Power Query Problems

Fix Power Query Cannot Import Excel Files with Confidential Sensitivity Labels

Adam Davis Oct 1, 2026 869 views

Question details

The user is unable to import data into Power Query from an Excel workbook that is protected by a Confidential sensitivity label.

Fix Power Query Cannot Import Excel Files with Confidential Sensitivity Labels

Product: Microsoft Excel
Device & OS: not provided
Scenario: Attempting to import or connect to an Excel file labeled as Confidential using Power Query.
Observed behavior: Power Query reports corrupted data or fails to read the workbook because the sensitivity label applies encryption or rights management that blocks automated access.

Before you start

Verify with your Microsoft 365 administrator whether the Confidential sensitivity label applied to your Excel file includes file encryption, as Power Query cannot natively bypass Information Rights Management (IRM).

Solution 1Recommended

Use a Non-Encrypted Copy for Data Processing

Since Power Query cannot natively read encrypted Excel files, create a decrypted copy or a dummy dataset specifically for data modeling purposes.

Power Query currently does not support importing Excel files that are encrypted by sensitivity labels (other than Public or General). To build your queries, you must use a file structure that is not restricted by encryption.

Open the original file

Open the original Excel file that has the Confidential label applied interactively in Excel.

Save a testing copy

Save a copy of the file and replace any sensitive production data with dummy data.

Change sensitivity label

Change the sensitivity label of the new dummy file to 'Public' or 'General' to remove the encryption.

Connect with Power Query

Open Power Query and connect to this new, non-encrypted Excel file to build your transformations safely.

Use a Non-Encrypted Copy for Data Processing

Security Warning: Never remove protection or encryption from sensitive production files without explicit approval from your organization’s IT or security department.

Solution 2

Request a Label Policy Review from Your Administrator

Work with your Microsoft 365 admin to adjust label policies or provide alternative data access methods if Power Query automation is strictly required.

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Frequently Asked Questions

Why does Power Query report corrupted data on confidential files?

Power Query reports corrupted data because the Confidential sensitivity label applies Microsoft 365 Information Rights Management (IRM) encryption. Power Query cannot read the encrypted file structure, resulting in an error.

Can I grant Power Query permission to read encrypted Excel files?

Currently, Power Query does not fully support authenticating into individual rights-managed or encrypted Excel files directly during the data import process, even if your personal user account has the necessary permissions to open the file interactively.

Does changing the sensitivity label to General fix the import issue?

Yes, changing the label to Public or General usually removes the encryption, allowing Power Query to read the file normally. However, you should only do this if the file does not contain sensitive production data or if you have administrative approval.

Excel & Data Problems