Error when converting a distribution group

Question

I am trying to convert an exchange distribution list group to a Microsoft 365 group. It is a cloud group, not on-prem, but when I try to send the upgrade request to the group owner, I get the following error message: "We encountered an error while sending upgrade requests."
I have tried removing all members from the group and upgrading, but this results in the same error message.

I don't have the luxury of deleting the group and starting a new one with the same name, because this email is messaged daily and with the change to Classic Outlook, I wouldn't be able to easily remove the quick-fill email option for the email address and it would result in bounce back emails.

Has anyone encountered this before and been able to successfully convert the group type?

Answer 1

Hi @Kyle

Thank you for sharing your concern. 

You may refer to AI's suggestion first. Based on my research, this issue is most likely because the DL is ineligible for in-place upgrade (nested groups, special members, email address policy, or other disqualifiers). 

You could try to run the eligibility checks in Exchange Online PowerShell and inspect any custom email address policies: 

Connect-ExchangeOnline 

Get-EligibleDistributionGroupForMigration -Identity "Your DL group" 

Additionally, you could try to run the following PowerShell cmdlet to upgrade and see if it helps: 

Upgrade-DistributionGroup -DlIdentities "Your DL group" 

To ensure I fully understand your situation and provide the most effective assistance, I’ll need a few additional details, such as: 

May I know your current admin role in the tenant? 

What is the result when you run the command Get-EligibleDistributionGroupForMigration? 

In order to better support you, I will open a private message in this thread. Please share a screenshot of PowerShell result in your side there so that I can better understand the issue. This approach helps to protect your personal information and prevents sensitive information from becoming publicly visible. 

To view or send private messages, please sign in to the Microsoft Q&A forum with the account that was used to create this thread, and then select "Private messages" 

Any update would be appreciated. 

Please understand that our initial reply may not always immediately resolve the issue. However, with your help and more detailed information, we can work together to find a solution.  

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Answer 2

The error when sending the upgrade request typically indicates that the distribution list is not eligible to be converted to a Microsoft 365 group, even if it appears as a cloud group.

Only cloud‑managed, simple, non‑nested distribution lists can be upgraded. A distribution list cannot be upgraded if any of the following apply:

1. It is nested (has child groups or is a member of another group).
2. It is on‑premises–managed (dirsync/hybrid).
3. It has more than 100 owners.
4. It has only members and no owner.
5. It has no members.
6. It has one or more members whose RecipientTypeDetails is not UserMailbox, SharedMailbox, TeamMailbox, or MailUser.
7. It is configured as the forwarding address for a shared mailbox.
8. It is part of a sender restriction in another distribution list.
9. It has an alias that contains special characters.
10. It is a mail‑enabled security group.
11. It is a dynamic distribution group.
12. It was converted to a room list.

Additionally, if a custom email address policy that uses IncludeUnifiedGroupRecipients is applied in the tenant, the upgrade operation can fail.

Recommended checks and workaround:

1. In Exchange Online PowerShell, run Get-EligibleDistributionGroupForMigration and verify whether this distribution list is returned as eligible. If it is not listed, it meets at least one of the disqualifying conditions above.
2. If the list should be eligible based on the conditions, check for any custom email address policies that include unified groups. If such a policy exists, remove that policy, perform the upgrade, and then recreate the policy as described in the documentation.
3. If the list was ever converted to a room list (for example via Set-DistributionGroup <group> -RoomList), it cannot be upgraded. In that case, create a new Microsoft 365 group and manage the transition (for example, by keeping the existing SMTP address on the new group if/when the old DL is removed) rather than using the in‑place upgrade.

If none of the above applies and the group is returned as eligible by Get-EligibleDistributionGroupForMigration, use the PowerShell cmdlet Upgrade-DistributionGroup instead of the EAC UI to attempt the upgrade and review any error returned by the cmdlet for more detail.

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References:

• Upgrade Distribution Lists to Microsoft 365 Groups
• Convert an existing Distribution List to a Microsoft 365 Group
• Can't upgrade distribution lists to Microsoft 365 Groups
• Upgrade-DistributionGroup
• (Cannot determine group type) error when checking group in Microsoft 365 admin center
• Administrator guide to Microsoft 365 Groups in Outlook