Oauth2 for SMTP.Send granting AccessToken but returns 535: 5.7.3 Authentication unsuccessful when used

Question

Our application was updated late last year to support Oauth2 for obtaining (via IMAP) and sending (via SMTP) emails on behalf of outlook.com consumer accounts. (Edit: See responses below if experiencing the problem with Microsoft 365 accounts.)

We have both SAS and premise based deployments which were tested as able to send and receive in December 2022, but are now getting 5.7.3 Authentication unsuccessful when attempting to authenticate with the SMTP server. IMAP continues to work just fine.

Here's an example flow:

User is prompted for authorization:

https://login.microsoftonline.com:443/common/oauth2/v2.0/authorize?prompt=consent&response_type=code&state=59b234bd-fdc0-4905-8e57-bbd4b091cf4f&scope=https%3a%2f%2foutlook.office.com%2fSMTP.Send+https%3a%2f%2foutlook.office.com%2fIMAP.AccessAsUser.All+offline_access&access_type=offline&redirect_uri=http%3a%2f%2flocalhost%3a68%2fEmail%2foauth%2f&login_hint={outlook.com email address}&client_id={our registered + verified clientid}

The scopes are

https://outlook.office.com/SMTP.Send

https://outlook.office.com/IMAP.AccessAsUser.All

offline_access

We receive our callback after the user logs in and provides permission.

?code={access_code}&state=59b234bd-fdc0-4905-8e57-bbd4b091cf4f

Then call to exchange the access code for a token...

https://login.microsoftonline.com/common/oauth2/v2.0/token

client_id={client id}&code={access code}&redirect_uri=http%3a%2f%2flocalhost%3a68%2fEmail%2foauth%2f&grant_type=authorization_code

...and receive our access and refresh tokens in response.

{
  "token_type": "Bearer",
  "scope": "https://outlook.office.com/SMTP.Send https://outlook.office.com/IMAP.AccessAsUser.All",
  "expires_in": "3600",
  "ext_expires_in": "3600",
  "access_token": "{access_token}",
  "refresh_token": "{refresh_token}"
}

MailKit is then used to connect and authenticate to the IMAP server outlook.office365.com. No errors. New mail can be read from the user's inbox.

But attempting to authenticate the SMTP (again using MailKit) client results in "535: 5.7.3 Authentication unsuccessful"

The same SaSLMechanismOAuth2 with the account's email address and current access token are used for both.

Other notes:

• Our Application ID / Client ID on Azure AD has been verified.
• I haven't been able to identify any changes in our methodology since this was tested as working in December.
• I tried some variations on the scope, such as including https://graph.microsoft.com/SMTP.Send but this made no difference.
• I'd prefer not to use any separate Graph APIs for sending email as our product must communicate with other SMTP servers/providers
• I'm aware that SMTP Authentication can still be used, but since we can no longer use basic authentication for IMAP or POP, I'd prefer not to store the user's credentials at all.
• I added additional API permissions to our clientId but again no effect (screenshot below)

Answer 1

The issue with sending on behalf of outlook.com consumer addresses appears to have been resolved.

Answer 2

Hi all, it seems there was a mystery fix happened on MS side. It is now working. :)
Anyway, due to this issue I was able to produce a Test Tool written in Rust Programming Language just to test this workflow. https://github.com/LorenzoLeonardo/microsoft-smtp-xoauth2-test-tool

Answer 3

@Will Wilding

Thanks for your time and patience. I was able to test this with Gmail and got authentication error as "SMTP AUTH" is disabled in your tenant, The issue was fixed after enabling Authenticated SMTP.

In your tenant kindly validate the following :

• If Authenticated SMTP is enabled for your impacted user (this setting does over ride tenant configuration)

1. Navigate to https://admin.microsoft.com/Adminportal/Home?source=applauncher#/users
2. Select the user you are testing this with.
3. Ensure "Authenticated SMTP" is checked.

• Please ensure to uncheck "Turn off SMTP AUTH protocol for your organization" by navigating to https://admin.exchange.microsoft.com/#/settings

• Please validate if security defaults has been disabled in your organization.

• If your authentication policy disables basic authentication for SMTP, clients cannot use the SMTP AUTH protocol even if you enable the settings outlined in this article. For more information, see Disable Basic authentication in Exchange Online.

Thanks,

Akshay Kaushik

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