MFA Security Issues

Fix Microsoft 365 App Password Missing for SMTP AUTH and MFA

Bushra Parveen Sep 28, 2026 869 views

Question details

Users with MFA enabled and Global Administrator privileges are unable to find the option to create an app password for SMTP AUTH in Microsoft 365.

Fix Microsoft 365 App Password Missing for SMTP AUTH and MFA

Product: Microsoft 365
Device & OS: not provided
Scenario: Attempting to generate an app password to configure SMTP AUTH after enabling Multi-Factor Authentication (MFA).
Observed behavior: The app password creation option is missing from the Microsoft 365 security settings interface.

Before you start

Ensure you have Global Administrator privileges to your Microsoft 365 tenant, as resolving this issue requires checking tenant-wide authentication policies.

Solution 1Recommended

Verify Tenant Authentication Policies and Use OAuth

Ensure app passwords are allowed in your organization's settings and transition to OAuth where possible.

Often, the app password option is hidden because the tenant's global security defaults or conditional access policies block legacy authentication methods like SMTP AUTH.

Check SMTP AUTH

Navigate to the Microsoft 365 Admin Center, go to Active users, select the user, and ensure 'Authenticated SMTP' is checked under the Mail tab.

Verify MFA settings

Go to the Multi-Factor Authentication settings portal and ensure that the option to allow users to create app passwords is enabled.

Check Security Defaults

In the Azure Active Directory portal, review your Security Defaults or Conditional Access policies to ensure legacy authentication is not blocked.

Switch to OAuth

Whenever supported by your application or email client, configure OAuth-based authentication instead of using basic SMTP AUTH with an app password.

Verify Tenant Authentication Policies and Use OAuth

OAuth Recommendation: Microsoft strongly recommends migrating to OAuth-based authentication, as basic authentication with app passwords is being progressively deprecated for better security.

Solution 2

Contact Microsoft Support for Server-Side Issues

If tenant settings are correct but the option remains hidden, the issue requires intervention from Microsoft Support.

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Frequently Asked Questions

Why is the app password option missing even though MFA is enabled?

The option is often hidden due to tenant configurations, security defaults blocking legacy authentication, or occasionally a server-side glitch in the Microsoft 365 web interface.

Does SMTP AUTH strictly require an app password?

Yes, if your account has MFA enabled and your email client does not support modern OAuth authentication, you must use an app password to bypass the MFA prompt.

Can a regular user fix the missing app password issue?

No, resolving this typically requires a Global Administrator to adjust tenant-level authentication policies or to open a service request with Microsoft Support for backend issues.

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