diff --git a/lib/active_agent/providers/azure/options.rb b/lib/active_agent/providers/azure/options.rb
index 35a0b9b0..9bbaa117 100644
--- a/lib/active_agent/providers/azure/options.rb
+++ b/lib/active_agent/providers/azure/options.rb
@@ -12,13 +12,24 @@ module Azure
       # - Authentication: api-key header instead of Authorization: Bearer
       # - API Version: Required query parameter
       #
-      # @example Configuration
-      #   options = Azure::Options.new(
-      #     api_key: ENV["AZURE_OPENAI_API_KEY"],
-      #     azure_resource: "mycompany",
-      #     deployment_id: "gpt-4-deployment",
-      #     api_version: "2024-10-21"
-      #   )
+      # You can configure Azure OpenAI in two ways:
+      #
+      # 1. Using azure_resource and deployment_id (standard Azure OpenAI):
+      #    @example
+      #      options = Azure::Options.new(
+      #        api_key: ENV["AZURE_OPENAI_API_KEY"],
+      #        azure_resource: "mycompany",
+      #        deployment_id: "gpt-4-deployment",
+      #        api_version: "2024-10-21"
+      #      )
+      #
+      # 2. Using a direct host/base_url (for custom domains or Azure AI Foundry):
+      #    @example
+      #      options = Azure::Options.new(
+      #        api_key: ENV["AZURE_OPENAI_API_KEY"],
+      #        host: "https://mycompany.cognitiveservices.azure.com/openai/deployments/gpt-4",
+      #        api_version: "2024-10-21"
+      #      )
       class Options < ActiveAgent::Providers::OpenAI::Options
         DEFAULT_API_VERSION = "2024-10-21"
 
@@ -26,12 +37,15 @@ class Options < ActiveAgent::Providers::OpenAI::Options
         attribute :deployment_id,  :string
         attribute :api_version,    :string, fallback: DEFAULT_API_VERSION
 
-        validates :azure_resource, presence: true
-        validates :deployment_id, presence: true
+        validates :azure_resource, presence: true, unless: :explicit_host_provided?
+        validates :deployment_id, presence: true, unless: :explicit_host_provided?
 
         def initialize(kwargs = {})
           kwargs = kwargs.deep_symbolize_keys if kwargs.respond_to?(:deep_symbolize_keys)
           kwargs[:api_version] ||= resolve_api_version(kwargs)
+          # Store explicit host before super processes kwargs
+          # host is aliased to base_url in parent, so check both
+          @explicit_host = kwargs[:host] || kwargs[:base_url]
           super(kwargs)
         end
 
@@ -55,13 +69,26 @@ def extra_query
 
         # Builds the base URL for Azure OpenAI API requests.
         #
+        # If a direct host/base_url is provided, uses that directly.
+        # Otherwise, constructs the URL from azure_resource and deployment_id.
+        #
         # @return [String] the Azure OpenAI endpoint URL
         def base_url
-          "https://#{azure_resource}.openai.azure.com/openai/deployments/#{deployment_id}"
+          if @explicit_host.present?
+            @explicit_host
+          elsif azure_resource.present? && deployment_id.present?
+            "https://#{azure_resource}.openai.azure.com/openai/deployments/#{deployment_id}"
+          else
+            raise ArgumentError, "Either host or azure_resource + deployment_id must be provided"
+          end
         end
 
