TEAMS - still showing as External even after completing the cross tenant collab.

Question

I have completed the cross tenant collaboration and added the other tenant to the org trust list. but still in TEAM they show up as external. what am i missing?

Answer 1

Dear @FEBAcct, 

Thank you for posting your question in the Microsoft Q&A forum.   

As a moderator, I don't have the tools to investigate your specific account directly because this is a user-to-user support forum. Moderators and contributors, including external Microsoft employees, cannot directly intervene in Microsoft product features or access back-end systems. Our role is limited to providing technical guidance on reported issues, requests, or ideas. However, I will try my best to guide you as clearly as possible.    

Based on my environment, seeing users as External in Microsoft Teams is expected behavior even after you’ve configured cross‑tenant collaboration. Cross‑tenant access settings in Microsoft Entra are designed to control and secure collaboration between separate tenants, not to merge identities or convert users from another tenant into internal members of your tenant. Even when inbound and outbound access is allowed, required applications are enabled, and trust is established at the organization level, each user still belongs to their home Entra tenant. Because of this, Microsoft Teams intentionally continues to display them as External to maintain clear tenant boundaries and security transparency. 

In all of these scenarios, the role shown in the channel (Member) reflects their permissions within that team or channel, while the External label simply reflects that their identity originates from another Entra tenant. 

I hope my explanation is clear. If you need any further assistance, please don't hesitate to reach out to me. Thank you very much! 

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Answer 2

In Microsoft Teams, the “External” label is expected behavior for users from another tenant, even after configuring cross-tenant collaboration and organizational trust.

Cross-tenant access settings in Microsoft Entra External ID control whether and how external users can access resources (inbound/outbound access, which apps they can use, and whether to trust their MFA/device claims), but they do not change those users into internal “members” of the tenant. They remain B2B or external users, so Teams continues to show them as “External.”

To ensure collaboration is correctly configured (even though the label will remain):

1. Verify cross-tenant access is set up for the partner tenant:
   • In Microsoft Entra admin center, go to External Identities → Cross-tenant access settings.
   • Under Organizational settings, confirm the other tenant is added and that inbound/outbound access is allowed for the needed users/groups and applications (for example, Office 365 for Teams and SharePoint).
2. If using shared channels (B2B direct connect):
   • For each partner tenant, configure Inbound and Outbound settings on the B2B direct connect tab and allow the Office 365 application so users can be invited to and use shared channels.
3. If using B2B collaboration (guests):
   • On the B2B collaboration tab for that organization, ensure inbound access is allowed for the required external users/groups and that the relevant applications are allowed.
4. If cross-cloud meetings are involved and users see sign-in/MFA issues (for example, AADSTS90072), adjust inbound trust settings to accept MFA/device claims from the partner tenant, or adjust Conditional Access policies as documented.

Even with all of this correctly configured, Teams will still visually mark users from another tenant as “External” because they are not members of the local tenant directory.

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References:

• Overview: Cross-tenant access with Microsoft Entra External ID
• Collaborate with external participants in a shared channel (IT Admins)
• Collaborating with people outside your organization
• Manage cross-tenant access settings for B2B collaboration
• Onboard trusted vendors to collaborate in Microsoft 365
• What is cross-tenant synchronization?
• Multitenant collaboration
• Meet with people in other Microsoft 365 cloud environments