Azure AD Connect Password Hash Synchronization (PHS) is a feature that allows users’ on-premises passwords to be synchronized to Azure AD. When PHS is enabled, the password hashes of users in an on-premises Active Directory are synchronized to Azure AD, so that users can sign in to Azure AD and Office 365 services using their on-premises passwords.
PHS is one of the three authentication methods supported by Azure AD Connect, the other two being Pass-through Authentication (PTA) and federation. PHS is the easiest authentication method to deploy, as it does not require any additional infrastructure beyond Azure AD Connect.
