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I have a BCS External List that is giving me the data that I want. Currently that data is usernames (domain\username).

Is there anyway to sync/import/connect an External List with a SharePoint Group?

I would like to have the users from the external list appear within a SharePoint group for purposes of permissions and target audiences.

Any thoughts?

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You might want to look into Claims Augmentation.

Instead of replicating groups the claims provider will enable users to browse them directly in the people picker and during login you can augment each user with the groups they are a member of.

If generating the list of groups a user is a member of is too expensive to perform during login then you could use BCS User Profile Synchronization to replicate the set of groups into the users profile and claims augmentation could then just read the users profile.

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