Outlook - Error 500

Question

Dear Team,

I have recently made a new account with Microsoft for my business (on the 15th of May).

This would be the paid exchange plan 1, as I wanted to check it out first.

However, I have not been able to get access to my Outlook (email), and when I do, I get the "error 500" message.

I have contacted several IT representatives from Microsoft, and they have escalated the issue, but no reply or solution yet.

Any changes that I have made or steps taken as instructed by IT engineers & representatives.

1. Created dummy accounts (to see if the license works there or not, but no result)
2. Connected & reconnected my Microsoft account with Go-daddy to make sure the domain works. (Did troubleshoot and everything is perfect on that side).
3. Removed cache & deleted past history. (no result)
4. Changed browsers, devices and OS (Tried on both Edge & Chrome, phone application & desktop app, and on incognito, also tried on Mac & Windows computer).
5. Have unticked & ticked the license option.
6. Have waited from past couple of days for it to reload or refresh.

When I log into admin.microsoft.com - under active users - mail. I still get the following message "We are preparing a mailbox for the user."

What else can I do to ensure that it works?

With regards,

[Moderator note: personal info removed]

Answer 1

Please note that our forum is a public platform, and we will modify your question to hide your personal information in the description. Kindly ensure that you hide any personal or organizational information the next time you post an error or other details to protect personal data.

Kindly note that we're not Microsoft support, this is a user-to-user support forum. Moderators have no backend access and cannot directly intervene in Microsoft products. We provide only technical guidance and best-practice recommendations based on reported issues.

Hi @Parth Pandya

Thanks for your details, in order to assist you better, could you please provide the additional information via private message:

• Full error message of 500 error, since this error code can be different due to the error message.
• Your support ticket number.

Additionally, I tried to reproduce your case but the message "We are preparing a mailbox for the user." only stays for 15 minutes. Then it will update the mailbox statistic.

Another place you can check is in Exchange Admin Center (EAC).

In EAC > Recipients > Mailboxes > check if the mailbox shows up there. If not, that means the mailbox is not yet created.

I look forward for your reply.

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Answer 2

Based on the symptoms and the context, the mailbox for this new Exchange Online user is not yet fully provisioned, which is why Outlook on the web shows HTTP 500 errors and the admin center still displays “We are preparing a mailbox for the user.”

Actions that can be taken and verified:

1. Verify the Exchange Online license assignment
   • In the Microsoft 365 admin center, open the affected user under Active users.
   • Confirm that an Exchange Online (Exchange Plan 1) license is actually assigned.
   • If it is not, assign the Exchange Online license, save, then have the user sign out and sign back in.
2. Confirm there is no on‑premises mailbox
   • If there is any hybrid/on‑premises Exchange environment, ensure the user does not already have an on‑premises mailbox. If they do, an Exchange Online mailbox will not be created and Outlook/OWA will not work for that user.
3. Allow for provisioning time and re‑sign in
   • For a new tenant and new users, Microsoft notes:
     • It can take up to 24 hours for the Exchange Online organization itself to finish initial setup.
     • It can take up to 15 minutes for a new user’s mailbox to be created after the license is assigned.
   • After confirming the license is assigned, have the user sign out of the Microsoft 365 portal and sign back in. This is required for the new mailbox/links to become active.
4. Check if this is a tenant‑wide setup delay
   • If the tenant was created recently (as in this case) and all users with Exchange Online licenses still show “We are preparing a mailbox for the user” and cannot access Outlook after more than 24 hours, this indicates that the Exchange Online organization setup is not completing correctly.
   • In this situation, Microsoft’s guidance is to contact Office 365/Exchange Online support and have them check and complete the organization/mailbox provisioning on the backend.
5. When to escalate again
   • Since support cases are already open and the issue persists beyond the documented provisioning windows (15 minutes for a mailbox, 24 hours for organization setup), the next step is:
     • Provide support with evidence that:
       • The Exchange Online license is assigned.
       • The admin portal continues to show “We are preparing a mailbox for the user.”
       • Outlook/OWA returns HTTP 500 / TenantAccessBlocked or similar startup errors.
     • Ask support to verify whether the mailbox object is disabled or the tenant/Exchange organization is blocked or stuck in provisioning, and to re‑enable or complete provisioning as needed.

Until Microsoft 365 completes the mailbox provisioning on the service side, no client‑side changes (browsers, cache, devices, apps) will resolve the issue.

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References:

• The Outlook, Calendar, or People links are unavailable in the Office 365 portal for a new user
• Issues sending and receiving email
• Fix Outlook account problems in Office 365 for business
• Outlook closes shortly after it is opened
• Exchange ActiveSync Returned an HTTP 500 Error