diff --git a/litellm/llms/azure/batches/handler.py b/litellm/llms/azure/batches/handler.py
index 7fc6388ba87..c038f62561c 100644
--- a/litellm/llms/azure/batches/handler.py
+++ b/litellm/llms/azure/batches/handler.py
@@ -62,7 +62,7 @@ class AzureBatchesAPI(BaseAzureLLM):
         )
         if azure_client is None:
             raise ValueError(
-                "OpenAI client is not initialized. Make sure api_key is passed or OPENAI_API_KEY is set in the environment."
+                "Azure OpenAI client is not initialized. Make sure api_key is passed or AZURE_API_KEY/AZURE_OPENAI_API_KEY is set in the environment."
             )
 
         if _is_async is True:
@@ -108,7 +108,7 @@ class AzureBatchesAPI(BaseAzureLLM):
         )
         if azure_client is None:
             raise ValueError(
-                "OpenAI client is not initialized. Make sure api_key is passed or OPENAI_API_KEY is set in the environment."
+                "Azure OpenAI client is not initialized. Make sure api_key is passed or AZURE_API_KEY/AZURE_OPENAI_API_KEY is set in the environment."
             )
 
         if _is_async is True:
@@ -156,7 +156,7 @@ class AzureBatchesAPI(BaseAzureLLM):
         )
         if azure_client is None:
             raise ValueError(
-                "OpenAI client is not initialized. Make sure api_key is passed or OPENAI_API_KEY is set in the environment."
+                "Azure OpenAI client is not initialized. Make sure api_key is passed or AZURE_API_KEY/AZURE_OPENAI_API_KEY is set in the environment."
             )
         response = azure_client.batches.cancel(**cancel_batch_data)
         return response
@@ -195,7 +195,7 @@ class AzureBatchesAPI(BaseAzureLLM):
         )
         if azure_client is None:
             raise ValueError(
-                "OpenAI client is not initialized. Make sure api_key is passed or OPENAI_API_KEY is set in the environment."
+                "Azure OpenAI client is not initialized. Make sure api_key is passed or AZURE_API_KEY/AZURE_OPENAI_API_KEY is set in the environment."
             )
 
         if _is_async is True:
diff --git a/litellm/llms/azure/common_utils.py b/litellm/llms/azure/common_utils.py
index 09b1888e04d..15569581eee 100644
--- a/litellm/llms/azure/common_utils.py
+++ b/litellm/llms/azure/common_utils.py
@@ -576,8 +576,19 @@ class BaseAzureLLM(BaseOpenAILLM):
         verbose_logger.debug(
             f"Initializing Azure OpenAI Client for {model_name}, Api Base: {str(api_base)}, Api Key:{_api_key}"
         )
+        
+        # Extract API key from multiple sources with proper precedence
+        resolved_api_key = (
+            api_key
+            or litellm_params.get("api_key")
+            or litellm.api_key
+            or litellm.azure_key
+            or get_secret_str("AZURE_OPENAI_API_KEY")
+            or get_secret_str("AZURE_API_KEY")
+        )
+
         azure_client_params = {
-            "api_key": api_key,
+            "api_key": resolved_api_key,
             "azure_endpoint": api_base,
             "api_version": api_version,
             "azure_ad_token": azure_ad_token,
diff --git a/litellm/llms/azure/files/handler.py b/litellm/llms/azure/files/handler.py
index 50c122ccf2c..d7b16d304d4 100644
--- a/litellm/llms/azure/files/handler.py
+++ b/litellm/llms/azure/files/handler.py
@@ -58,7 +58,7 @@ class AzureOpenAIFilesAPI(BaseAzureLLM):
         )
         if openai_client is None:
             raise ValueError(
-                "AzureOpenAI client is not initialized. Make sure api_key is passed or OPENAI_API_KEY is set in the environment."
+                "Azure OpenAI client is not initialized. Make sure api_key is passed or AZURE_API_KEY/AZURE_OPENAI_API_KEY is set in the environment."
             )
 
         if _is_async is True:
@@ -106,7 +106,7 @@ class AzureOpenAIFilesAPI(BaseAzureLLM):
         )
         if openai_client is None:
             raise ValueError(
-                "AzureOpenAI client is not initialized. Make sure api_key is passed or OPENAI_API_KEY is set in the environment."
+                "Azure OpenAI client is not initialized. Make sure api_key is passed or AZURE_API_KEY/AZURE_OPENAI_API_KEY is set in the environment."
             )
 
         if _is_async is True:
@@ -156,7 +156,7 @@ class AzureOpenAIFilesAPI(BaseAzureLLM):
         )
         if openai_client is None:
             raise ValueError(
-                "AzureOpenAI client is not initialized. Make sure api_key is passed or OPENAI_API_KEY is set in the environment."
+                "Azure OpenAI client is not initialized. Make sure api_key is passed or AZURE_API_KEY/AZURE_OPENAI_API_KEY is set in the environment."
             )
 
         if _is_async is True:
@@ -208,7 +208,7 @@ class AzureOpenAIFilesAPI(BaseAzureLLM):
         )
         if openai_client is None:
             raise ValueError(
-                "AzureOpenAI client is not initialized. Make sure api_key is passed or OPENAI_API_KEY is set in the environment."
+                "Azure OpenAI client is not initialized. Make sure api_key is passed or AZURE_API_KEY/AZURE_OPENAI_API_KEY is set in the environment."
             )
 
         if _is_async is True:
@@ -262,7 +262,7 @@ class AzureOpenAIFilesAPI(BaseAzureLLM):
         )
         if openai_client is None:
             raise ValueError(
-                "AzureOpenAI client is not initialized. Make sure api_key is passed or OPENAI_API_KEY is set in the environment."
+                "Azure OpenAI client is not initialized. Make sure api_key is passed or AZURE_API_KEY/AZURE_OPENAI_API_KEY is set in the environment."
             )
 
         if _is_async is True: