Problem
Consider the following scenario.
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You share a Microsoft SharePoint resource. In the Invite people dialog box, you specify a distribution list or a dynamic distribution list.
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An external user invite is sent to the group. One user accepts the invitation and can access the shared resource.
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When other users in the group try to access the shared resource, they receive one of the following messages:
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Access Denied
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You need permission to access this site.
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Let us know why you need access to this site.
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User is not found in the directory
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Solution
To resolve this issue, use one of the following methods, depending on your specific scenario:
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If you're using directory synchronization, share the resource with security groups and not with a distribution list.
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Use SharePoint groups. For more information, go to Customize SharePoint site permissions.
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Use Microsoft 365 groups. For more information, go to Learn about Office 365 Groups.
More Information
This issue occurs because distribution lists aren't supported methods for assigning SharePoint permissions. When you share with a distribution list, the first user who accepts the invitation receives access to the resource as an external user.
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