         private
 
+        def explicit_host_provided?
+          @explicit_host.present?
+        end
+
         def resolve_api_key(kwargs)
           kwargs[:api_key] ||
             kwargs[:access_token] ||
diff --git a/test/providers/azure/options_test.rb b/test/providers/azure/options_test.rb
index 41889eb9..e110055d 100644
--- a/test/providers/azure/options_test.rb
+++ b/test/providers/azure/options_test.rb
@@ -140,4 +140,128 @@ class AzureOptionsTest < ActiveSupport::TestCase
   ensure
     ENV["AZURE_OPENAI_API_VERSION"] = original_version
   end
+
+  # Tests for direct host support (Azure AI Foundry, Cognitive Services, custom domains)
+  test "allows direct host configuration without azure_resource and deployment_id" do
+    options = ActiveAgent::Providers::Azure::Options.new(
+      api_key: "test-api-key",
+      host: "https://mycompany.cognitiveservices.azure.com/openai/deployments/gpt-4",
+      api_version: "2024-10-21"
+    )
+
+    assert options.valid?, "Expected options to be valid, got errors: #{options.errors.full_messages}"
+    assert_equal "https://mycompany.cognitiveservices.azure.com/openai/deployments/gpt-4", options.base_url
+  end
+
+  test "uses direct host for base_url when provided" do
+    custom_host = "https://custom.azure.com/openai/deployments/my-model"
+    options = ActiveAgent::Providers::Azure::Options.new(
+      api_key: "test-api-key",
+      host: custom_host
+    )
+
+    assert_equal custom_host, options.base_url
+  end
+
+  test "uses base_url alias for direct host configuration" do
+    custom_url = "https://mycompany.cognitiveservices.azure.com/openai/deployments/gpt-4.1"
+    options = ActiveAgent::Providers::Azure::Options.new(
+      api_key: "test-api-key",
+      base_url: custom_url
+    )
+
+    assert_equal custom_url, options.base_url
+  end
+
+  test "prefers host over azure_resource and deployment_id" do
+    custom_host = "https://custom.azure.com/path"
+    options = ActiveAgent::Providers::Azure::Options.new(
+      api_key: "test-api-key",
+      host: custom_host,
+      azure_resource: "ignored",
+      deployment_id: "also-ignored"
+    )
+
+    assert_equal custom_host, options.base_url
+  end
+
+  test "validates presence of azure_resource only when host not provided" do
+    options = ActiveAgent::Providers::Azure::Options.new(
+      api_key: "test-api-key",
+      deployment_id: "gpt-4"
+      # Missing both host and azure_resource
+    )
+
+    assert_not options.valid?
+    assert_includes options.errors[:azure_resource], "can't be blank"
+  end
+
+  test "validates presence of deployment_id only when host not provided" do
+    options = ActiveAgent::Providers::Azure::Options.new(
+      api_key: "test-api-key",
+      azure_resource: "mycompany"
+      # Missing both host and deployment_id
+    )
+
+    assert_not options.valid?
+    assert_includes options.errors[:deployment_id], "can't be blank"
+  end
+
+  test "skips azure_resource validation when host provided" do
+    options = ActiveAgent::Providers::Azure::Options.new(
+      api_key: "test-api-key",
+      host: "https://custom.azure.com/path"
+      # No azure_resource - should be valid
+    )
+
+    assert options.valid?, "Expected valid with host, got: #{options.errors.full_messages}"
+  end
+
+  test "skips deployment_id validation when host provided" do
+    options = ActiveAgent::Providers::Azure::Options.new(
+      api_key: "test-api-key",
+      host: "https://custom.azure.com/path"
+      # No deployment_id - should be valid
+    )
+
+    assert options.valid?, "Expected valid with host, got: #{options.errors.full_messages}"
+  end
+
+  test "is valid with only host and api_key" do
+    original_version = ENV["AZURE_OPENAI_API_VERSION"]
+    ENV.delete("AZURE_OPENAI_API_VERSION")
+
+    options = ActiveAgent::Providers::Azure::Options.new(
+      api_key: "test-api-key",
+      host: "https://myhost.azure.com/path"
+    )
+
+    assert options.valid?, "Expected options to be valid with just host and api_key, got: #{options.errors.full_messages}"
+  ensure
+    ENV["AZURE_OPENAI_API_VERSION"] = original_version
+  end
+
+  test "still returns correct extra_headers when using direct host" do
+    options = ActiveAgent::Providers::Azure::Options.new(
+      api_key: "my-secret-key",
+      host: "https://custom.azure.com/path"
+    )
+
+    assert_equal({ "api-key" => "my-secret-key" }, options.extra_headers)
+  end
+
+  test "still returns correct extra_query when using direct host" do
+    original_version = ENV["AZURE_OPENAI_API_VERSION"]
+    ENV.delete("AZURE_OPENAI_API_VERSION")
+
+    options = ActiveAgent::Providers::Azure::Options.new(
+      api_key: "test-key",
+      host: "https://custom.azure.com/path",
+      api_version: "2025-01-01-preview"
+    )
+
+    assert_equal({ "api-version" => "2025-01-01-preview" }, options.extra_query)
+  ensure
+    ENV["AZURE_OPENAI_API_VERSION"] = original_version
+  end
 end