diff --git a/dvc/tree/azure.py b/dvc/tree/azure.py
index 19f9ecdcb..78ada11b8 100644
--- a/dvc/tree/azure.py
+++ b/dvc/tree/azure.py
@@ -35,16 +35,20 @@ class AzureTree(BaseTree):
             container = self._az_config.get("storage", "container_name", None)
             self.path_info = self.PATH_CLS(f"azure://{container}")
 
-        self._conn_kwargs = {
-            opt: config.get(opt) or self._az_config.get("storage", opt, None)
-            for opt in ["connection_string", "sas_token"]
-        }
-        self._conn_kwargs["account_name"] = self._az_config.get(
-            "storage", "account", None
-        )
-        self._conn_kwargs["account_key"] = self._az_config.get(
-            "storage", "key", None
+        self._conn_str = config.get(
+            "connection_string"
+        ) or self._az_config.get("storage", "connection_string", None)
+
+        self._account_url = None
+        if not self._conn_str:
+            name = self._az_config.get("storage", "account", None)
+            self._account_url = f"https://{name}.blob.core.windows.net"
+
+        self._credential = config.get("sas_token") or self._az_config.get(
+            "storage", "sas_token", None
         )
+        if not self._credential:
+            self._credential = self._az_config.get("storage", "key", None)
 
     @cached_property
     def _az_config(self):
@@ -62,64 +66,71 @@ class AzureTree(BaseTree):
     @cached_property
     def blob_service(self):
         # pylint: disable=no-name-in-module
-        from azure.storage.blob import BlockBlobService
-        from azure.common import AzureMissingResourceHttpError
+        from azure.storage.blob import BlobServiceClient
+        from azure.core.exceptions import ResourceNotFoundError
 
         logger.debug(f"URL {self.path_info}")
-        logger.debug(f"Connection options {self._conn_kwargs}")
-        blob_service = BlockBlobService(**self._conn_kwargs)
+
+        if self._conn_str:
+            logger.debug(f"Using connection string '{self._conn_str}'")
+            blob_service = BlobServiceClient.from_connection_string(
+                self._conn_str, credential=self._credential
+            )
+        else:
+            logger.debug(f"Using account url '{self._account_url}'")
+            blob_service = BlobServiceClient(
+                self._account_url, credential=self._credential
+            )
+
         logger.debug(f"Container name {self.path_info.bucket}")
+        container_client = blob_service.get_container_client(
+            self.path_info.bucket
+        )
+
         try:  # verify that container exists
-            blob_service.list_blobs(
-                self.path_info.bucket, delimiter="/", num_results=1
-            )
-        except AzureMissingResourceHttpError:
-            blob_service.create_container(self.path_info.bucket)
+            container_client.get_container_properties()
+        except ResourceNotFoundError:
+            container_client.create_container()
+
         return blob_service
 
     def get_etag(self, path_info):
-        etag = self.blob_service.get_blob_properties(
+        blob_client = self.blob_service.get_blob_client(
             path_info.bucket, path_info.path
-        ).properties.etag
+        )
+        etag = blob_client.get_blob_properties().etag
         return etag.strip('"')
 
     def _generate_download_url(self, path_info, expires=3600):
         from azure.storage.blob import (  # pylint:disable=no-name-in-module
-            BlobPermissions,
+            BlobSasPermissions,
+            generate_blob_sas,
         )
 
         expires_at = datetime.utcnow() + timedelta(seconds=expires)
 
