Internal vs External Penetration Testing—and When to Use Each

Cyber threats are all around us. Hackers are always looking to find a way in. Sometimes from the outside, sometimes from the inside. The only way to know if your defenses can hold up is to test them. That’s where penetration testing comes in.

But here’s the big question: Should you test for external threats trying to break in or internal threats already inside your network? That’s the difference between internal vs external penetration testing.

External penetration testing checks for weak spots in internet-facing systems like websites, firewalls, and servers. In contrast, internal penetration testing looks at what happens if an attacker already has access. Both matter. A lot. Because the last thing you want is to think you’re secure—only to find out the hard way that you’re not.

So, which test do you need? This article discusses the key differences between internal and external penetration testing, why both are important, and when to use them.

What Is Penetration Testing?

Hackers don’t knock—they break in. And they’re always looking for new ways to do it. That’s where penetration testing (or pen testing) comes in.

Think of it as if you’re hiring a locksmith to pick your locks and see how they hold up. Ethical hackers simulate attacks to find security weaknesses before criminals can exploit them.

Penetration testing goes beyond basic vulnerability assessments. It exploits internal vulnerabilities and external defenses to see how far an attacker can get.

Pen testing helps identify critical vulnerabilities before they become full-blown breaches, whether caused by an external attack on your internet-facing systems or a malicious insider trying to escalate access.

Why Does Penetration Testing Matter?

Penetration testing involves taking a proactive approach to cybersecurity. It helps organizations stay ahead of evolving threats. Simulating attacks reveals vulnerabilities before hackers can exploit them. That way, you can prevent data breaches, financial losses, and reputational damage.

New threats are emerging constantly, even with firewalls, antivirus software, and automated security scans in place. Misconfigurations or overlooked weaknesses can leave systems exposed. Penetration testing helps to give you a deep level of security. It ensures that your defenses can hold up against real attackers, not just automated scans.

Penetration testing goes beyond just reducing risk. It also helps you meet compliance requirements, build customer trust, and ensure business continuity. Investing in regular testing is way less costly than dealing with a breach. In this case, the damage often extends beyond financial penalties to lost customers and lasting brand damage.

That’s why penetration testing is a necessity. Regular internal and external network penetration tests can help businesses stay one step ahead of unauthorized access and real-world attacks.

Whether you’re worried about your internal systems or external threats, penetration testing is your best chance of keeping cybercriminals out.

What Is External Penetration Testing?

Imagine a hacker in a coffee shop scanning for weak points in your company’s internet-facing systems. That’s exactly what external penetration testing simulates.

It’s a cybersecurity exercise where ethical hackers attack your network from the outside like an actual cybercriminal would.

The goal? Break in before hackers do.

External penetration tests focus on finding vulnerabilities in firewalls, servers, and web applications exposed to the internet.

These are your company’s first lines of defense, but attackers can slip through for malicious activities if they’re misconfigured or unpatched.

A solid external pen test helps:

• Identify firewall misconfigurations and security holes
• Tests public web applications for weak spots (SQL injection, cross-site scripting, etc.)
• Analyzes email and remote access services for potential exploitation
• Locate vulnerabilities by attempting to breach wireless networks from nearby locations

Common External Scenarios

An external hacker might try to:

• Exploit a zero-day vulnerability to gain unauthorized access
• Use social engineering to trick employees into revealing credentials
• Crack weak Wi-Fi security from the parking lot

External penetration testing ensures your defenses hold up against outside attacks—before a real hacker finds the cracks.

What Is Internal Penetration Testing?

While external network penetration testing simulates attacks from outsiders, internal penetration tests mimic threats that already have a foot in the door. Whether from compromised credentials, insider threats, or malware bypassing defenses.

This test evaluates how well an organization can detect and contain an attacker once they’re inside the network.

Why Is Internal Testing Important?

Once an attacker gains initial access—whether through a phished employee login, stolen VPN credentials, or malware on a company laptop—they often try to access sensitive data, disrupt operations, or deploy ransomware.

Internal pen testing helps security teams:

• Evaluate internal controls (Are there effective barriers preventing unauthorized access?)
• Test user privileges (Can a basic employee escalate to an admin account?)
• Simulate ransomware attacks (How fast can detection and response mechanisms kick in?)

