Fix “Sharing failed: sharing to external users is not supported” Error in SharePoint Online

Problem:  When trying to share a file or folder with an external user, I got this error message: “Sharing failed: sharing to external users is not supported.”

Troubleshooting Checklist:

This error could happen for a variety of reasons:

1. Obviously, you must enable external sharing in SharePoint Online before adding external users! So, as a first step, make sure external sharing is enabled in your SharePoint Online Tenant and your SharePoint Online site collection. Here is my other post How to Enable External Sharing in SharePoint Online?
2. If your external sharing setting is either “Only people in your organization” or “Existing guests,” then you must add the external user (or invite guest users to Azure AD, in other words!)  to your Active Directory!

   

3. If your external sharing settings is “Allow sharing only with the external users that already exist in your organization’s directory” and under “Who can share outside your organization,” you have an AD Security group configured – Then you should be a member of that AD Group (“IT Team” in my case). It’s available under the classic admin center.