How to Setup SMTP Relay in Office 365

Sending emails from a scanner or web application can always be challenging. You don’t want to use a mailbox (with username and password) for this, but preferable an SMTP server that sends the mail for you. This is where we can use SMTP Relay in Office 365.

The problem with SMTP Authentication these days is that we want to use MFA on all our Office 365 accounts. When we create a dedicated mailbox for sending emails, we still can’t authenticate (and secure) it properly. This is also the reason that Microsoft doesn’t support SMTH AUTH anymore for new tenants created after 2020.

SMTP Relay, on the other hand, allows applications and devices to send email through your Exchange Online mail server. Protection is done based on your public IP Address(es), allowing only applications and devices from your network to use the SMTP Relay connection.

In this article, I will explain how you can set up an SMTP Relay in Office 365 and the difference between Direct Send and SMTP Relay.

SMTP Relay vs Direct Send in Office 365

Before we take a look at how to set up SMTP Relay in Office 365, I first want to explain to you the difference between SMTP Relay and Direct Send. Because both use the MX endpoint as an SMTP server address, but they both have their own use case.

Direct Send in Office 365 is used to deliver email to only your internal mailboxes. This means that you can’t scan a document and email it directly from the scanner to an external email address. You will need to scan it to your own mailbox, and in Outlook forward it to the external contact.

But the advantage is Direct Send is that you can use it also for third-party applications and it doesn’t require a static IP address for authentication.

SMTP Relay on the other hand can be used to send emails directly to external contacts, but only from networks (public IP addresses) that you have defined.

FeaturesDirect SendSMTP Relay
Send to internal recipientsYesYes
Send to external recipients NoYes
Support externally hosted applicationsYesNo
Required Network Port2525
Requires authenticationNoneBased on Public
IP Address
Direct Send vs SMTP Relay

Set up SMTP Relay in Office 365

To set up an SMTP Relay we first need to know the public IP Address of the network where the device is located. If you want to use SMTP Relay for your local multifunctional (scanner), then just open the browser and visit myip.com. Note the IP Address, we will need that later.

  1. Open the Exchange Admin Center


    Log in add your Exchange Admin Center and navigate to:
    Mail flow > Connectors

    Mail flow connectors

  2. Create a new Connector


    Click on Add a connector to create a new connector
    and choose Your organization’s email server

    Create SMTP Relay in Office 365

  3. Connector name


    Give the connector a recognizable name and leave the selected options on.

    SMTP Relay setup

  4. Configure authentication


    The next step is to configure the authentication that we want to use. It’s possible to use a certificate for authentication, but more common is to do the verification based on the public IP Address of the device.

    You can define multiple IP Addresses for the connection (useful if you have different offices)

    configure smtp relay authentication

  5. Review and create the connector


    The last step is to review your settings and create the connector. Double-check the IP Addresses and click on Create connector.

    Office 365 Connectors

To use the connector we will need to look up the MX record for your Office 365 tenant. The value of the MX record is used as SMTP Server Address in your device.

  1. Open the Microsoft 365 Admin Center
  2. Expand Settings and click on Domains
  3. Select your domain
  4. Click on DNS records
  5. Open the MX record (by clicking on it)
  6. Note to Points to address or value field

The format of the value is pretty standard:

# MX Record structure
<your-domain>-<domain-extension>.mail.protection.outlook.com

# For example:
# lazyadmin-nl.mail.protection.outlook.com

Use this address in your scanner or application as SMTP Address.

Update your SPF Record

To prevent the mail from ending up in the spam folder, we will need to edit the SPF record. The SPF record identifies which endpoints (servers) are allowed to send emails on behalf of the domain.

By default your SPF Record looks like this:

v=spf1 include:spf.protection.outlook.com ~all

We are going to add our Public Ip Address to it:

v=spf1 ip4:10.11.12.13 include:spf.protection.outlook.com ~all

# or for mutliple IP Addresses:
v=spf1 ip4:10.11.12.13 ip4:20.21.22.23 include:spf.protection.outlook.com ~all

Keep in mind that DNS changes can take a couple of hours to apply. But after that, you should be able to send emails using your newly created SMTP Relay Connection.

Edit SMTP Relay Connection

You can use one SMTP Relay connection to send emails from multiple IP Addresses. So you don’t need to create a connection for each branch office that you have for example.

To add an IP Address to an existing connection, we can simply open an existing one:

  1. Click on the connection
  2. Click on Edit send email identity
  3. Add or remove IP Addresses from the connection
Edit Relay connector
Edit SMTP Relay connector

Using PowerShell to create SMTP Relay Connection

You can also use PowerShell to create an SMTP Relay connection in Office 365. This is especially useful when you need to create the same SMTP Relay connection in multiple tenants or if you just love to use PowerShell.

Make sure that you are connected to Exchange Online. You can read more about connecting to Exchange Online in this article.