-        sas_token = self.blob_service.generate_blob_shared_access_signature(
-            path_info.bucket,
-            path_info.path,
-            permission=BlobPermissions.READ,
-            expiry=expires_at,
+        blob_client = self.blob_service.get_blob_client(
+            path_info.bucket, path_info.path
         )
-        download_url = self.blob_service.make_blob_url(
-            path_info.bucket, path_info.path, sas_token=sas_token
+
+        sas_token = generate_blob_sas(
+            blob_client.account_name,
+            blob_client.container_name,
+            blob_client.blob_name,
+            account_key=blob_client.credential.account_key,
+            permission=BlobSasPermissions(read=True),
+            expiry=expires_at,
         )
-        return download_url
+        return blob_client.url + "?" + sas_token
 
     def exists(self, path_info, use_dvcignore=True):
         paths = self._list_paths(path_info.bucket, path_info.path)
         return any(path_info.path == path for path in paths)
 
     def _list_paths(self, bucket, prefix):
-        blob_service = self.blob_service
-        next_marker = None
-        while True:
-            blobs = blob_service.list_blobs(
-                bucket, prefix=prefix, marker=next_marker
-            )
-
-            for blob in blobs:
-                yield blob.name
-
-            if not blobs.next_marker:
-                break
-
-            next_marker = blobs.next_marker
+        container_client = self.blob_service.get_container_client(bucket)
+        for blob in container_client.list_blobs(name_starts_with=prefix):
+            yield blob.name
 
     def walk_files(self, path_info, **kwargs):
         if not kwargs.pop("prefix", False):
@@ -137,7 +148,9 @@ class AzureTree(BaseTree):
             raise NotImplementedError
 
         logger.debug(f"Removing {path_info}")
-        self.blob_service.delete_blob(path_info.bucket, path_info.path)
+        self.blob_service.get_blob_client(
+            path_info.bucket, path_info.path
+        ).delete_blob()
 
     def get_file_hash(self, path_info):
         return self.get_etag(path_info)
@@ -145,21 +158,27 @@ class AzureTree(BaseTree):
     def _upload(
         self, from_file, to_info, name=None, no_progress_bar=False, **_kwargs
     ):
-        with Tqdm(desc=name, disable=no_progress_bar, bytes=True) as pbar:
-            self.blob_service.create_blob_from_path(
-                to_info.bucket,
-                to_info.path,
-                from_file,
-                progress_callback=pbar.update_to,
-            )
+
+        blob_client = self.blob_service.get_blob_client(
+            to_info.bucket, to_info.path
+        )
+        total = os.path.getsize(from_file)
+        with open(from_file, "rb") as fobj:
+            with Tqdm.wrapattr(
+                fobj, "read", desc=name, total=total, disable=no_progress_bar
+            ) as wrapped:
+                blob_client.upload_blob(wrapped)
 
     def _download(
         self, from_info, to_file, name=None, no_progress_bar=False, **_kwargs
     ):
-        with Tqdm(desc=name, disable=no_progress_bar, bytes=True) as pbar:
-            self.blob_service.get_blob_to_path(
-                from_info.bucket,
-                from_info.path,
-                to_file,
-                progress_callback=pbar.update_to,
-            )
+        blob_client = self.blob_service.get_blob_client(
+            from_info.bucket, from_info.path
+        )
+        total = blob_client.get_blob_properties().size
+        stream = blob_client.download_blob()
+        with open(to_file, "wb") as fobj:
+            with Tqdm.wrapattr(
+                fobj, "write", desc=name, total=total, disable=no_progress_bar
+            ) as wrapped:
+                stream.readinto(wrapped)
diff --git a/setup.py b/setup.py
index ed4c1c309..300b5a23b 100644
--- a/setup.py
+++ b/setup.py
@@ -89,7 +89,7 @@ install_requires = [
 gs = ["google-cloud-storage==1.19.0"]
 gdrive = ["pydrive2>=1.4.14"]
 s3 = ["boto3>=1.9.201"]
-azure = ["azure-storage-blob==2.1.0", "knack"]
+azure = ["azure-storage-blob>=12.0", "knack"]
 oss = ["oss2==2.6.1"]
 ssh = ["paramiko>=2.5.0"]
 hdfs = ["pyarrow>=0.17.0"]

remote: upgrade Azure Blob storage version
Hi!

