This issue occurs in the following scenario:

  • Outlook 2016 connects to both an on-premises Exchange Server and Modern-Authentication-enabled Exchange Online.

  • You set the AlwaysUseMSOAuthForWebServices registry key.

To fix this issue, install April 5, 2016, update for Outlook 2016 (KB3114972), and then follow these steps.Important Follow the steps in this section carefully. Serious problems might occur if you modify the registry incorrectly. Before you modify it, back up the registry for restoration in case problems occur.

  1. Exit all Microsoft Office applications.

  2. Start Registry Editor:

    • In Windows 10, go to Start, enter regedit in the Search box, and then select regedit.exe in the search results.

    • In Windows 8 or Windows 8.1, move your mouse to the upper-right corner, select Search, enter regedit in the search text box, and then select regedit.exe in the search results.

    • In Windows 7 or Windows Vista, select Start, enter regedit in the Start Search box, and then select regedit.exe in the search results.

  3. Locate and then select the following registry subkey:

    HKEY_CURRENT_USER\SOFTWARE\Microsoft\Exchange

  4. On the Edit menu, point to New, and then select DWORD Value.

  5. Enter AlwaysUseMSOAuthForAutodiscover, and then press Enter.

  6. In the Details pane, press and hold (or right-click) AlwaysUseMSOAuthForAutodiscover, and then select Modify.

  7. In the Value data box, enter 1, and then select OK.

  8. Delete the AlwaysUseMSOAuthForWebServices DWORD value (if it exists).

  9. Exit Registry Editor.

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