Prerequisites
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Microsoft 365 administrator permissions.
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Identify the specific user/mailbox you wish to enable external forwarding for.
Steps
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Log in to the Microsoft 365 Defender portal as an administrator. Go to Email & Collaboration → Threat policies → Anti-spam policies
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Click “+ Create policy” and select type Outbound (this is to create a new outbound spam policy).
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Give the policy a Name and optionally a Description to identify it (something like “External forwarding for user X”).
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On the Users selection screen, search for and select the user/mailbox that you want to enable forwarding for.
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Proceed to the Forwarding rules section of the policy. Under Automatic Forwarding Rules, choose “On – Forwarding is enabled.”
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Review your settings, and then Create the new policy (or Save) to apply it.
Aftermath / Troubleshooting
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Ensure there are no other conflicting policies or rules that block external forwarding (such as transport rules, DLP rules, etc.).
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If forwarding still fails, verify the bounce message or error log; often Microsoft 365 will send a bounce saying:
550 5.7.520 Access denied, Your organization does not allow external forwarding.
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Also, if your Microsoft 365 was obtained via a reseller or via GoDaddy, sometimes the settings interfaces or methods differ. GoDaddy has its own instructions for enabling external email forwarding.