You need to have a object representing the user within Exchange. If said external users are invited as Guests to your tenant, you should have a matching GuestMailUser object you can add to the DG. If not, you will need to create a mail user/mail contact before adding them.
add users to DL
Glenn Maxwell
10,781
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Hi All
I am using exchange 2016 hybrid environment. i have some 50 external users and i want to add these users to exchange online DL. for example user1@domain1.com, user2@domain2.com. Do i need to create an external contact and add users to the DL. is there any other way to add external users to the DL without creating contact?