Synchronized files use Windows 10 encryption locally but not on the OneDrive for work or school site

Problem

Consider the following scenario:

You use the following method in Windows 10 to encrypt the contents of a file or a folder:

1. Right-click the folder or file that you want to encrypt, and then select Properties.

2. Select the General tab, and then select Advanced.

3. Select the Encrypt contents to secure data check box, click OK, and then click OK again.

You use the sync app to synchronize the encrypted file or folder:

In this scenario, when you view the synchronized file or folder on your OneDrive for work or school site, Windows 10 encryption is not applied to the file or folder. However, the Windows 10 encryption is applied to the same file or folder on the local hard disk.

Solution

This is expected behavior. Windows 10 encryption occurs only on the local disk on which the file or folder was encrypted. When a file is moved from the local disk to the OneDrive for work or school site, the Windows 10 encryption from the client computer is no longer applied.

More information

The following additional information applies to files that are encrypted in Windows 10 and are uploaded to OneDrive for work or school or SharePoint in Microsoft 365: 

• Files and folders that are uploaded to the SharePoint in Microsoft 365 Document library are available to users through the usual SharePoint in Microsoft 365 permissions.

• A Windows 10 client won't encrypt the files or folders within the OneDrive for work or school library on the site.

• On the OneDrive for work or school site, when you create a file or a folder that's configured to synchronize by using the sync app (onedrive.exe), the item will synchronize to the local computer as a file or folder without encryption. For encryption to occur, you must move the file or folder from the encrypted synchronized folder (such as OneDrive – Contoso) to the desktop or another folder, and then move it back to the encrypted folder in Windows 10.

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