There are a couple of parameters that we need to set:

ParameterDescription
NameThe name of the connector
ConnectorTypePartner: External partners or services.
OnPremises: Your on-premises email organization.
SenderDomainsUse * to allow all domains in your tenant
SenderIPAddressesYour public IP Address(es)
RestrictDomainsToIPAddresses Set to true to only allow connection from your sender IP addresses

You can find all parameters with their description in these Microsoft docs.

So to create the SMTP Relay connector in Office 365 with PowerShell we can use the following code:

New-InboundConnector -Name "SMTP Relay POSH" -ConnectorType = 'OnPremises' -SenderDomains * -SenderIPAddresses 10.11.12.13 -RestrictDomainsToIPAddresses $true

Or a bit more readable:

# Set the parameters
$parameters = @{
    Name = 'SMTP Relay POSH'
    ConnectorType = 'OnPremises'
    SenderDomains = '*'
    SenderIPAddresses = '10.11.12.13','20.21.22.23'
    RestrictDomainsToIPAddresses = $true

}

# Create the SMTP Relay connector
New-InboundConnector @parameters

Wrapping Up

Keep in mind that you can’t SMTP Relay or Direct send for bulk emails. Microsoft applies reasonable limits to the connection and throttling to protect Microsoft 365 services.

Make sure that you configure the SPF records correctly because this will prevent your emails from ending up in the spam folder.

I hope you were able to create your SMTP Relay connection in Office 365 with this guide. If you have any questions, just drop a comment below.

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17 thoughts on “How to Setup SMTP Relay in Office 365”

  1. Hello Rudy,

    I get the below error message when I use the new SMTP host address.

    The mail could not be sent to the recipients because of the mail server failure. (Sending Mail using Account 4 (2022-09-16T16:03:26). Exception Message: Could not connect to mail server. (A connection attempt failed because the connected party did not properly respond after a period of time, or established connection failed because connected host has failed to respond x.x.x.x:25).

    Any idea?
    I have TLS 1.2 enabled.

  2. Good article Rudy. The question I have is that neither of these seem to be optimal for an externally hosted cloud application wanting to send external SMTP on your organisations behalf (having looked at your Direct Send vs SMTP Relay table). Do you have a recommendation for that scenario? Case in point, a Legal Case Management System with externally hosted cloud components, which send SMTP messages to external address when your organisation is using Exchange Online.

    • I assume that you don’t have a dedicated public IP Address at the hosted cloud component? SMTP Relay could be an option, but you might want to protect it:

      What you could try is the following, create in Exchange Online a new rule under Mail flow. Make sure that you enable advanced options
      – Apply this rule if: Sender’s IP address is in this range – enter the IP of the cloud app
      – Do the following: Delete the message without notifying anyone ( might want to use another option first for testing)
      – Except if : The senders address include – enter the email address from your company that the cloud app uses.

      I haven’t tested it, but something like this might do the trick for you.

      • Thank you Rudy for the reply, that is very much appreciated. I will have to take a look into this. I have a sneaking suspicion that the 3rd party cycle a dynamic IP, but I will check.

        That logic is worth testing seeing as SMTP Relay is the only one that will allow for external sending from our tenant. The filter looks like it’s effectively locking down which email addresses can hit the relay (protecting it from abuse) whilst also allowing the EOL SMTP relay to send onto an external email. Certainly a starting point. I think our biggest challenge will be technical governance approval because we should be getting the 3rd party to use an OAuth method but they are technically limited in what their application can do.

        Thanks for getting back to me 🙂

  3. Hello,

    After adding the SMTP new address. How do we know which email it will use to send emails? Because there is no way to add the specific email address in the connector.

    Also, Does the new SMTP address acts as a username and password to send emails?

    • The relay address is used as SMTP server address. You can define any address in the From field, usernames and passwords are not needed because authentication is done based on the sender’s public IP Address.

  4. Hi Rudy,
    Will SMTP Relay still work after Microsoft phases out of basic authentication for Exchange Online from October 1st this year?
    According to the documentation SMTP AUTH will still be possible but it is not clear to if this also affects SMTP Relay. What is your information?

  5. I have this installed on 3 costumers but for some reason it does not work anymore
    Telnet did work before but even that does not work anymore

    telnet ”domain”-nl.mail.protection.outlook.com 25

      • no,
        One is my own @ my house (I have business premium license)
        2 customers completely different places in the country.
        The funny thing is telnet to 587 (smtp.office365.com) works fine, and telnet to smtp from the ISP to port 25 works just fine to, but not “telnet ”domain”-nl.mail.protection.outlook.com 25”

  6. I have a web app that i am trying to use smtp relay with. I have created the appropriate DNS records for the domain name and my app uses the correct MX record spec for sending mail. I have the cname specified as well. Along with a SPF record. I built a domain connector in exchange as well as an IP connector. I continue to receive this error when sending: 550 5.7.64 TenantAttribution; Relay Access Denied. Any help would be appreciated.

  7. We in the end migrated to Mailgun for all transactional SMTP/emails to leave those out of the Microsoft system completely. So far that has worked great for us.

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