diff --git a/CHANGELOG.md b/CHANGELOG.md
index 050bd0c2..2c460410 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -8,6 +8,7 @@
 
 ## Changes since v7.8.2
 
+- [#3031](https://github.com/oauth2-proxy/oauth2-proxy/pull/3031) Fixes Refresh Token bug with Entra ID and Workload Identity (#3027)[https://github.com/oauth2-proxy/oauth2-proxy/issues/3028] by using client assertion when redeeming the token (@richard87)
 - [#3001](https://github.com/oauth2-proxy/oauth2-proxy/pull/3001) Allow to set non-default authorization request response mode (@stieler-it)
 - [#3041](https://github.com/oauth2-proxy/oauth2-proxy/pull/3041) chore(deps): upgrade to latest golang v1.23.x release (@TheImplementer)
 
diff --git a/providers/ms_entra_id.go b/providers/ms_entra_id.go
index 330c7875..df1f38a4 100644
--- a/providers/ms_entra_id.go
+++ b/providers/ms_entra_id.go
@@ -8,7 +8,9 @@ import (
 	"net/url"
 	"os"
 	"regexp"
+	"time"
 
+	"github.com/coreos/go-oidc/v3/oidc"
 	"github.com/oauth2-proxy/oauth2-proxy/v7/pkg/apis/options"
 	"github.com/oauth2-proxy/oauth2-proxy/v7/pkg/apis/sessions"
 	"github.com/oauth2-proxy/oauth2-proxy/v7/pkg/logger"
@@ -114,7 +116,8 @@ func (p *MicrosoftEntraIDProvider) redeemWithFederatedToken(ctx context.Context,
 
 	params := url.Values{}
 
-	// create custom exchange parameters
+	// Exchange parameters for token federation
+	// https://learn.microsoft.com/en-us/entra/identity-platform/v2-oauth2-auth-code-flow#request-an-access-token-with-a-certificate-credential
 	if codeVerifier != "" {
 		params.Add("code_verifier", codeVerifier)
 	}
@@ -125,29 +128,78 @@ func (p *MicrosoftEntraIDProvider) redeemWithFederatedToken(ctx context.Context,
 	params.Add("code", code)
 	params.Add("grant_type", "authorization_code")
 
-	// perform exchange
-	resp := requests.New(p.RedeemURL.String()).
-		WithContext(ctx).
-		WithMethod("POST").
-		WithBody(bytes.NewBufferString(params.Encode())).
-		SetHeader("Content-Type", "application/x-www-form-urlencoded").
-		Do()
-
-	// prepare token of type *oauth2.Token
-	var token *oauth2.Token
-	var rawResponse interface{}
-
-	body := resp.Body()
-	if err := json.Unmarshal(body, &rawResponse); err != nil {
-		return nil, err
+	token, err := p.fetchToken(ctx, params)
+	if err != nil {
+		return nil, fmt.Errorf("error fetching token: %w", err)
 	}
 
-	if err := json.Unmarshal(body, &token); err != nil {
-		return nil, err
+	return p.OIDCProvider.createSession(ctx, token, false)
+}
+
+// RefreshSession uses the RefreshToken to fetch new Access and ID Tokens
+func (p *MicrosoftEntraIDProvider) RefreshSession(ctx context.Context, s *sessions.SessionState) (bool, error) {
+	if s == nil || s.RefreshToken == "" {
+		return false, nil
 	}
 
-	// create session using new token and generic OIDC provider
-	return p.OIDCProvider.createSession(ctx, token.WithExtra(rawResponse), false)
+	var err error
+	ctx = oidc.ClientContext(ctx, requests.DefaultHTTPClient)
+	if p.federatedTokenAuth {
+		err = p.redeemRefreshTokenWithFederatedToken(ctx, s)
+	} else {
+		err = p.redeemRefreshToken(ctx, s)
+	}
+
+	if err != nil {
+		return false, fmt.Errorf("unable to redeem refresh token: %v", err)
+	}
+
+	return true, nil
+}
+
+// redeemRefreshTokenWithFederatedToken uses a RefreshToken and federated credentials with the RedeemURL to refresh the
+// Refresh Token, Access Token and ID Token
+func (p *MicrosoftEntraIDProvider) redeemRefreshTokenWithFederatedToken(ctx context.Context, s *sessions.SessionState) error {
+	federatedTokenPath := os.Getenv("AZURE_FEDERATED_TOKEN_FILE")
+	federatedToken, err := os.ReadFile(federatedTokenPath)
+	if err != nil {
+		return fmt.Errorf("error reading federated token file %s: %s", federatedTokenPath, err)
+	}
+
+	params := url.Values{}
+	params.Add("client_id", p.ClientID)
+	params.Add("client_assertion", string(federatedToken))
+	params.Add("client_assertion_type", "urn:ietf:params:oauth:client-assertion-type:jwt-bearer")
+	params.Add("refresh_token", s.RefreshToken)
+	params.Add("grant_type", "refresh_token")
+	params.Add("expiry", time.Now().Add(-time.Hour).Format(time.RFC3339))
+
+	token, err := p.fetchToken(ctx, params)
+	if err != nil {
+		return fmt.Errorf("error fetching token: %w", err)
+	}
+
+	newSession, err := p.OIDCProvider.createSession(ctx, token, true)
+	if err != nil {
+		return fmt.Errorf("unable create new session state from response: %v", err)
+	}
+
+	// Update the ID Token and user details if returned as part of the refresh response
+	// ref. https://openid.net/specs/openid-connect-core-1_0.html#RefreshTokenResponse
+	if newSession.IDToken != "" {
+		s.IDToken = newSession.IDToken
+		s.Email = newSession.Email
+		s.User = newSession.User
+		s.Groups = newSession.Groups
+		s.PreferredUsername = newSession.PreferredUsername
+	}
+
+	s.AccessToken = newSession.AccessToken
+	s.RefreshToken = newSession.RefreshToken
+	s.CreatedAt = newSession.CreatedAt
+	s.ExpiresOn = newSession.ExpiresOn
+
+	return nil
 }
 
 // checkGroupOverage checks ID token's group membership claims for the group overage
@@ -245,3 +297,26 @@ func (p *MicrosoftEntraIDProvider) checkTenantMatchesTenantList(tenant string, a
 	}
 	return false
 }
+
+func (p *MicrosoftEntraIDProvider) fetchToken(ctx context.Context, params url.Values) (*oauth2.Token, error) {
+	resp := requests.New(p.RedeemURL.String()).
+		WithContext(ctx).
+		WithMethod("POST").
+		WithBody(bytes.NewBufferString(params.Encode())).
+		SetHeader("Content-Type", "application/x-www-form-urlencoded").
+		Do()
+
+	var token *oauth2.Token
+	var rawResponse interface{}
+
+	body := resp.Body()
+	if err := json.Unmarshal(body, &rawResponse); err != nil {
+		return nil, fmt.Errorf("unable to unmarshal raw response body: %w", err)
+	}
+
+	if err := json.Unmarshal(body, &token); err != nil {
+		return nil, fmt.Errorf("unable to unmarshal token response body: %w", err)
+	}
+
+	return token.WithExtra(rawResponse), nil
+}