Shared mailbox vs distribution list vs Microsoft 365 group: which one you need

Somebody asks for a support@ address. Whoever has admin access makes one, using whichever of the three options they clicked first. Two years later nobody can find an old thread, replies are going out from the wrong name, and half the team never sees the mail at all.

Shared mailbox vs distribution list vs Microsoft 365 group is a five-minute decision that is expensive to reverse. This is how to get it right the first time, and what to do if you already got it wrong.

The short version

Shared mailbox — mail lands in one central inbox that several people open and work out of. Replies go out as the address, not as the person. There is a shared calendar. Use it for info@, support@, billing@, reception.

Distribution list — mail arrives, gets copied to every member’s own inbox, and that is the whole feature. There is no shared history and no shared workspace. Use it for announcements: everyone@, warehouse@, nj-office@.

Microsoft 365 group — a shared inbox plus a shared workspace: files, calendar, Planner, and a Teams team if you connect one. Use it when a standing team needs to collaborate, not just receive mail.

If you are choosing for a queue that customers write into, it is almost always a shared mailbox.

Shared mailboxes: the rules that bite

Per Microsoft’s documentation, a shared mailbox holds up to 50 GB without any license assigned to it. That is the reason to like them. It is also the source of the most common failure we get called about.

When a shared mailbox hits the storage limit, it keeps receiving for a while, then stops sending, then stops receiving and starts bouncing mail back to senders. Nobody notices until a customer calls to say their email bounced. If you want a shared mailbox over 50 GB, it needs an Exchange Online Plan 2 license, which raises the limit to 100 GB.

The rest of the limits worth knowing:

• A shared mailbox supports a maximum of 25 users. Past that, Microsoft says to use a Microsoft 365 group instead. More people than that hitting it at once causes connection failures and duplicated messages.
• Nobody signs in to it. The account behind a shared mailbox has a system-generated password that is not meant to be used. Microsoft’s instruction is direct: always block sign-in for that account and keep it blocked. Anyone using it opens it as a delegate from their own licensed mailbox.
• You cannot stop members deleting mail. There is no permission that prevents it. If you need mail preserved against a careless delete, that is a retention policy, not a mailbox setting.
• Sent mail cannot be encrypted. A shared mailbox has no security context of its own, so it cannot be assigned an encryption key. If your bookkeeper needs to send encrypted attachments, do not run that from a shared mailbox.
• Litigation hold needs a license. Exchange Online Plan 2, or Plan 1 with the Exchange Online Archiving add-on. Relevant if you are a law firm or you are on a hold.
• Access requires a licensed mailbox. Everyone opening it still needs their own Exchange Online mailbox. There is no way to give a Gmail contractor access to your shared mailbox.

One quirk that explains a lot of confusion: unlicensed shared mailboxes created before July 2018 are 100 GB. If yours is old and roomier than the docs say, that is why. A new one will not be.

Distribution lists: the thing they are not

A distribution list broadcasts. Mail sent to it gets delivered to each member’s inbox, where each copy lives its own life. There is no central record of what came in and no way to see who answered.

That is fine for all-staff@. It is bad for anything a customer writes to, because two people will answer the same message from their personal address and neither will know the other did.

Distribution lists can receive external mail if an admin enables it. Watch that setting: a list that accepts external mail and contains everyone in the company is a nice tool for a spammer.

There is a variant worth knowing. A dynamic distribution list works out its membership at the moment each message is sent, based on filters like department or office. If your nj-office@ list is perpetually out of date because nobody updates it when people move, a dynamic list fixes that permanently.

And a mail-enabled security group does two jobs at once: it grants access to resources like SharePoint sites and it can be emailed. Convenient, and a common source of surprise when a permissions group turns out to also be an email address.

Microsoft 365 groups: more than you usually need

A Microsoft 365 group gives members a group email address plus a shared workspace: conversations, files, a calendar, and Planner. It can be connected to Teams, which uses Microsoft 365 groups for team membership. Guests from outside the company can be added if an admin has allowed it, and members can send as the group address with permission.

This is the right answer for a project team or a department that needs to work together. It is overkill for a support queue, and it sends people into Outlook groups or Teams to find mail that they expected in an inbox.

One thing to know before you commit either way: you cannot migrate a shared mailbox into a Microsoft 365 group. If you start with a shared mailbox and later want a group, that is a rebuild, not a conversion.

Fixing one you already got wrong

The most common repair is the easy direction. A user mailbox can be converted to a shared mailbox. That is the right move when somebody leaves and their mail still needs to be reachable: convert it, remove the license, block sign-in on the account. It is also a real line item, since freeing a Business Standard license is money back every month. We covered that math in what the 2026 Microsoft 365 price increase actually costs you.

Going from a distribution list to a shared mailbox is harder, because history is scattered across everyone’s inboxes and cannot be pulled back into one place. You keep the address, point it at a new shared mailbox, and accept that the archive stays where it is.

Going from anything to a Microsoft 365 group is a rebuild.

When to call somebody

Do it yourself if you are picking for one address and you now know which of the three you want.

Call somebody when a shared mailbox is bouncing mail and you need it fixed today, when you are consolidating a decade of ad-hoc addresses during a Microsoft 365 migration, when a compliance obligation means the mail has to be preserved and provably searchable, or when more than 25 people need the same queue and the answer is actually a ticketing system rather than any of these three. That last one comes up more than you would expect, and we set it up as part of managed IT.

If your Microsoft 365 tenant has accumulated shared mailboxes, lists and groups that nobody can explain, get in touch and we will map what you have and what it should be.

Limits and licensing rules in this article were verified against Microsoft’s own Microsoft 365 admin documentation in August 2026.