Problem:
For years, Microsoft allowed users to connect email clients to Outlook and Exchange Online using Basic Authentication, which relies on sending a username and password with every request. However, this method is now considered insecure because:
- Passwords can be intercepted or reused in phishing attacks.
- Basic Auth doesn’t support Multi-Factor Authentication (MFA), which is a critical security requirement.
- Attackers frequently abuse stolen credentials for brute-force and password-spray attacks.
Because of these risks, Microsoft has been phasing out Basic Authentication and now requires Modern Authentication (OAuth 2.0).
What Users Are Experiencing
Since Basic Auth was turned off:
- Older email clients suddenly stopped connecting to Outlook or Exchange Online.
- Users repeatedly see errors like “Username or password incorrect” even though details are right.
- Applications using SMTP, IMAP, or POP without OAuth fail to send or receive emails.
- Businesses relying on third-party CRMs or email tools find that automated email delivery is blocked.
This has created major disruption for organizations that haven’t yet updated their systems to support Modern Authentication.
Solution:
Here’s how you can resolve issues caused by the Basic Authentication deprecation and switch to Modern Authentication:
1. Use an Updated Email Client
- Microsoft requires clients to support OAuth 2.0.
- Outlook 2016, Outlook 2019, and Microsoft 365 Apps support Modern Auth by default.
- Older clients (e.g., Outlook 2010 or outdated mobile apps) will no longer work. Upgrade to a supported version.
2. Enable Modern Authentication for Microsoft 365
If you’re a tenant admin:
- Sign in to the Microsoft 365 Admin Center.
- Go to Settings → Org Settings → Modern Authentication.
- Ensure “Enable modern authentication” is turned ON.
- For Exchange Online and Skype/Teams, confirm Modern Auth is enabled via PowerShell if necessary.
3. Switch Third-Party Apps to OAuth
Many third-party clients (like Thunderbird, Apple Mail, and mobile apps) now support OAuth 2.0.
- In your client settings, look for Authentication method → OAuth2.
- Sign in using the Microsoft login window (this supports MFA and tokens instead of sending passwords directly).
4. Use App Passwords (Temporary Solution)
For applications that don’t yet support Modern Auth:
- Go to your Microsoft account’s Security → Advanced Security Options.
- Create an App Password and use it in place of your normal password in the app.
- Note: This is only available if MFA is enabled on your account.
5. Update Scripts and Integrations
If you use scripts or third-party tools to send emails (e.g., CRM, ERP, custom apps):
- Update them to use OAuth 2.0 authentication.
- Microsoft provides Graph API as the modern way to send email instead of legacy SMTP.
- Developers should register applications in Azure Active Directory and use OAuth tokens instead of hardcoding usernames/passwords.
6. For Business Admins
- Audit your environment for applications still using Basic Auth.
- Use the Azure AD Sign-in Logs to identify which apps and users are failing due to Basic Auth being disabled.
- Contact vendors of older applications to confirm if they support Modern Authentication or need updates.
- Consider transitioning to Microsoft-supported solutions like Outlook mobile/desktop apps or Microsoft Graph API for long-term reliability.
Final Thoughts
The “Modern Authentication required” error in Outlook and Microsoft 365 is not a bug—it’s a result of Microsoft officially retiring Basic Authentication to improve security. While this change may cause disruptions in older apps, it ultimately helps protect accounts from phishing and password attacks.
By upgrading your email client, enabling Modern Authentication in Microsoft 365, and moving to OAuth-based authentication methods, you can restore access and ensure your email remains secure. For organizations, this is also the perfect time to audit legacy systems and transition to modern, supported solutions.
