Microsoft 365 Error Codes

How to Fix Microsoft 365 Error 550 5.7.520 (External Forwarding Not Allowed)

Maira Mehtab Sep 20, 2026 869 views

Question details

Users receive a non-delivery report (NDR) with SMTP error 550 5.7.520 when attempting to automatically forward emails to external addresses from a Microsoft 365 Business Basic mailbox.

Product: Microsoft 365
Device & OS: not provided
Scenario: Setting up or using automatic email forwarding to external addresses (such as Gmail).
Observed behavior: Senders receive a bounce-back message with SMTP error code 550 5.7.520, stating that the organization does not allow external forwarding.

Before you start

You must have administrator privileges in Microsoft 365 to modify threat policies and enable external forwarding for your organization.

Solution 1Recommended

Enable External Forwarding in Microsoft 365 Defender Portal

Update the anti-spam outbound policy to permit automatic external email forwarding.

By default, Microsoft 365 disables automatic external email forwarding to protect against data exfiltration. To resolve error 550 5.7.520, an administrator must manually override this restriction in the anti-spam settings.

Sign in to Security Center

Navigate to Threat Policies

Go to Email & collaboration on the left menu, select Policies & rules, and then click on Threat policies.

Access Anti-Spam Policies

Under the Policies section, click on Anti-spam to view the list of spam management policies.

Edit Outbound Policy

Select the Anti-spam outbound policy (Default), and click the 'Edit protection settings' link at the bottom of the flyout pane.

Enable Forwarding

Under Automatic forwarding rules, click the dropdown menu, select 'On – Forwarding is enabled', and then click Save to apply the changes.

Security Warning: Enabling external forwarding organization-wide can pose security risks. Consider creating a custom anti-spam policy applied only to specific users who explicitly require this feature.

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Frequently Asked Questions

Why does Microsoft 365 block external forwarding by default?

Microsoft disables automatic external email forwarding by default to prevent potential data leakage and protect organizations from scenarios where compromised accounts automatically exfiltrate sensitive company emails.

How long does it take for the outbound spam policy change to take effect?

Policy changes in the Microsoft 365 Defender portal can take anywhere from a few minutes up to an hour to fully propagate across the Exchange Online environment.

Can I allow external forwarding for only one specific user?

Yes. Instead of modifying the default outbound policy for the entire organization, you can create a custom outbound spam policy, set the forwarding rule to 'On', and assign it exclusively to the specific user's mailbox.

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