Impact of Microsoft 365 group connection on external sharing

In SharePoint Online you can configure a site's external sharing to be set to one of the below configurations:

• Anyone: Users can share files and folders with links that don't require sign-in
• New and existing external users: External users must sign in or provide a verification code
• Existing external users: Only users already in your organization's directory
• Only people in current organization: No external sharing allowed

Once a site get's connected to a Microsoft 365 group then the Microsoft 365 group's external sharing settings play a role: by default external sharing of Microsoft 365 groups is enabled, which implies that you can for example use the Azure AD management UI and share the created group with an external. From a SharePoint perspective however the external sharing settings defined on the SharePoint site overrule the settings on the Microsoft 365 group.

Important

Cross check the external sharing settings of your site after group connecting the site as the settings are changed to defaults as part of the group connection process.