Retirement of SharePoint One-Time Passcode (SPO OTP) and transition to Microsoft Entra B2B guest accounts

SharePoint One-Time Passcode (SPO OTP) authentication will retire by August 2026, transitioning external sharing and authentication in OneDrive and SharePoint to Microsoft Entra B2B guest accounts. This change enhances security, governance, and conditional access, requiring guest accounts for external user access after July 2026. We are retiring SharePoint One‑Time Passcode (SPO OTP) authentication in OneDrive and SharePoint starting July 2026. Beginning in May 2026, new external sharing invitations and authentication will start using Microsoft Entra B2B instead of SPO OTP. This transition simplifies external collaboration, aligns authentication with Microsoft identity standards, and enables consistent guest lifecycle management, governance, and Conditional Access coverage across Microsoft 365. When this will happen May 2026: Invitation and authentication for new external sharing begins transitioning to Microsoft Entra B2B. Users who previously authenticated via SPO OTP will continue to have access to specific people links even without a B2B guest account yet. July 2026: Retirement of SPO OTP authentication begins. External users without a guest account get access denied on previously shared specific people links. To restore access, a guest account must be created in Entra B2B, or an allowed user must share/re-share at least one file/folder/site. Retirement is expected to complete by August 31, 2026. How this affects your organization Who is affected All Microsoft 365 tenants (commercial, government, sovereign). All external users who access OneDrive or SharePoint files, folders, or sites. What will happen The EnableAzureB2BIntegration setting will no longer control external sharing behavior beginning May 2026. SPO OTP authentication will retire beginning July 2026. The option to disable Entra B2B integration will be removed. Impact on external users External users who already have an Entra B2B guest account in your directory: No change in behavior. External users without a B2B guest account: Specific people links shared after changes rolled out to your tenant: A guest account will be automatically created via the Entra B2B Invitation Manager. Authentication will use Entra B2B (email OTP available if enabled). Specific people links shared before changes rolled out to your tenant: SPO OTP authentication continues until July 2026. After July 2026, these users will receive access […]

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