diff --git a/components/device-mgt/org.wso2.carbon.device.mgt.core/src/main/java/org/wso2/carbon/device/mgt/core/config/DeviceManagementConfig.java b/components/device-mgt/org.wso2.carbon.device.mgt.core/src/main/java/org/wso2/carbon/device/mgt/core/config/DeviceManagementConfig.java
index e95fa19e51c..5d757f4f0bf 100644
--- a/components/device-mgt/org.wso2.carbon.device.mgt.core/src/main/java/org/wso2/carbon/device/mgt/core/config/DeviceManagementConfig.java
+++ b/components/device-mgt/org.wso2.carbon.device.mgt.core/src/main/java/org/wso2/carbon/device/mgt/core/config/DeviceManagementConfig.java
@@ -47,6 +47,7 @@ public final class DeviceManagementConfig {
     private DeviceStatusTaskConfig deviceStatusTaskConfig;
     private DeviceCacheConfiguration deviceCacheConfiguration;
     private GeoLocationConfiguration geoLocationConfiguration;
+    private String defaultGroupsConfiguration;
 
     @XmlElement(name = "ManagementRepository", required = true)
     public DeviceManagementConfigRepository getDeviceManagementConfigRepository() {
@@ -138,5 +139,14 @@ public final class DeviceManagementConfig {
     public void setGeoLocationConfiguration(GeoLocationConfiguration geoLocationConfiguration) {
         this.geoLocationConfiguration = geoLocationConfiguration;
     }
+
+    @XmlElement(name = "DefaultGroupsConfiguration", required = true)
+    public String getDefaultGroupsConfiguration() {
+        return defaultGroupsConfiguration;
+    }
+
+    public void setDefaultGroupsConfiguration(String defaultGroupsConfiguration) {
+        this.defaultGroupsConfiguration = defaultGroupsConfiguration;
+    }
 }
 
diff --git a/components/device-mgt/org.wso2.carbon.device.mgt.core/src/main/java/org/wso2/carbon/device/mgt/core/internal/DeviceManagementServiceComponent.java b/components/device-mgt/org.wso2.carbon.device.mgt.core/src/main/java/org/wso2/carbon/device/mgt/core/internal/DeviceManagementServiceComponent.java
index 3e087594054..32e9e978e10 100644
--- a/components/device-mgt/org.wso2.carbon.device.mgt.core/src/main/java/org/wso2/carbon/device/mgt/core/internal/DeviceManagementServiceComponent.java
+++ b/components/device-mgt/org.wso2.carbon.device.mgt.core/src/main/java/org/wso2/carbon/device/mgt/core/internal/DeviceManagementServiceComponent.java
@@ -26,6 +26,7 @@ import org.wso2.carbon.device.mgt.common.app.mgt.ApplicationManagementException;
 import org.wso2.carbon.device.mgt.common.authorization.DeviceAccessAuthorizationService;
 import org.wso2.carbon.device.mgt.common.configuration.mgt.PlatformConfigurationManagementService;
 import org.wso2.carbon.device.mgt.common.geo.service.GeoService;
+import org.wso2.carbon.device.mgt.common.group.mgt.GroupManagementException;
 import org.wso2.carbon.device.mgt.common.notification.mgt.NotificationManagementService;
 import org.wso2.carbon.device.mgt.common.operation.mgt.OperationManagementException;
 import org.wso2.carbon.device.mgt.common.operation.mgt.OperationManager;
@@ -253,6 +254,21 @@ public class DeviceManagementServiceComponent {
 
         /* Registering Group Management Service */
         GroupManagementProviderService groupManagementProvider = new GroupManagementProviderServiceImpl();
+        String defaultGroups =
+                DeviceConfigurationManager.getInstance().getDeviceManagementConfig().getDefaultGroupsConfiguration();
+        List<String> groups = this.parseDefaultGroups(defaultGroups);
+        for(String group : groups){
+            try {
+                groupManagementProvider.createDefaultGroup(group);
+            } catch (GroupManagementException e) {
+                // Error is ignored, because error could be group already exist exception. Therefore it does not require
+                // to print the error.
+                if(log.isDebugEnabled()){
+                    log.error("Error occurred while adding the group");
+                }
+            }
+        }
+
         DeviceManagementDataHolder.getInstance().setGroupManagementProviderService(groupManagementProvider);
         bundleContext.registerService(GroupManagementProviderService.class.getName(), groupManagementProvider, null);
 
@@ -311,6 +327,19 @@ public class DeviceManagementServiceComponent {
         }
     }
 
