"535 5.7.3 Authentication unsuccessful" sending via smtp.office365.com

August 3, 2026 · View on GitHub

What this means: a generic SMTP auth rejection from Exchange Online. Your credentials are correct — the method (Basic authentication: plain username + password) is what's being refused. Three possible causes, all producing this identical error:

  1. An admin has already disabled SMTP AUTH for the mailbox or tenant (Set-CASMailbox/Set-TransportConfig -SmtpClientAuthenticationDisabled $true).
  2. Security Defaults is enabled (on by default for newer Microsoft 365 tenants) — this disables Basic auth for SMTP AUTH automatically.
  3. Microsoft's own scheduled default change: Basic auth for SMTP AUTH is disabled by default at the end of December 2026 (official timeline).

Fix paths: implement OAuth 2.0 (the official long-term answer), use a Direct Send/relay connector if the sender stays inside your tenant, or — for devices/scripts that can't do OAuth and don't need to send from your own domain — point them at a relay that still accepts plain username/password, like the free ZeroSMTP.

Full decision guide (every option honestly compared): https://docs.msgwing.com/EXCHANGE-ONLINE-SMTP-AUTH.html