Cannot Share CoPilot Agent. Error: "Your organization has prevented this agent from being installed"

Question

I have a very locked down environment but configured for peer to peer agent sharing. When I share an agent and the user clicks on the sharing link they get this message that its being prevented by the organisation from being installed.

Agent is built with Agent builder and shared using the "Share" button in the agent

M365 Admin Centre > Agent Settings are as below.

User access - Specific Users and Groups (My target user is part of the Group)

Allowed Agent Types - None Selected (The setting description says, "Manage what types of agents users can see in their store"; I don't agents discovered via the store but by a sharing link)

Agent Sharing Policy - No users (Again, the setting description says, "Users who are restricted from sharing with anyone can still share their agents with individual users and security groups". So, can't share with "Everyone" but can share with "individual users and groups" - that's exactly what I'm after.

I have verified that the agent is not blocked and have confirmed with the owner that its not submitted for approval on the store. I have even submitted another agent to the catalogue and approved it to test that scenario - but I have the same error with that as well. To add a bit more context, I have shared agents that are built in the CoPilot studio via links and they work for the same user who sees this error.

Why would I still be having this error?

Answer 1

The most likely cause is the Allowed agent types setting.

For Agent Builder agents, users can install agents that are available in the Agent Store based on tenant admin policies, and admins can govern those agents in the Microsoft 365 admin center. The Allowed agent types setting controls which types of agents users can view and install from the agent catalog. One of those options is Allow apps and agents built by your organization, which enables users to install custom agents developed within the tenant.

With Allowed agent types = None selected, custom agents built in the tenant are effectively not installable for users. That matches the error shown when the recipient opens the shared link: the agent is shared, but installation is blocked by org policy.

The Sharing = No users setting does not block the scenario described. That setting disables org-level broad sharing, but users can still share directly with specific individuals. So the sharing action itself can succeed while installation still fails because install/governance policy blocks the agent type.

Why Copilot Studio agents can still work for the same user:

• The sharing control in the Microsoft 365 admin center explicitly says it applies only to agents built with Microsoft Copilot Agent Builder.
• Copilot Studio publishing and sharing follow a different path.

Recommended checks:

1. In Microsoft 365 admin center > Agents > Agent settings, enable Allow apps and agents built by your organization under Allowed agent types.
2. Keep User access scoped to the specific users/groups as needed.
3. Keep Sharing as No users if only direct person/group sharing is desired; that setting still allows direct sharing to individuals.
4. Retest with the same shared link.

If the agent is intended to be discoverable more broadly, org-wide sharing can make it visible in the Agent Store, but that is separate from the install block caused by agent-type policy.

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References:

• Agent settings in Microsoft 365 admin center
• Agent installation in Microsoft Copilot
• Share and manage agents