diff --git a/litellm/llms/azure/common_utils.py b/litellm/llms/azure/common_utils.py
index b88b6985a98..3f1785d885c 100644
--- a/litellm/llms/azure/common_utils.py
+++ b/litellm/llms/azure/common_utils.py
@@ -665,10 +665,6 @@ class BaseAzureLLM(BaseOpenAILLM):
     ) -> dict:
         litellm_params = litellm_params or GenericLiteLLMParams()
 
-        # If api-key is already in headers, preserve it
-        if "api-key" in headers:
-            return headers
-
         api_key = (
             litellm_params.api_key
             or litellm.api_key
diff --git a/litellm/llms/azure/passthrough/transformation.py b/litellm/llms/azure/passthrough/transformation.py
index b6fed6b4470..4e9de4b314f 100644
--- a/litellm/llms/azure/passthrough/transformation.py
+++ b/litellm/llms/azure/passthrough/transformation.py
@@ -58,7 +58,9 @@ class AzurePassthroughConfig(BasePassthroughConfig):
     ) -> dict:
         return BaseAzureLLM._base_validate_azure_environment(
             headers=headers,
-            litellm_params=GenericLiteLLMParams(**litellm_params),
+            litellm_params=GenericLiteLLMParams(
+                **{**litellm_params, "api_key": api_key}
+            ),
         )
 
     @staticmethod
diff --git a/litellm/proxy/_new_secret_config.yaml b/litellm/proxy/_new_secret_config.yaml
index 0882a9298aa..fad6ad336a8 100644
--- a/litellm/proxy/_new_secret_config.yaml
+++ b/litellm/proxy/_new_secret_config.yaml
@@ -20,7 +20,7 @@ model_list:
       model: azure/gpt-4.1
       api_base: os.environ/AZURE_API_BASE_ALT
       api_version: "2023-05-15"
-      api_key: os.environ/AZURE_API_KEY_HIDDEN
+      api_key: os.environ/AZURE_API_KEY_ALT
 
 # mcp_servers:
 #   github_mcp: