The error means that Microsoft blocks the basic SMTP login with user name and password for your mailbox or your Microsoft 365 tenant. You can set up the login via Microsoft OAuth, or enable SMTP AUTH for the mailbox and use an app password.

Error message

When you test or send, Failed to authenticate on SMTP server with username "…" appears together with 535 5.7.139 Authentication unsuccessful, SmtpClientAuthentication is disabled for the Tenant. In some cases, emails are not sent and no entry appears in the log.

Solution A: Login via Microsoft OAuth

1. Open Setup » Client » Global » Email accounts.
2. Click the plus icon and select Microsoft Outlook under Provider.
3. Log in with the Microsoft account and allow access.
4. Then test email sending.

If you set up the OAuth connection earlier and it no longer works, set it up again.

Solution B: SMTP with an app password

1. In the Microsoft 365 admin center, under Active users » Mail » Manage email apps, enable Authenticated SMTP for the mailbox.
2. Create an app password in the security settings of your Microsoft account. If the security defaults of your tenant are active, this function is not available. Use solution A in that case.
3. In Setup » Client » Global » Email accounts, select the provider Other. Enter smtp.office365.com as SMTP server, 587 with TLS as port, the mailbox address as user name and the app password as password.

Changes in the Microsoft tenant sometimes take a while to take effect.