.azure_openai_provider import AzureOpenAIProvider
+from nanobot.providers.base import LLMResponse
+
+
+def test_azure_openai_provider_init():
+    """Test AzureOpenAIProvider initialization without deployment_name."""
+    provider = AzureOpenAIProvider(
+        api_key="test-key",
+        api_base="https://test-resource.openai.azure.com",
+        default_model="gpt-4o-deployment",
+    )
+    
+    assert provider.api_key == "test-key"
+    assert provider.api_base == "https://test-resource.openai.azure.com/"
+    assert provider.default_model == "gpt-4o-deployment"
+    assert provider.api_version == "2024-10-21"
+
+
+def test_azure_openai_provider_init_validation():
+    """Test AzureOpenAIProvider initialization validation."""
+    # Missing api_key
+    with pytest.raises(ValueError, match="Azure OpenAI api_key is required"):
+        AzureOpenAIProvider(api_key="", api_base="https://test.com")
+    
+    # Missing api_base
+    with pytest.raises(ValueError, match="Azure OpenAI api_base is required"):
+        AzureOpenAIProvider(api_key="test", api_base="")
+
+
+def test_build_chat_url():
+    """Test Azure OpenAI URL building with different deployment names."""
+    provider = AzureOpenAIProvider(
+        api_key="test-key",
+        api_base="https://test-resource.openai.azure.com",
+        default_model="gpt-4o",
+    )
+    
+    # Test various deployment names
+    test_cases = [
+        ("gpt-4o-deployment", "https://test-resource.openai.azure.com/openai/deployments/gpt-4o-deployment/chat/completions?api-version=2024-10-21"),
+        ("gpt-35-turbo", "https://test-resource.openai.azure.com/openai/deployments/gpt-35-turbo/chat/completions?api-version=2024-10-21"),
+        ("custom-model", "https://test-resource.openai.azure.com/openai/deployments/custom-model/chat/completions?api-version=2024-10-21"),
+    ]
+    
+    for deployment_name, expected_url in test_cases:
+        url = provider._build_chat_url(deployment_name)
+        assert url == expected_url
+
+
+def test_build_chat_url_api_base_without_slash():
+    """Test URL building when api_base doesn't end with slash."""
+    provider = AzureOpenAIProvider(
+        api_key="test-key",
+        api_base="https://test-resource.openai.azure.com",  # No trailing slash
+        default_model="gpt-4o",
+    )
+    
+    url = provider._build_chat_url("test-deployment")
+    expected = "https://test-resource.openai.azure.com/openai/deployments/test-deployment/chat/completions?api-version=2024-10-21"
+    assert url == expected
+
+
+def test_build_headers():
+    """Test Azure OpenAI header building with api-key authentication."""
+    provider = AzureOpenAIProvider(
+        api_key="test-api-key-123",
+        api_base="https://test-resource.openai.azure.com",
+        default_model="gpt-4o",
+    )
+    
+    headers = provider._build_headers()
+    assert headers["Content-Type"] == "application/json"
+    assert headers["api-key"] == "test-api-key-123"  # Azure OpenAI specific header
+    assert "x-session-affinity" in headers
+
+
+def test_prepare_request_payload():
+    """Test request payload preparation with Azure OpenAI 2024-10-21 compliance."""
+    provider = AzureOpenAIProvider(
+        api_key="test-key",
+        api_base="https://test-resource.openai.azure.com",
+        default_model="gpt-4o",
+    )
+    
+    messages = [{"role": "user", "content": "Hello"}]
+    payload = provider._prepare_request_payload(messages, max_tokens=1500, temperature=0.8)
+    
+    assert payload["messages"] == messages
+    assert payload["max_completion_tokens"] == 1500  # Azure API 2024-10-21 uses max_completion_tokens
+    assert payload["temperature"] == 0.8
+    assert "tools" not in payload
+    
+    # Test with tools
+    tools = [{"type": "function", "function": {"name": "get_weather", "parameters": {}}}]
+    payload_with_tools = provider._prepare_request_payload(messages, tools=tools)
+    assert payload_with_tools["tools"] == tools
+    assert payload_with_tools["tool_choice"] == "auto"
+    
+    # Test with reasoning_effort
+    payload_with_reasoning = provider._prepare_request_payload(messages, reasoning_effort="medium")
+    assert payload_with_reasoning["reasoning_effort"] == "medium"
+
+
+@pytest.mark.asyncio
+async def test_chat_success():
+    """Test successful chat request using model as deployment name."""
