Adding a new domain (company acquisition) to existing Office 365 Environment

Copper Contributor


Our company ( hybrid, 600 E3 users) acquired a company ( calling it X 200 user exchange 2010) my question is when is the right time to add the domain name to our office 365 environment.


we tried to add and confirm the ownership of domain with TXT it without changing MX records and we couldn`t sent out emails to anymore.


I really appreciate if someone can list the major steps.



13 Replies
It should be possible to add the domain but not altering the dns records for mail!

What are you trying to accomplish? Are you adding the users to your tenant, migrating mailboxes?


I’d make sure everything like users from x is set up with the @onmicrosoft domain and mailboxes migrated if that’s the case, then add the domain and change dns records!
Don’t add the exchange license to the users still having their mail on premises in exchange 2007!

When you add the domain, you need to make sure to configure it as Internal Relay in Exchange Online. Otherwise, for any address associated with that domain, Exchange Online will attempt internal delivery, and will fail if no matching account was found. When you set the domain as Internal relay, it will still check for internal matches, but if no such are found it will redirect the message to where the MX record points at currently.

@VasilMichev , is this required when you have set no exo licenses for those users ?

Thanks Adam, so if I understand correctly you are suggesting to :

1- have a trust set up between domains

2-sync the users in X domain to O365 using Adsync

3-Add the X domain to O365

4- migrate the mailboxes to O365 


will this prevent the issue that already happened?We were just trying to confirm the ownership of the in O365 and we weren't able to send emails out to anymore.


Thank you

Hi! If you’re just trying to accomplish the latter see @Vasils post!

Otherwise I suggest you find a third party migration tool, there’s a few great ones and do a migration! First before changing the domain and dns! That way the users work as usual and have their mailflow the same! You don’t necessarily need to migrate the users, but rather create the users in your tenant then match their accounts with their mailboxes!
It all depends on your exact scenario


Hi Vasil,

Thanks for your reply. I was reading this documentation for the type of connectors

could you please point me out to the right one? 

So although no DNS record was changed, just the TXT record added to domain ownership approval, and no service was enabled for the new domain it was an expected behavior? 




Vasil is right. Unless you add a send connector and set the domain to internal relay then if the existing users on 365 send mail to that domain it’s going to look internally within Office 365 and bounce.


1./ Add domain, txt and validate and add the Exchange service, do not change any other DNS records

The domain goes onto Exchange Online at this point. If you don’t do steps 2 and 3 you may start experiencing bounce backs if users send mail from the existing users to the newly added domain. This is expected behaviour.

2./ Go into Exchange Admin Console and in Accepted Domains change the newly added domain to internal relay domain

3./ In The Exchange Admin Console Add a outbound connector (from Office 365 to the existing mail platform) for the newly added domain pointing to the highest priority MX record on that domain.

That should work and ensure mail flows back to the new domain’s mail platform from Office 365 users.

You may want to do this change out of hours or notify the existing 365 users so they do not send mail between the domains at the time you make these changes.

Hope that helps

Best, Chris

@adam deltinger license is not a requirement generally speaking, as you can have valid Exchange recipients even without a license. But if a matching recipient exists, ExO will always try internal delivery first.


Connector might not be needed as well, depending on the configuration. And after all 200 users isn't that much, you can probably do the migration over a single weekend, and avoid dealing with complicated setups.

Hi Chris, I really appreciate your reply, in step 1 should I enable the Exchange services to proceed or I can leave it no configured.I am confused because we haven`t migrated any mailboxes from their end and haven`t decided if we going to do a cut-over or hybrid migration yet.




Yes, you should enable Exchange services to proceed otherwise the domain will never go onto Exchange Online and you will not be able to do steps 2 and 3.

If you are unsure about the migration route to take, I would advise not to proceed with adding the domain until you have a clear migration methodology. As Vasil said, it is only 200 users so this usually fits a cutover migration. You can check out the ways to migrate to Office 365 here

And follow this guidance.

Best, Chris
Yeah, for some readon I had a tenant to tenant migration in mind! In this cAse @Chris Hoard is right and ms tools will suffice! Just to not any confusion


Thank you, as on our company we are using hybrid exchange, which method of migration make sense?

is there any easy way to give the users access to ourdomain email address, before setting up a trust between 2 Ad`s first? 


Thank you so much!



Hi @Aysani

Without doing a discovery, it is difficult to say because as you know there are many factors involved in a migration such as number of sites, business objectives, third party applications etc. However, by definition and taking into account that the Exchange 2010 server is out of support soon, then the easiest is a cutover migration where all those users move at once and then decommission of the Exchange Server, The users would be cloud users on Office 365. In this scenario you can have either domain as the primary SMTP and the other as the alias.

Whether you consolidate their AD after, so you bring them into your Hybrid Setup - I think that depends where you want to get to and how best you think to manage your users. Personally, with things moving more into the Cloud I would personally cutover onto 365 and then manage them through Azure AD with a view to coming out of Hybrid and doing all the management in Azure AD for the whole organisation. However, that's a personal opinion where others may prefer remaining in hybrid.

Best, Chris