+    private List<String> parseDefaultGroups(String defaultGroups) {
+        List<String> defaultGroupsList = new ArrayList<>();
+        if (defaultGroups != null && !defaultGroups.isEmpty()) {
+            String gps[] = defaultGroups.split(",");
+            if (gps.length != 0) {
+                for(String group : gps){
+                    defaultGroupsList.add(group.trim());
+                }
+            }
+        }
+        return defaultGroupsList;
+    }
+
     /**
      * Sets Device Manager service.
      *
@@ -320,7 +349,7 @@ public class DeviceManagementServiceComponent {
         try {
             if (log.isDebugEnabled()) {
                 log.debug("Setting Device Management Service Provider: '" +
-                                  deviceManagementService.getType() + "'");
+                        deviceManagementService.getType() + "'");
             }
             synchronized (LOCK) {
                 deviceManagers.add(deviceManagementService);
diff --git a/components/device-mgt/org.wso2.carbon.device.mgt.core/src/main/java/org/wso2/carbon/device/mgt/core/service/GroupManagementProviderService.java b/components/device-mgt/org.wso2.carbon.device.mgt.core/src/main/java/org/wso2/carbon/device/mgt/core/service/GroupManagementProviderService.java
index 875cc859e56..054a923c437 100644
--- a/components/device-mgt/org.wso2.carbon.device.mgt.core/src/main/java/org/wso2/carbon/device/mgt/core/service/GroupManagementProviderService.java
+++ b/components/device-mgt/org.wso2.carbon.device.mgt.core/src/main/java/org/wso2/carbon/device/mgt/core/service/GroupManagementProviderService.java
@@ -212,4 +212,12 @@ public interface GroupManagementProviderService {
      */
     List<DeviceGroup> getGroups(DeviceIdentifier deviceIdentifier) throws GroupManagementException;
 
+    /**
+     * Checks for the default group existence and create group based on device ownership.
+     * @param groupName
+     * @return
+     * @throws GroupManagementException
+     */
+    DeviceGroup createDefaultGroup(String groupName) throws GroupManagementException;
+
 }
diff --git a/components/device-mgt/org.wso2.carbon.device.mgt.core/src/main/java/org/wso2/carbon/device/mgt/core/service/GroupManagementProviderServiceImpl.java b/components/device-mgt/org.wso2.carbon.device.mgt.core/src/main/java/org/wso2/carbon/device/mgt/core/service/GroupManagementProviderServiceImpl.java
index 626b086528d..ad8ecf77d1e 100644
--- a/components/device-mgt/org.wso2.carbon.device.mgt.core/src/main/java/org/wso2/carbon/device/mgt/core/service/GroupManagementProviderServiceImpl.java
+++ b/components/device-mgt/org.wso2.carbon.device.mgt.core/src/main/java/org/wso2/carbon/device/mgt/core/service/GroupManagementProviderServiceImpl.java
@@ -30,10 +30,7 @@ import org.wso2.carbon.device.mgt.common.DeviceNotFoundException;
 import org.wso2.carbon.device.mgt.common.GroupPaginationRequest;
 import org.wso2.carbon.device.mgt.common.PaginationResult;
 import org.wso2.carbon.device.mgt.common.TransactionManagementException;
-import org.wso2.carbon.device.mgt.common.group.mgt.DeviceGroup;
-import org.wso2.carbon.device.mgt.common.group.mgt.GroupAlreadyExistException;
-import org.wso2.carbon.device.mgt.common.group.mgt.GroupManagementException;
-import org.wso2.carbon.device.mgt.common.group.mgt.RoleDoesNotExistException;
+import org.wso2.carbon.device.mgt.common.group.mgt.*;
 import org.wso2.carbon.device.mgt.core.dao.GroupDAO;
 import org.wso2.carbon.device.mgt.core.dao.GroupManagementDAOException;
 import org.wso2.carbon.device.mgt.core.dao.GroupManagementDAOFactory;
@@ -572,4 +569,31 @@ public class GroupManagementProviderServiceImpl implements GroupManagementProvid
             GroupManagementDAOFactory.closeConnection();
         }
     }
+
+    /**
+     * {@inheritDoc}
+     */
+    @Override
+    public DeviceGroup createDefaultGroup(String groupName) throws GroupManagementException {
+
+        DeviceGroup defaultGroup = this.getGroup(groupName);
+        if (defaultGroup == null) {
+            defaultGroup = new DeviceGroup(groupName);
+            // Setting system level user (wso2.system.user) as the owner
+            defaultGroup.setOwner(CarbonConstants.REGISTRY_SYSTEM_USERNAME);
+            defaultGroup.setDescription("Default system group for devices with " + groupName + " ownership.");
+            try {
+                this.createGroup(defaultGroup, DeviceGroupConstants.Roles.DEFAULT_ADMIN_ROLE,
+                        DeviceGroupConstants.Permissions.DEFAULT_ADMIN_PERMISSIONS);
+            } catch (GroupAlreadyExistException e) {
+                if (log.isDebugEnabled()) {
+                    log.debug("Default group: " + defaultGroup.getName() + " already exists. Skipping group creation.",
+                            e);
+                }
+            }
+            return this.getGroup(groupName);
+        } else {
+            return defaultGroup;
+        }
+    }
 }
diff --git a/features/device-mgt/org.wso2.carbon.device.mgt.server.feature/src/main/resources/conf/cdm-config.xml b/features/device-mgt/org.wso2.carbon.device.mgt.server.feature/src/main/resources/conf/cdm-config.xml
index 0f0312f977d..fbf6103cfff 100644
--- a/features/device-mgt/org.wso2.carbon.device.mgt.server.feature/src/main/resources/conf/cdm-config.xml
+++ b/features/device-mgt/org.wso2.carbon.device.mgt.server.feature/src/main/resources/conf/cdm-config.xml
@@ -82,5 +82,6 @@
         <isEnabled>false</isEnabled>
         <PublishLocationOperationResponse>false</PublishLocationOperationResponse>
     </GeoLocationConfiguration>
+    <DefaultGroupsConfiguration>BYOD,COPE</DefaultGroupsConfiguration>
 </DeviceMgtConfiguration>