diff --git a/modules/Microsoft.Compute/diskEncryptionSets/.test/common/dependencies.bicep b/modules/Microsoft.Compute/diskEncryptionSets/.test/common/dependencies.bicep
index 75de19a493..2c40774db0 100644
--- a/modules/Microsoft.Compute/diskEncryptionSets/.test/common/dependencies.bicep
+++ b/modules/Microsoft.Compute/diskEncryptionSets/.test/common/dependencies.bicep
@@ -7,6 +7,11 @@ param keyVaultName string
 @description('Required. The name of the Managed Identity to create.')
 param managedIdentityName string
 
+resource managedIdentity 'Microsoft.ManagedIdentity/userAssignedIdentities@2018-11-30' = {
+    name: managedIdentityName
+    location: location
+}
+
 resource keyVault 'Microsoft.KeyVault/vaults@2022-07-01' = {
     name: keyVaultName
     location: location
@@ -16,7 +21,8 @@ resource keyVault 'Microsoft.KeyVault/vaults@2022-07-01' = {
             name: 'standard'
         }
         tenantId: tenant().tenantId
-        enablePurgeProtection: null
+        enablePurgeProtection: true // Required by disk encryption set
+        softDeleteRetentionInDays: 7
         enabledForTemplateDeployment: true
         enabledForDiskEncryption: true
         enabledForDeployment: true
@@ -32,13 +38,8 @@ resource keyVault 'Microsoft.KeyVault/vaults@2022-07-01' = {
     }
 }
 
-resource managedIdentity 'Microsoft.ManagedIdentity/userAssignedIdentities@2018-11-30' = {
-    name: managedIdentityName
-    location: location
-}
-
 resource keyPermissions 'Microsoft.Authorization/roleAssignments@2022-04-01' = {
-    name: guid('msi-${keyVault::key.id}-${location}-${managedIdentity.id}-KeyVault-Reader-RoleAssignment.')
+    name: guid('msi-${keyVault::key.id}-${location}-${managedIdentity.id}-Key-Reader-RoleAssignment')
     scope: keyVault::key
     properties: {
         principalId: managedIdentity.properties.principalId
@@ -55,3 +56,6 @@ output keyName string = keyVault::key.name
 
 @description('The principal ID of the created Managed Identity.')
 output managedIdentityPrincipalId string = managedIdentity.properties.principalId
+
+@description('The resource ID of the created Managed Identity.')
+output managedIdentityResourceId string = managedIdentity.id
diff --git a/modules/Microsoft.Compute/diskEncryptionSets/.test/common/deploy.test.bicep b/modules/Microsoft.Compute/diskEncryptionSets/.test/common/deploy.test.bicep
index 0ae5f9f0ed..c844de19e8 100644
--- a/modules/Microsoft.Compute/diskEncryptionSets/.test/common/deploy.test.bicep
+++ b/modules/Microsoft.Compute/diskEncryptionSets/.test/common/deploy.test.bicep
@@ -14,6 +14,9 @@ param location string = deployment().location
 @description('Optional. A short identifier for the kind of deployment. Should be kept short to not run into resource-name length-constraints.')
 param serviceShort string = 'cdescom'
 
+@description('Generated. Used as a basis for unique resource names.')
+param baseTime string = utcNow('u')
+
 @description('Optional. Enable telemetry via a Globally Unique Identifier (GUID).')
 param enableDefaultTelemetry bool = true
 
@@ -32,7 +35,8 @@ module nestedDependencies 'dependencies.bicep' = {
   scope: resourceGroup
   name: '${uniqueString(deployment().name, location)}-nestedDependencies'
   params: {
-    keyVaultName: 'dep-<<namePrefix>>-kv-${serviceShort}'
+    // Adding base time to make the name unique as purge protection must be enabled (but may not be longer than 24 characters total)
+    keyVaultName: 'dep-<<namePrefix>>-kv-${serviceShort}-${substring(uniqueString(baseTime), 0, 3)}'
     managedIdentityName: 'dep-<<namePrefix>>-msi-${serviceShort}'
   }
 }
@@ -58,5 +62,9 @@ module testDeployment '../../deploy.bicep' = {
         principalType: 'ServicePrincipal'
       }
     ]
+    systemAssignedIdentity: true
+    userAssignedIdentities: {
+      '${nestedDependencies.outputs.managedIdentityResourceId}': {}
+    }
   }
 }
diff --git a/modules/Microsoft.Compute/diskEncryptionSets/deploy.bicep b/modules/Microsoft.Compute/diskEncryptionSets/deploy.bicep
index 04b40b7b4e..57b274b78d 100644
--- a/modules/Microsoft.Compute/diskEncryptionSets/deploy.bicep
+++ b/modules/Microsoft.Compute/diskEncryptionSets/deploy.bicep
@@ -20,9 +20,18 @@ param keyVersion string = ''
 ])
 param encryptionType string = 'EncryptionAtRestWithPlatformAndCustomerKeys'
 
