SharePoint Online: Create a Folder using PowerShell

Create Folder in SharePoint Online Document Library
Folders are used to organize files in SharePoint, similar to what we do in our computer. You can add a folder to SharePoint online list or library by following below steps.

How to Create a Folder in SharePoint Online?
Folders can be created in any list or library in SharePoint Online where the "New Folder" feature is turned ON. By default, folders are enabled in libraries and in lists they are disabled. Like folders in Windows Explorer, SharePoint Folders are used organize files into structure. To create a folder in SharePoint online, Follow these steps:

• Login to your SharePoint online site, Navigate to your document library in which you want to create a folder.
• On the ribbon, click on Files tab (Items tab, if it is a list, instead of library)
• Click New Folder
  
• In the Create A New Folder window, enter the folder name and click Save!
  

Now you can see your new folder in the Document Library. Please note, creating a folder is less preferred compared with adding a meta-data column to classify data in SharePoint!

How to Enable the "New Folder" option?
What if the New Folder option is grayed out? If the New Folder button isn't available, you can enable it.

• Navigate to the List or Library setting >> click Advanced settings.
• In the Folder section, Click "Yes" option to Make "New Folder" option available.
• Click OK to save your changes.

Now, you should get "New folder" in the SharePoint list

SharePoint Online: Create Folder using PowerShell CSOM: 
Lets create folder in SharePoint document library using PowerShell.

#Variables for Processing
$SiteUrl = "https://crescent.sharepoint.com/sites/marketing"
$ListURL="/sites/marketing/Shared Documents"
$FolderName="Reports"
$UserName="salaudeen@crescent.com"
$Password ="password goes here"
 
#Setup Credentials to connect
$Credentials = New-Object Microsoft.SharePoint.Client.SharePointOnlineCredentials($UserName,(ConvertTo-SecureString $Password -AsPlainText -Force))

Try { 
    #Set up the context
    $Context = New-Object Microsoft.SharePoint.Client.ClientContext($SiteUrl) 
    $Context.Credentials = $credentials
  
    #Get the List Root Folder
    $ParentFolder=$Context.web.GetFolderByServerRelativeUrl($ListURL)

    #sharepoint online powershell create folder
    $Folder = $ParentFolder.Folders.Add($FolderName)
    $ParentFolder.Context.ExecuteQuery()

    Write-host "New Folder Created Successfully!" -ForegroundColor Green
}
catch {
    write-host "Error: $($_.Exception.Message)" -foregroundcolor Red
} 

Create Sub-Folder at given path using PowerShell:
We can add a folder or sub-folder to any existing library or folder using PowerShell.

    #Set up the context
    $Context = New-Object Microsoft.SharePoint.Client.ClientContext($SiteUrl) 
    $Context.Credentials = $credentials

    #Create New Sub-Folder
    $Folder=$Context.Web.Folders.Add("Shared Documents/Reports/V2")
    $Context.ExecuteQuery()

    Write-host "Folder Created at: " $Folder.ServerRelativeUrl -ForegroundColor Green

SharePoint Online: PowerShell to create folder in document library
Lets wrap-it inside a function.

#Load SharePoint CSOM Assemblies
Add-Type -Path "C:\Program Files\Common Files\Microsoft Shared\Web Server Extensions\16\ISAPI\Microsoft.SharePoint.Client.dll"
Add-Type -Path "C:\Program Files\Common Files\Microsoft Shared\Web Server Extensions\16\ISAPI\Microsoft.SharePoint.Client.Runtime.dll"
 
Function Create-Folder()
{
    param(
        [Parameter(Mandatory=$true)][string]$SiteURL,
        [Parameter(Mandatory=$false)][System.Management.Automation.PSCredential] $Cred,
        [Parameter(Mandatory=$true)][string]$LibraryName,
        [Parameter(Mandatory=$true)][string]$FolderName
    )

    Try {
        $Credentials = New-Object Microsoft.SharePoint.Client.SharePointOnlineCredentials($Cred.Username, $Cred.Password)

        #Setup the context
        $Ctx = New-Object Microsoft.SharePoint.Client.ClientContext($SiteURL)
        $Ctx.Credentials = $Credentials

        #Get the Library by Name
        $List = $Ctx.Web.Lists.GetByTitle($LibraryName)

        #Check Folder Exists already
        $Folders = $List.RootFolder.Folders
        $Ctx.Load($Folders)
        $Ctx.ExecuteQuery()

        #Get existing folder names
        $FolderNames = $Folders | Select -ExpandProperty Name
        if($FolderNames -contains $FolderName)
        {
            write-host "Folder Exists Already!" -ForegroundColor Yellow
        }
        else
        {
            #sharepoint online create folder powershell
            $NewFolder = $List.RootFolder.Folders.Add($FolderName)
            $Ctx.ExecuteQuery()
            Write-host "Folder '$FolderName' Created Successfully!" -ForegroundColor Green
        }
    }
    Catch {
        write-host -f Red "Error Creating Folder!" $_.Exception.Message
    }
}

#Call the function to delete list view
Create-Folder -SiteURL "https://crescent.sharepoint.com" -Cred (Get-Credential) -LibraryName "Project Documents" -FolderName "Active"

Create Folder in SharePoint Online using PnP PowerShell
Here is the SharePoint Online PowerShell to create folder in document library

#Config Variables
$SiteURL = "https://crescenttech.sharepoint.com"
$FolderName= "Team Projects"
$RelativeURL= "/Shared Documents" #Relative URL of the Parent Folder

#Get Credentials to connect
$Cred = Get-Credential

Try {
    #Connect to PNP Online
    Connect-PnPOnline -Url $SiteURL -Credentials $Cred
    
    #sharepoint online create folder powershell
    Add-PnPFolder -Name $FolderName -Folder $RelativeURL -ErrorAction Stop
    Write-host -f Green "New Folder '$FolderName' Added!"
}
catch {
    write-host "Error: $($_.Exception.Message)" -foregroundcolor Red
}

What if the folder exists already?

#Set Parameters
$SiteURL = "https://crescent.sharepoint.com/sites/marketing"
$FolderURL = "Project Documents/2018"

#Connect to PNP Online
Connect-PnPOnline -Url $SiteURL -Credentials (Get-Credential)

#Create Folder if it doesn't exist
Resolve-PnPFolder -SiteRelativePath $FolderURL