What it does
A channel that can be shared with people and whole teams outside its parent team, including people in other Microsoft 365 organisations. External people join with their own home-tenant identity through Microsoft Entra B2B direct connect, so they never switch tenants and never get a guest account in yours.
Key facts
- Up to 1,000 shared channels per team. A shared channel holds up to 5,000 direct members, and can be shared with up to 50 teams.
- Only team owners can create shared channels. The org-level switches are three settings in Teams policies: Create shared channels, Invite external users to shared channels and Join external shared channels (
AllowSharedChannelCreation,AllowChannelSharingToExternalUser,AllowUserToParticipateInExternalSharedChannelonSet-CsTeamsChannelsPolicy). - B2B direct connect is off by default. Both organisations have to configure Microsoft Entra cross-tenant access settings — inbound and outbound, allowing users and groups and the Office 365 application — for each other. It's a two-way relationship; one side enabling it does nothing.
- Cross-tenant access changes can take up to six hours to take effect.
- The partner organisation must not be blocked in Teams external access. Microsoft's setup guidance also expects guest sharing to be enabled for Microsoft 365 Groups and SharePoint at org and site level.
- People with Entra guest accounts can't be added to shared channels — external participants come in via B2B direct connect only. When adding them in the Teams admin center, search
ext:[email protected]to get the external account rather than a guest. Add them by UPN if UPN and email differ. - Each shared channel has its own SharePoint site (template
TEAMCHANNEL#1) that inherits the parent team's sensitivity label. If deleted outside Teams it's restored within four hours while the channel is active. - Files in the channel can be shared with org members and external channel participants only, not with other external users.
- Shared channels between Commercial and GCC clouds aren't supported.
- Only the tab capability of allowlisted apps works by default in shared channels; full app support depends on the app developer.
- Deleted shared channels can be restored within 30 days. When the last owner leaves, a member from your organisation is promoted to owner.
When to use / skip
Use shared channels for ongoing, focused collaboration with a partner organisation that's also on Microsoft 365 and willing to do its half of the trust configuration — a joint programme, a managed service relationship, a supplier you deal with every day. The user experience is genuinely better than guest access: no tenant switching, the channel appears in their own Teams list, and their own identity and MFA apply. They're also good internally for pulling several teams into one conversation without merging the teams.
Skip it when the partner won't or can't configure B2B direct connect — which is more often than you'd hope, because their security team has to approve your tenant. Skip it for one-off or short engagements where the trust setup outlives the work, and for anyone without a Microsoft Entra work account. For those, guest access in a dedicated team is still the pragmatic answer. If people just need to chat, external access 1:1 and group chats may be all they need.
Configuration decisions
- Which organisations get a B2B direct connect trust — allowlist specific tenants rather than opening to all, unless the client really is a hub for many partners.
- Whether to trust partner MFA claims in inbound cross-tenant settings, so external participants aren't double-prompted.
- Which users can create shared channels, invite externals, and join other organisations' channels — three separate decisions, often with different answers.
- Whether to scope outbound B2B direct connect to a group rather than all users.
- Sensitivity labelling on the parent team, since the shared channel site inherits it.
- Who in the client owns partner trust requests, because each new partner is a change in Entra, not just in Teams.
Gotchas
- The person asking for the shared channel almost never owns Entra cross-tenant access. Put the request route in place before launch or every shared channel request turns into a ticket chase.
- "We set it up and it doesn't work" is usually the other tenant. Both sides need inbound and outbound configured; ask for screenshots of their side early.
- Up to six hours of propagation makes testing painful. Configure the day before you demo.
- Guests already in the team can't be added to its shared channel. People expect that to just work.
- Tabs for apps outside the allowlist won't appear, and bots/message extensions may not work for external participants.
- Retention, eDiscovery and DLP for content that external participants post sit with the host tenant. The partner's compliance team will ask about it — have the answer ready.
Consultant notes
- Run a short partner onboarding checklist covering both tenants' Entra settings, the three Teams policy switches and external access. It saves days.
- Pilot with one friendly partner tenant before announcing the capability.
- Document who can approve a new partner trust and how long it takes. Business users will judge the feature on that turnaround.
- Keep the external vs guest access settings decision with the admin and governance workstream — this doc only covers the channel experience.
- Use shared channels internally as well; sharing a channel with several teams often removes the urge to create "everyone from X and Y" teams.
Revisit when the GCC/commercial shared channel restriction changes, or when Microsoft widens default app support in shared channels