+@description('Optional. Multi-tenant application client ID to access key vault in a different tenant. Setting the value to "None" will clear the property.')
+param federatedClientId string = 'None'
+
 @description('Optional. Set this flag to true to enable auto-updating of this disk encryption set to the latest key version.')
 param rotationToLatestKeyVersionEnabled bool = false
 
+@description('Optional. Enables system assigned managed identity on the resource.')
+param systemAssignedIdentity bool = true
+
+@description('Optional. The ID(s) to assign to the resource.')
+param userAssignedIdentities object = {}
+
 @description('Optional. Array of role assignment objects that contain the \'roleDefinitionIdOrName\' and \'principalId\' to define RBAC role assignments on this resource. In the roleDefinitionIdOrName attribute, you can provide either the display name of the role definition, or its fully qualified ID in the following format: \'/providers/Microsoft.Authorization/roleDefinitions/c2f4ef07-c644-48eb-af81-4b1b4947fb11\'.')
 param roleAssignments array = []
 
@@ -32,6 +41,13 @@ param tags object = {}
 @description('Optional. Enable telemetry via a Globally Unique Identifier (GUID).')
 param enableDefaultTelemetry bool = true
 
+var identityType = systemAssignedIdentity ? (!empty(userAssignedIdentities) ? 'SystemAssigned,UserAssigned' : 'SystemAssigned') : (!empty(userAssignedIdentities) ? 'UserAssigned' : 'None')
+
+var identity = identityType != 'None' ? {
+  type: identityType
+  userAssignedIdentities: !empty(userAssignedIdentities) ? userAssignedIdentities : null
+} : null
+
 resource defaultTelemetry 'Microsoft.Resources/deployments@2021-04-01' = if (enableDefaultTelemetry) {
   name: 'pid-47ed15a6-730a-4827-bcb4-0fd963ffbd82-${uniqueString(deployment().name, location)}'
   properties: {
@@ -49,13 +65,11 @@ resource keyVaultKey 'Microsoft.KeyVault/vaults/keys@2021-10-01' existing = {
   scope: resourceGroup(split(keyVaultResourceId, '/')[2], split(keyVaultResourceId, '/')[4])
 }
 
-resource diskEncryptionSet 'Microsoft.Compute/diskEncryptionSets@2021-04-01' = {
+resource diskEncryptionSet 'Microsoft.Compute/diskEncryptionSets@2022-07-02' = {
   name: name
   location: location
   tags: tags
-  identity: {
-    type: 'SystemAssigned'
-  }
+  identity: identity
   properties: {
     activeKey: {
       sourceVault: {
@@ -64,6 +78,7 @@ resource diskEncryptionSet 'Microsoft.Compute/diskEncryptionSets@2021-04-01' = {
       keyUrl: !empty(keyVersion) ? '${keyVaultKey.properties.keyUri}/${keyVersion}' : keyVaultKey.properties.keyUriWithVersion
     }
     encryptionType: encryptionType
+    federatedClientId: federatedClientId
     rotationToLatestKeyVersionEnabled: rotationToLatestKeyVersionEnabled
   }
 }
diff --git a/modules/Microsoft.Compute/diskEncryptionSets/readme.md b/modules/Microsoft.Compute/diskEncryptionSets/readme.md
index 350721060f..117f30fbdc 100644
--- a/modules/Microsoft.Compute/diskEncryptionSets/readme.md
+++ b/modules/Microsoft.Compute/diskEncryptionSets/readme.md
@@ -15,8 +15,8 @@ This template deploys a disk encryption set.
 | Resource Type | API Version |
 | :-- | :-- |
 | `Microsoft.Authorization/roleAssignments` | [2022-04-01](https://docs.microsoft.com/en-us/azure/templates/Microsoft.Authorization/2022-04-01/roleAssignments) |
-| `Microsoft.Compute/diskEncryptionSets` | [2021-04-01](https://docs.microsoft.com/en-us/azure/templates/Microsoft.Compute/2021-04-01/diskEncryptionSets) |
-| `Microsoft.KeyVault/vaults/accessPolicies` | [2021-06-01-preview](https://docs.microsoft.com/en-us/azure/templates/Microsoft.KeyVault/2021-06-01-preview/vaults/accessPolicies) |
+| `Microsoft.Compute/diskEncryptionSets` | [2022-07-02](https://docs.microsoft.com/en-us/azure/templates/Microsoft.Compute/2022-07-02/diskEncryptionSets) |
+| `Microsoft.KeyVault/vaults/accessPolicies` | [2022-07-01](https://docs.microsoft.com/en-us/azure/templates/Microsoft.KeyVault/2022-07-01/vaults/accessPolicies) |
 