+    provider = AzureOpenAIProvider(
+        api_key="test-key",
+        api_base="https://test-resource.openai.azure.com",
+        default_model="gpt-4o-deployment",
+    )
+    
+    # Mock response data
+    mock_response_data = {
+        "choices": [{
+            "message": {
+                "content": "Hello! How can I help you today?",
+                "role": "assistant"
+            },
+            "finish_reason": "stop"
+        }],
+        "usage": {
+            "prompt_tokens": 12,
+            "completion_tokens": 18,
+            "total_tokens": 30
+        }
+    }
+    
+    with patch("httpx.AsyncClient") as mock_client:
+        mock_response = AsyncMock()
+        mock_response.status_code = 200
+        mock_response.json = AsyncMock(return_value=mock_response_data)
+        
+        mock_context = AsyncMock()
+        mock_context.post = AsyncMock(return_value=mock_response)
+        mock_client.return_value.__aenter__.return_value = mock_context
+        
+        # Test with specific model (deployment name)
+        messages = [{"role": "user", "content": "Hello"}]
+        result = await provider.chat(messages, model="custom-deployment")
+        
+        assert isinstance(result, LLMResponse)
+        assert result.content == "Hello! How can I help you today?"
+        assert result.finish_reason == "stop"
+        assert result.usage["prompt_tokens"] == 12
+        assert result.usage["completion_tokens"] == 18
+        assert result.usage["total_tokens"] == 30
+        
+        # Verify URL was built with the provided model as deployment name
+        call_args = mock_context.post.call_args
+        expected_url = "https://test-resource.openai.azure.com/openai/deployments/custom-deployment/chat/completions?api-version=2024-10-21"
+        assert call_args[0][0] == expected_url
+
+
+@pytest.mark.asyncio
+async def test_chat_uses_default_model_when_no_model_provided():
+    """Test that chat uses default_model when no model is specified."""
+    provider = AzureOpenAIProvider(
+        api_key="test-key",
+        api_base="https://test-resource.openai.azure.com",
+        default_model="default-deployment",
+    )
+    
+    mock_response_data = {
+        "choices": [{
+            "message": {"content": "Response", "role": "assistant"},
+            "finish_reason": "stop"
+        }],
+        "usage": {"prompt_tokens": 5, "completion_tokens": 5, "total_tokens": 10}
+    }
+    
+    with patch("httpx.AsyncClient") as mock_client:
+        mock_response = AsyncMock()
+        mock_response.status_code = 200
+        mock_response.json = AsyncMock(return_value=mock_response_data)
+        
+        mock_context = AsyncMock()
+        mock_context.post = AsyncMock(return_value=mock_response)
+        mock_client.return_value.__aenter__.return_value = mock_context
+        
+        messages = [{"role": "user", "content": "Test"}]
+        await provider.chat(messages)  # No model specified
+        
+        # Verify URL was built with default model as deployment name
+        call_args = mock_context.post.call_args
+        expected_url = "https://test-resource.openai.azure.com/openai/deployments/default-deployment/chat/completions?api-version=2024-10-21"
+        assert call_args[0][0] == expected_url
+
+
+@pytest.mark.asyncio
+async def test_chat_with_tool_calls():
+    """Test chat request with tool calls in response."""
+    provider = AzureOpenAIProvider(
+        api_key="test-key",
+        api_base="https://test-resource.openai.azure.com",
+        default_model="gpt-4o",
+    )
+    
+    # Mock response with tool calls
+    mock_response_data = {
+        "choices": [{
+            "message": {
+                "content": None,
+                "role": "assistant",
+                "tool_calls": [{
+                    "id": "call_12345",
+                    "function": {
+                        "name": "get_weather",
+                        "arguments": '{"location": "San Francisco"}'
+                    }
+                }]
+            },
+            "finish_reason": "tool_calls"
+        }],
+        "usage": {
+            "prompt_tokens": 20,
+            "completion_tokens": 15,
+            "total_tokens": 35
+        }
+    }
+    
+    with patch("httpx.AsyncClient") as mock_client:
+        mock_response = AsyncMock()
+        mock_response.status_code = 200
+        mock_response.json = AsyncMock(return_value=mock_response_data)
+        
+        mock_context = AsyncMock()
+        mock_context.post = AsyncMock(return_value=mock_response)
+        mock_client.return_value.__aenter__.return_value = mock_context
+        
+        messages = [{"role": "user", "content": "What's the weather?"}]
+        tools = [{"type": "function", "function": {"name": "get_weather", "parameters": {}}}]
+        result = await provider.chat(messages, tools=tools, model="weather-model")
+        
+        assert isinstance(result, LLMResponse)
+        assert result.content is None
+        assert result.finish_reason == "tool_calls"
+        assert len(result.tool_calls) == 1
+        assert result.tool_calls[0].name == "get_weather"
+        assert result.tool_calls[0].arguments == {"location": "San Francisco"}
+
+
+@pytest.mark.asyncio
+async def test_chat_api_error():
+    """Test chat request API error handling."""