At the moment `dvc[azure]` has as a requirement `azure = ["azure-storage-blob==2.1.0"]`

Recently there Python SDKs were massively improved to be more Pythonic and efficient. I was wondering if it would be possible to allow for the use of the latest version (12.1). Or if there are any blockers for this I can help with?

diff --git a/tests/remotes/azure.py b/tests/remotes/azure.py
index 8dae521d2..27db33298 100644
--- a/tests/remotes/azure.py
+++ b/tests/remotes/azure.py
@@ -25,10 +25,10 @@ class Azure(Base, CloudURLInfo):
 @pytest.fixture(scope="session")
 def azure_server(docker_compose, docker_services):
     from azure.storage.blob import (  # pylint: disable=no-name-in-module
-        BlockBlobService,
+        BlobServiceClient,
     )
-    from azure.common import (  # pylint: disable=no-name-in-module
-        AzureException,
+    from azure.core.exceptions import (  # pylint: disable=no-name-in-module
+        AzureError,
     )
 
     port = docker_services.port_for("azurite", 10000)
@@ -36,11 +36,11 @@ def azure_server(docker_compose, docker_services):
 
     def _check():
         try:
-            BlockBlobService(
-                connection_string=connection_string,
+            BlobServiceClient.from_connection_string(
+                connection_string
             ).list_containers()
             return True
-        except AzureException:
+        except AzureError:
             return False
 
     docker_services.wait_until_responsive(
diff --git a/tests/unit/remote/test_azure.py b/tests/unit/remote/test_azure.py
index 0af52f046..a0614bcf6 100644
--- a/tests/unit/remote/test_azure.py
+++ b/tests/unit/remote/test_azure.py
@@ -17,7 +17,7 @@ def test_init_env_var(monkeypatch, dvc):
     config = {"url": "azure://"}
     tree = AzureTree(dvc, config)
     assert tree.path_info == "azure://" + container_name
-    assert tree._conn_kwargs["connection_string"] == connection_string
+    assert tree._conn_str == connection_string
 
 
 def test_init(dvc):
@@ -26,7 +26,7 @@ def test_init(dvc):
     config = {"url": url, "connection_string": connection_string}
     tree = AzureTree(dvc, config)
     assert tree.path_info == url
-    assert tree._conn_kwargs["connection_string"] == connection_string
+    assert tree._conn_str == connection_string
 
 
 def test_get_file_hash(tmp_dir, azure):

