unable to share files with External users on teams

Question

Issue Summary: Collaboration with an external organization in MS Teams, it is not allowing us to

Issue Description: Hello - we have updated our configurations in Entra and MS Teams to allow a specific collaboration with an external company but these updates are still preventing us from sharing documents in MS Teams. We need to allow the two teams to be able to share files and download them.

The configuration is not working and I need some assistance ASAP.

These are the steps that we have done in both of the organizations:

We are currently configuring cross-organization collaboration in Microsoft Teams, and everything is working except file sharing between our organizations.

To enable file sharing in Teams chats and channels, both organizations must configure Cross-Tenant Access Settings and SharePoint/OneDrive external sharing in Microsoft Entra.

Below are the exact steps required on your side.

Required configuration on your side

Please complete the following steps in Microsoft Entra admin center:

1. Add our tenant

Go to: External Identities → Cross-tenant access settings → Organizational settings

Select Add organization

Enter our domain:

geekgroupllc.com (replace with your real domain if different)

Save the configuration

2. Configure INBOUND access (your users accessing our resources)

Inside the added organization:

Inbound access → B2B collaboration

Users and groups: Allow

Applications: Allow

Inbound access → B2B direct connect

Users and groups: Allow

Applications: Allow

Trust settings

Trust multifactor authentication: Enable

Trust compliant devices: Enable (optional but recommended)

3. Configure OUTBOUND access (our users accessing your resources)

Outbound access → B2B collaboration

Users and groups: Allow

Applications: Allow

Outbound access → B2B direct connect

Users and groups: Allow

Applications: Allow

4. Enable Microsoft Teams shared channels

(Required for files to work across organizations)

Apps → Microsoft Teams

Shared channels: Allow

Invitations: Allow

5. Enable external sharing in SharePoint and OneDrive

This part is mandatory — without it, Teams file sharing will not work, even if all Teams settings are correct.

In the SharePoint admin center:

SharePoint external sharing level: New and existing guests (or more permissive)

OneDrive external sharing level: New and existing guests (or more permissive)

Optional: Add our domain to allowed domains list if domain restrictions are enabled.

Issue Type: 365

Upload log files/diagnostics: No

When did you first discover the issue?: 2025-12-12 07:00:00

Requested Severity Level: P3

Answer 1

To enable file sharing between your organization and the external organization in Microsoft Teams, ensure that both organizations have correctly configured the necessary settings in Microsoft Entra and SharePoint/OneDrive. Here are some key points to check based on your description:

1. Cross-Tenant Access Settings: Make sure that both inbound and outbound access settings are correctly configured to allow users and applications. This includes enabling B2B collaboration and B2B direct connect settings for both organizations.
2. Microsoft Teams Shared Channels: Verify that shared channels are allowed in the Teams settings under the Apps section. This is crucial for file sharing to work across organizations.
3. SharePoint and OneDrive External Sharing: This is a mandatory step. Ensure that the external sharing settings in SharePoint and OneDrive are set to allow new and existing guests. Without this configuration, file sharing in Teams will not function, even if Teams settings are correct.
4. Trust Settings: If you have enabled trust settings for multifactor authentication and compliant devices, ensure that these are properly configured as well.

If you have completed all these steps and are still facing issues, it may be beneficial to check for any specific error messages or logs that could provide more insight into the problem. Additionally, confirm that both organizations have completed their configurations as intended.

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References:

• Collaborate with external participants in a shared channel
• Collaborating with people outside your organization

Answer 2

Dear @Montoya, Mabelle,

Thank you for posting your question in the Microsoft Q&A forum and providing detailed information about the steps you’ve taken. Based on your description, the issue is likely related to SharePoint/OneDrive external sharing settings, as Teams file sharing relies on these services. Even if cross-tenant access and Teams policies are configured correctly, file sharing will fail if SharePoint and OneDrive external sharing is not properly enabled. 

To help me narrow down the cause, could you please provide the following details?  

• Have both organizations confirmed that they have successfully set up their Cross-Tenant Access Settings? 
• Are there any specific error messages you are encountering when trying to share files? 
• Have you tested sharing files with different external users to see if the problem persists across various accounts? 
• Can you confirm if the files in question have been checked in and are not subject to any additional restrictions? 

In the meantime, please try the following official troubleshooting options which usually resolve issues with basic issues: 

(Please note that if you are a user you will need to ask your global administrator to perform these steps) 

Option 1: Cross-Tenant Access Settings (Microsoft Entra ID) 

• Ensure both organizations have configured Inbound and Outbound B2B collaboration and B2B direct connect as you described. 
• Confirm Trust MFA and Trust compliant devices settings are enabled for added security. 

For more details, please refer to Microsoft’s official documentation: Collaborating with people outside your organization | Microsoft Learn 

 

Option 2: Enable shared channels in Teams 

In Teams Admin Center, under Teams policies, confirm:  

• Create shared channels = On 
• Invite external users to shared channels = On 
• Join external shared channels = On 

Reference: Manage channel policies in Microsoft Teams - Microsoft Teams | Microsoft Learn 

 

Option 3: SharePoint and OneDrive external sharing 

• In SharePoint Admin Center > Policies > Sharing, set:   SharePoint: New and existing guests (or more permissive)  OneDrive: New and existing guests (or more permissive) 
• Ensure OneDrive settings are not more restrictive than SharePoint. 
• If domain restrictions are enabled, add the partner domain to the allowed list. 

For more details, please refer to Microsoft’s official documentation: Manage sharing settings for SharePoint and OneDrive in Microsoft 365 - SharePoint in Microsoft 365 … 

 

Common limit 

• Site-level restrictions: Even if tenant-level sharing is enabled, individual SharePoint sites linked to Teams may have more restrictive settings. 
• Guest access disabled for Microsoft 365 Groups: Confirm this is enabled. 
• Blocked domains: Ensure the partner domain is not blocked. 

 

For more details, please refer to Microsoft’s official documentation: 

Collaborate with external participants in a shared channel (IT Admins) | Microsoft Learn 

Shared channels in Microsoft Teams - Microsoft Teams | Microsoft Learn 

 

Please review the SharePoint/OneDrive external sharing settings and confirm they match the required configuration. If these are already correct, check site-level policies and domain restrictions. Once these are aligned, Teams file sharing should work as expected. 

I truly hope you understand that the initial steps I suggested may not have completely resolved the issue, as there might still be underlying causes, we haven't uncovered yet. Please know that I’m here with you every step of the way, ready to work together and do everything I can to help troubleshoot and find the best solution. 

Please let me know if you have any further questions or if the problem persists after trying these solutions. Thank you for your patience and cooperation. 

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