 ## Parameters
 
@@ -34,11 +34,14 @@ This template deploys a disk encryption set.
 | :-- | :-- | :-- | :-- | :-- |
 | `enableDefaultTelemetry` | bool | `True` |  | Enable telemetry via a Globally Unique Identifier (GUID). |
 | `encryptionType` | string | `'EncryptionAtRestWithPlatformAndCustomerKeys'` | `[EncryptionAtRestWithCustomerKey, EncryptionAtRestWithPlatformAndCustomerKeys]` | The type of key used to encrypt the data of the disk. For security reasons, it is recommended to set encryptionType to EncryptionAtRestWithPlatformAndCustomerKeys. |
+| `federatedClientId` | string | `'None'` |  | Multi-tenant application client ID to access key vault in a different tenant. Setting the value to "None" will clear the property. |
 | `keyVersion` | string | `''` |  | The version of the customer managed key to reference for encryption. If not provided, the latest key version is used. |
 | `location` | string | `[resourceGroup().location]` |  | Resource location. |
 | `roleAssignments` | array | `[]` |  | Array of role assignment objects that contain the 'roleDefinitionIdOrName' and 'principalId' to define RBAC role assignments on this resource. In the roleDefinitionIdOrName attribute, you can provide either the display name of the role definition, or its fully qualified ID in the following format: '/providers/Microsoft.Authorization/roleDefinitions/c2f4ef07-c644-48eb-af81-4b1b4947fb11'. |
 | `rotationToLatestKeyVersionEnabled` | bool | `False` |  | Set this flag to true to enable auto-updating of this disk encryption set to the latest key version. |
+| `systemAssignedIdentity` | bool | `True` |  | Enables system assigned managed identity on the resource. |
 | `tags` | object | `{object}` |  | Tags of the disk encryption resource. |
+| `userAssignedIdentities` | object | `{object}` |  | The ID(s) to assign to the resource. |
 
 
 ### Parameter Usage: `roleAssignments`
@@ -141,6 +144,39 @@ tags: {
 </details>
 <p>
 
+### Parameter Usage: `userAssignedIdentities`
+
+You can specify multiple user assigned identities to a resource by providing additional resource IDs using the following format:
+
+<details>
+
+<summary>Parameter JSON format</summary>
+
+```json
+"userAssignedIdentities": {
+    "value": {
+        "/subscriptions/<<subscriptionId>>/resourcegroups/validation-rg/providers/Microsoft.ManagedIdentity/userAssignedIdentities/adp-sxx-az-msi-x-001": {},
+        "/subscriptions/<<subscriptionId>>/resourcegroups/validation-rg/providers/Microsoft.ManagedIdentity/userAssignedIdentities/adp-sxx-az-msi-x-002": {}
+    }
+}
+```
+
+</details>
+
+<details>
+
+<summary>Bicep format</summary>
+
+```bicep
+userAssignedIdentities: {
+    '/subscriptions/<<subscriptionId>>/resourcegroups/validation-rg/providers/Microsoft.ManagedIdentity/userAssignedIdentities/adp-sxx-az-msi-x-001': {}
+    '/subscriptions/<<subscriptionId>>/resourcegroups/validation-rg/providers/Microsoft.ManagedIdentity/userAssignedIdentities/adp-sxx-az-msi-x-002': {}
+}
+```
+
+</details>
+<p>
+
 ## Outputs
 
 | Output Name | Type | Description |
@@ -192,6 +228,10 @@ module diskEncryptionSets './Microsoft.Compute/diskEncryptionSets/deploy.bicep'
         roleDefinitionIdOrName: 'Reader'
       }
     ]
+    systemAssignedIdentity: true
+    userAssignedIdentities: {
+      '<managedIdentityResourceId>': {}
+    }
   }
 }
 ```
@@ -232,6 +272,14 @@ module diskEncryptionSets './Microsoft.Compute/diskEncryptionSets/deploy.bicep'
           "roleDefinitionIdOrName": "Reader"
         }
       ]
+    },
+    "systemAssignedIdentity": {
+      "value": true
+    },
+    "userAssignedIdentities": {
+      "value": {
+        "<managedIdentityResourceId>": {}
+      }
     }
   }
 }