Common Internal Testing Scenarios

1. Insider Threats: A rogue employee misuses their access to steal or destroy data.
2. Ransomware Simulations: Testing how fast malware could spread across internal systems.        
3. Trusted NPT (Network Penetration Testing): What if an attacker starts with limited but legitimate access?
        For example:
   • A partner’s VPN credentials get stolen.                
   • A vendor’s laptop is compromised.                
   • A basic employee account with Microsoft 365 access is hacked.         

Internal threats are a huge risk: 68% of data breaches involve human error or social engineering. Even well-intentioned employees can unknowingly create openings for attackers.

Internal penetration testing lets your organization detect and contain these threats before they escalate.

Key Differences Between External vs Internal Penetration Testing

Internal vs external pen testing serve separate but complementary roles in cybersecurity.

External testing focuses on perimeter defenses, simulating attacks from hackers outside the network.

In contrast, internal testing assumes the attacker has already gained access and evaluates how far they can go.

Key Differences

Both types of testing are essential—external tests harden entry points, while internal tests make sure that a breach doesn’t become a catastrophe. Without both, you leave potential gaps that attackers can exploit.

When to Use Internal vs. External Penetration Testing

Choosing between internal and external penetration testing depends on your organization’s security goals and risk factors. While both are important, the proper test at the right time can prevent costly breaches.

When to Use Internal Penetration Testing

Internal testing is crucial when evaluating insider threats and access control weaknesses. It’s best suited for situations like:

• After a security breach: To assess how far an attacker could have moved within your internal networks.
• Following significant system changes: To prepare to migrate to a new identity provider (e.g., Azure AD).
• Before or after a ransomware readiness assessment: To test internal response and containment.
• Trusted NPT scenarios: When evaluating risks from vendor access, VPN users, or employee accounts.

When to Use External Penetration Testing

External testing is vital for hardening internet-facing assets. You should prioritize it when:

• Deploying a new internet-facing web app or API: Helps check for vulnerabilities before you launch.
• Implementing new firewall rules or cloud configurations: Ensures proper security controls.
• Preparing for a merger or acquisition: Identifies vulnerabilities in newly acquired, previously external systems before integration.

The bottom line on the difference between internal and external penetration testing is this: External tests keep attackers out, while internal tests identify the damage they can inflict from within. Organizations benefit most when combining both strategically.

The Role of Internal and External Penetration Testing in a Cybersecurity Strategy

A strong cybersecurity strategy isn’t just about locking the doors. It’s also about securing everything inside.

By combining internal and external penetration testing, your organization gets a holistic view of its vulnerabilities, protecting it from outside attackers and insider threats.

Why does this matter? Cyber threats evolve constantly.

According to the Verizon 2024 Data Breach Investigations Report, 31% of breaches over the past decade involved stolen credentials, making weak or compromised authentication systems a significant factor.

The report also notes a rise in zero-day vulnerabilities being used in ransomware attacks. A major concern cited is that half of critical vulnerabilities take an average of 55 days to remediate, leaving organizations vulnerable to attacks in the meantime.

Regular penetration testing helps businesses identify and fix these risks before they get exploited. External testing protects internet-facing systems, while internal testing ensures that bad actors inside the network can’t move freely.

By making penetration testing a routine part of security operations, you can stay ahead of evolving threats, protect sensitive data, and maintain customer trust.

Conclusion: Building a Robust Penetration Testing Strategy with All Covered

For a strong security posture, it’s critical to understand the differences between internal and external penetration testing and when to use each. While external testing can help keep attackers out, internal testing ensures that if they get in, they can’t go far.

At All Covered, we offer professional penetration testing services tailored to your organization’s needs. Whether you’re securing web applications, cloud environments, or internal networks, our experts are here to help.

Are you ready to strengthen your security? Contact us today to learn more about our penetration testing solutions. Or if you’d like to dive deeper into penetration testing for yourself, download our free Guide to Pen Testing to learn the best practices, testing strategies, and how to strengthen your cybersecurity defenses.