pip install -e .[all]
parse_log_pytest
pytest
pytest pytest-cov pytest-xdist pytest-mock pytest-lazy-fixture flaky mock xmltodict awscli google-compute-engine Pygments collective.checkdocs flake8 psutil flake8-docstrings pydocstyle jaraco.windows mock-ssh-server moto rangehttpserver beautifulsoup4 flake8-bugbear flake8-comprehensions flake8-string-format pylint pylint-pytest pylint-plugin-utils wget filelock
apt-get update apt-get install -y gcc
3.7
pytest --no-header -rA --tb=line --color=no -p no:cacheprovider -W ignore::DeprecationWarning
aliyun-python-sdk-core==2.16.0
aliyun-python-sdk-core-v3==2.13.33
aliyun-python-sdk-kms==2.16.5
appdirs==1.4.4
argcomplete==3.1.2
astroid==2.15.8
atpublic==3.1.2
attrs @ file:///croot/attrs_1668696182826/work
autocommand==2.2.2
awscli==1.31.13
azure-common==1.1.28
azure-storage-blob==2.1.0
azure-storage-common==2.1.0
bcrypt==4.2.1
beautifulsoup4==4.13.3
boto==2.49.0
boto3==1.33.13
botocore==1.33.13
cachetools==4.2.4
certifi @ file:///croot/certifi_1671487769961/work/certifi
cffi==1.15.1
charset-normalizer==3.4.1
collective.checkdocs==0.2
colorama==0.4.4
configobj==5.0.9
coverage==7.2.7
crcmod==1.7
cryptography==44.0.2
decorator==5.1.1
dill==0.3.7
distro==1.9.0
docutils==0.16
dpath==2.2.0
-e git+https://github.com/iterative/dvc.git@12c7013062c89a4f9f75d7459a7ed654f3ac174f#egg=dvc
execnet==2.0.2
filelock==3.12.2
flake8==5.0.4
flake8-bugbear==23.3.12
flake8-comprehensions==3.13.0
flake8-docstrings==1.7.0
flake8-string-format==0.3.0
flaky==3.8.1
flatten-json==0.1.7
flit_core @ file:///opt/conda/conda-bld/flit-core_1644941570762/work/source/flit_core
flufl.lock==3.2
funcy==2.0
future==1.0.0
gitdb==4.0.12
GitPython==3.1.44
google-api-core==2.10.2
google-api-python-client==2.166.0
google-auth==1.35.0
google-auth-httplib2==0.2.0
google-cloud-core==1.7.3
google-cloud-storage==1.19.0
google-compute-engine==2.8.13
google-crc32c==1.5.0
google-resumable-media==2.7.2
googleapis-common-protos==1.69.2
grandalf==0.6
httplib2==0.22.0
idna==3.10
importlib-metadata==4.2.0
importlib-resources==5.12.0
inflect==6.0.5
iniconfig @ file:///home/linux1/recipes/ci/iniconfig_1610983019677/work
isort==5.11.5
jaraco.classes==3.2.3
jaraco.collections==4.2.0
jaraco.context==4.3.0
jaraco.functools==3.7.0
jaraco.structures==2.1.0
jaraco.text==3.11.1
jaraco.ui==2.3.0
jaraco.windows==5.7.0
Jinja2==3.1.6
jmespath==0.10.0
jsonpath-ng==1.7.0
knack==0.12.0
lazy-object-proxy==1.9.0
lxml==5.3.1
markdown-it-py==2.2.0
MarkupSafe==2.1.5
mccabe==0.7.0
mdurl==0.1.2
mock==5.2.0
mock-ssh-server==0.9.1
more-itertools==9.1.0
moto==4.2.14
nanotime==0.5.2
networkx==2.4
numpy==1.21.6
oauth2client==4.1.3
oss2==2.6.1
packaging @ file:///croot/packaging_1671697413597/work
paramiko==3.5.1
path==16.6.0
pathspec==0.11.2
platformdirs==4.0.0
pluggy @ file:///tmp/build/80754af9/pluggy_1648042572264/work
ply==3.11
protobuf==4.24.4
psutil==7.0.0
py @ file:///opt/conda/conda-bld/py_1644396412707/work
pyarrow==12.0.1
pyasn1==0.5.1
pyasn1-modules==0.3.0
pycodestyle==2.9.1
pycparser==2.21
pycryptodome==3.22.0
pydantic==1.10.21
pydocstyle==6.3.0
pydot==2.0.0
PyDrive2==1.15.4
pyflakes==2.5.0
Pygments==2.17.2
pygtrie==2.3.2
pylint==2.17.7
pylint-plugin-utils==0.8.2
pylint-pytest==1.1.8
PyNaCl==1.5.0
pyOpenSSL==25.0.0
pyparsing==3.1.4
pytest==7.1.2
pytest-cov==4.1.0
pytest-lazy-fixture==0.6.3
pytest-mock==3.11.1
pytest-xdist==3.5.0
python-dateutil==2.9.0.post0
PyYAML==5.3.1
rangehttpserver==1.4.0
requests==2.31.0
responses==0.23.3
rich==13.8.1
rsa==4.7.2
ruamel.yaml==0.18.10
ruamel.yaml.clib==0.2.8
s3transfer==0.8.2
shortuuid==1.0.13
shtab==1.7.1
six==1.17.0
smmap==5.0.2
snowballstemmer==2.2.0
soupsieve==2.4.1
tabulate==0.9.0
toml==0.10.2
tomli @ file:///opt/conda/conda-bld/tomli_1657175507142/work
tomlkit==0.12.5
tqdm==4.67.1
typed-ast==1.5.5
types-PyYAML==6.0.12.12
typing_extensions==4.7.1
uritemplate==4.1.1
urllib3==1.26.20
voluptuous==0.14.1
webdavclient3==3.14.6
Werkzeug==2.2.3
wget==3.2
wrapt==1.16.0
xmltodict==0.14.2
zc.lockfile==3.0.post1
zipp @ file:///croot/zipp_1672387121353/work