+    provider = AzureOpenAIProvider(
+        api_key="test-key",
+        api_base="https://test-resource.openai.azure.com",
+        default_model="gpt-4o",
+    )
+    
+    with patch("httpx.AsyncClient") as mock_client:
+        mock_response = AsyncMock()
+        mock_response.status_code = 401
+        mock_response.text = "Invalid authentication credentials"
+        
+        mock_context = AsyncMock()
+        mock_context.post = AsyncMock(return_value=mock_response)
+        mock_client.return_value.__aenter__.return_value = mock_context
+        
+        messages = [{"role": "user", "content": "Hello"}]
+        result = await provider.chat(messages)
+        
+        assert isinstance(result, LLMResponse)
+        assert "Azure OpenAI API Error 401" in result.content
+        assert "Invalid authentication credentials" in result.content
+        assert result.finish_reason == "error"
+
+
+@pytest.mark.asyncio
+async def test_chat_connection_error():
+    """Test chat request connection error handling."""
+    provider = AzureOpenAIProvider(
+        api_key="test-key",
+        api_base="https://test-resource.openai.azure.com",
+        default_model="gpt-4o",
+    )
+    
+    with patch("httpx.AsyncClient") as mock_client:
+        mock_context = AsyncMock()
+        mock_context.post = AsyncMock(side_effect=Exception("Connection failed"))
+        mock_client.return_value.__aenter__.return_value = mock_context
+        
+        messages = [{"role": "user", "content": "Hello"}]
+        result = await provider.chat(messages)
+        
+        assert isinstance(result, LLMResponse)
+        assert "Error calling Azure OpenAI: Connection failed" in result.content
+        assert result.finish_reason == "error"
+
+
+def test_parse_response_malformed():
+    """Test response parsing with malformed data."""
+    provider = AzureOpenAIProvider(
+        api_key="test-key",
+        api_base="https://test-resource.openai.azure.com",
+        default_model="gpt-4o",
+    )
+    
+    # Test with missing choices
+    malformed_response = {"usage": {"prompt_tokens": 10}}
+    result = provider._parse_response(malformed_response)
+    
+    assert isinstance(result, LLMResponse)
+    assert "Error parsing Azure OpenAI response" in result.content
+    assert result.finish_reason == "error"
+
+
+def test_get_default_model():
+    """Test get_default_model method."""
+    provider = AzureOpenAIProvider(
+        api_key="test-key",
+        api_base="https://test-resource.openai.azure.com",
+        default_model="my-custom-deployment",
+    )
+    
+    assert provider.get_default_model() == "my-custom-deployment"
+
+
+if __name__ == "__main__":
+    # Run basic tests
+    print("Running basic Azure OpenAI provider tests...")
+    
+    # Test initialization
+    provider = AzureOpenAIProvider(
+        api_key="test-key",
+        api_base="https://test-resource.openai.azure.com",
+        default_model="gpt-4o-deployment",
+    )
+    print("✅ Provider initialization successful")
+    
+    # Test URL building
+    url = provider._build_chat_url("my-deployment")
+    expected = "https://test-resource.openai.azure.com/openai/deployments/my-deployment/chat/completions?api-version=2024-10-21"
+    assert url == expected
+    print("✅ URL building works correctly")
+    
+    # Test headers
+    headers = provider._build_headers()
+    assert headers["api-key"] == "test-key"
+    assert headers["Content-Type"] == "application/json"
+    print("✅ Header building works correctly")
+    
+    # Test payload preparation
+    messages = [{"role": "user", "content": "Test"}]
+    payload = provider._prepare_request_payload(messages, max_tokens=1000)
+    assert payload["max_completion_tokens"] == 1000  # Azure 2024-10-21 format
+    print("✅ Payload preparation works correctly")
+    
+    print("✅ All basic tests passed! Updated test file is working correctly.")
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