name: dvc
channels:
  - defaults
  - https://repo.anaconda.com/pkgs/main
  - https://repo.anaconda.com/pkgs/r
  - conda-forge
dependencies:
  - _libgcc_mutex=0.1=main
  - _openmp_mutex=5.1=1_gnu
  - attrs=22.1.0=py37h06a4308_0
  - ca-certificates=2025.2.25=h06a4308_0
  - certifi=2022.12.7=py37h06a4308_0
  - flit-core=3.6.0=pyhd3eb1b0_0
  - importlib_metadata=4.11.3=hd3eb1b0_0
  - iniconfig=1.1.1=pyhd3eb1b0_0
  - ld_impl_linux-64=2.40=h12ee557_0
  - libffi=3.4.4=h6a678d5_1
  - libgcc-ng=11.2.0=h1234567_1
  - libgomp=11.2.0=h1234567_1
  - libstdcxx-ng=11.2.0=h1234567_1
  - ncurses=6.4=h6a678d5_0
  - openssl=1.1.1w=h7f8727e_0
  - packaging=22.0=py37h06a4308_0
  - pip=22.3.1=py37h06a4308_0
  - pluggy=1.0.0=py37h06a4308_1
  - py=1.11.0=pyhd3eb1b0_0
  - pytest=7.1.2=py37h06a4308_0
  - python=3.7.16=h7a1cb2a_0
  - readline=8.2=h5eee18b_0
  - setuptools=65.6.3=py37h06a4308_0
  - sqlite=3.45.3=h5eee18b_0
  - tk=8.6.14=h39e8969_0
  - tomli=2.0.1=py37h06a4308_0
  - wheel=0.38.4=py37h06a4308_0
  - xz=5.6.4=h5eee18b_1
  - zipp=3.11.0=py37h06a4308_0
  - zlib=1.2.13=h5eee18b_1
  - pip:
      - aliyun-python-sdk-core==2.16.0
      - aliyun-python-sdk-core-v3==2.13.33
      - aliyun-python-sdk-kms==2.16.5
      - appdirs==1.4.4
      - argcomplete==3.1.2
      - astroid==2.15.8
      - atpublic==3.1.2
      - autocommand==2.2.2
      - awscli==1.31.13
      - azure-common==1.1.28
      - azure-storage-blob==2.1.0
      - azure-storage-common==2.1.0
      - bcrypt==4.2.1
      - beautifulsoup4==4.13.3
      - boto==2.49.0
      - boto3==1.33.13
      - botocore==1.33.13
      - cachetools==4.2.4
      - cffi==1.15.1
      - charset-normalizer==3.4.1
      - collective-checkdocs==0.2
      - colorama==0.4.4
      - configobj==5.0.9
      - coverage==7.2.7
      - crcmod==1.7
      - cryptography==44.0.2
      - decorator==5.1.1
      - dill==0.3.7
      - distro==1.9.0
      - docutils==0.16
      - dpath==2.2.0
      - dvc==1.4.0+12c701
      - execnet==2.0.2
      - filelock==3.12.2
      - flake8==5.0.4
      - flake8-bugbear==23.3.12
      - flake8-comprehensions==3.13.0
      - flake8-docstrings==1.7.0
      - flake8-string-format==0.3.0
      - flaky==3.8.1
      - flatten-json==0.1.7
      - flufl-lock==3.2
      - funcy==2.0
      - future==1.0.0
      - gitdb==4.0.12
      - gitpython==3.1.44
      - google-api-core==2.10.2
      - google-api-python-client==2.166.0
      - google-auth==1.35.0
      - google-auth-httplib2==0.2.0
      - google-cloud-core==1.7.3
      - google-cloud-storage==1.19.0
      - google-compute-engine==2.8.13
      - google-crc32c==1.5.0
      - google-resumable-media==2.7.2
      - googleapis-common-protos==1.69.2
      - grandalf==0.6
      - httplib2==0.22.0
      - idna==3.10
      - importlib-metadata==4.2.0
      - importlib-resources==5.12.0
      - inflect==6.0.5
      - isort==5.11.5
      - jaraco-classes==3.2.3
      - jaraco-collections==4.2.0
      - jaraco-context==4.3.0
      - jaraco-functools==3.7.0
      - jaraco-structures==2.1.0
      - jaraco-text==3.11.1
      - jaraco-ui==2.3.0
      - jaraco-windows==5.7.0
      - jinja2==3.1.6
      - jmespath==0.10.0
      - jsonpath-ng==1.7.0
      - knack==0.12.0
      - lazy-object-proxy==1.9.0
      - lxml==5.3.1
      - markdown-it-py==2.2.0
      - markupsafe==2.1.5
      - mccabe==0.7.0
      - mdurl==0.1.2
      - mock==5.2.0
      - mock-ssh-server==0.9.1
      - more-itertools==9.1.0
      - moto==4.2.14
      - nanotime==0.5.2
      - networkx==2.4
      - numpy==1.21.6
      - oauth2client==4.1.3
      - oss2==2.6.1
      - paramiko==3.5.1
      - path==16.6.0
      - pathspec==0.11.2
      - platformdirs==4.0.0
      - ply==3.11
      - protobuf==4.24.4
      - psutil==7.0.0
      - pyarrow==12.0.1
      - pyasn1==0.5.1
      - pyasn1-modules==0.3.0
      - pycodestyle==2.9.1
      - pycparser==2.21
      - pycryptodome==3.22.0
      - pydantic==1.10.21
      - pydocstyle==6.3.0
      - pydot==2.0.0
      - pydrive2==1.15.4
      - pyflakes==2.5.0
      - pygments==2.17.2
      - pygtrie==2.3.2
      - pylint==2.17.7
      - pylint-plugin-utils==0.8.2
      - pylint-pytest==1.1.8
      - pynacl==1.5.0
      - pyopenssl==25.0.0
      - pyparsing==3.1.4
      - pytest-cov==4.1.0
      - pytest-lazy-fixture==0.6.3
      - pytest-mock==3.11.1
      - pytest-xdist==3.5.0
      - python-dateutil==2.9.0.post0
      - pyyaml==5.3.1
      - rangehttpserver==1.4.0
      - requests==2.31.0
      - responses==0.23.3
      - rich==13.8.1
      - rsa==4.7.2
      - ruamel-yaml==0.18.10
      - ruamel-yaml-clib==0.2.8
      - s3transfer==0.8.2
      - shortuuid==1.0.13
      - shtab==1.7.1
      - six==1.17.0
      - smmap==5.0.2
      - snowballstemmer==2.2.0
      - soupsieve==2.4.1
      - tabulate==0.9.0
      - toml==0.10.2
      - tomlkit==0.12.5
      - tqdm==4.67.1
      - typed-ast==1.5.5
      - types-pyyaml==6.0.12.12
      - typing-extensions==4.7.1
      - uritemplate==4.1.1
      - urllib3==1.26.20
      - voluptuous==0.14.1
      - webdavclient3==3.14.6
      - werkzeug==2.2.3
      - wget==3.2
      - wrapt==1.16.0
      - xmltodict==0.14.2
      - zc-lockfile==3.0.post1
prefix: /opt/conda/envs/dvc

tests/unit/remote/test_azure.py::test_init_env_var tests/unit/remote/test_azure.py::test_init
setup.py dvc/tree/azure.py
setup.py dvc/tree/azure.py