Groups in Microsoft 365: Which Group Type to Use and When

In this “Groups in Microsoft 365” article, we will learn about various groups in Microsoft 365 and their use cases and when to use which group. Here, we will discuss the Microsoft 365 Group, Distribution List, Mail Enabled Security, and Security Group.

When managing Microsoft 365 and SharePoint environments, it’s essential to understand the roles of each group type for effective collaboration, permissions, and security.

Groups in Microsoft 365: Which Group Type to Use and When

In the below section, I will explain the available various groups in Microsoft 365:

1. Microsoft 365 Group

Overview: Microsoft 365 Groups provide a collaborative workspace that includes shared resources like a mailbox, calendar, document library, OneNote notebook, and Planner. Members gain access to all resources within the group.

Use Case: Ideal for team collaboration where members need access to shared resources. Perfect for project teams or departments needing integrated tools and communication channels.

How to Create:

• Go to the Microsoft 365 Admin Center > Groups > Active groups > Add a group.
• Select Microsoft 365, then configure settings such as name, description, and owners.

2. Distribution List

Overview: Distribution Lists (or Distribution Groups) facilitate sending emails to a group of recipients via a single email address, simplifying mass communication. However, it lacks shared resources like document libraries or calendars.

Use Case: Best for large email communication or announcement needs where no collaboration is required. Suitable for announcements, newsletters, or updates to a specific audience.

How to Create:

• Navigate to Microsoft 365 Admin Center > Groups > Distribution lists > Add a group.
• Select Distribution as the group type, then customize group name, members, and permissions.

3. Mail-enabled Security Group

Overview: Mail-enabled Security Groups function as both security groups and distribution lists. They help manage permissions in Microsoft 365 and SharePoint, while also supporting email distribution.

Use Case: Recommended for scenarios where you need both role-based access to resources and the ability to send group emails. Ideal for scenarios like departmental access control paired with communication capabilities.

How to Create:

• In the Exchange Admin Center, go to Recipients > Groups > Add a group.
• Choose Mail-enabled security as the group type, then define the group’s name, description, and members. OR
• You can create it from the Microsoft 365 admin centre portal. You need to go to “Active Team & Groups,” then you need to click on the “Security Groups,” and from there select the “mail-enabled security” group.

4. Security Group

Overview: Security Groups provide permission management within SharePoint and Microsoft 365. They don’t support email distribution, focusing solely on access control for resources.

Use Case: Use Security Groups where strict access control is required without email needs. They are commonly used for controlling permissions on documents, sites, or other secure assets.

How to Create:

• Go to the Azure Active Directory Admin Center > Groups > New group.
• Choose Security as the group type, then specify group settings, members, and owners.

Choosing the Right Group Type

When deciding which group to use, assess both the collaboration needs and the security requirements:

• For full collaboration (email, shared documents, Planner): Use Microsoft 365 Groups.
• For email-only communications: Use Distribution Lists.
• For combined email and security: Use Mail-enabled Security Groups.
• For strict access control without email: Use Security Groups.

Each type has unique benefits, so choosing the right one helps ensure streamlined workflows and effective resource management in your Microsoft 365 environment.

For your ease, I have compared the above group types and their use cases in the tabular format. Here’s a table comparing the Microsoft 365 Groups, Distribution Lists, Mail-enabled Security Groups, and Security Groups for easy reference:

This table format highlights the purpose, use case, features, and creation steps for each group type in Microsoft 365.

Use Case Example: Groups in Microsoft 365

Let’s say my requirement is to send the email to the group and assign that group SharePoint permission. You have asked your AD team to create the group, and that group has been synchronised to your SharePoint online (Office 365), and we can see that group under active group from the Office 365 admin page, but while we try to access and assign that group in SharePoint permission, it will not be accessible or will not be found.

Let me explain why we need this – security groups in Microsoft 365 (Microsoft 365 group vs Distribution list)

There are four types of groups in office 365. Please see the below screenshot where each type of group description is explained.  

Come to your Group dashboard from office 365 admin center – as an example, we can see the “Test Distribution list” group is displayed over here. Here this is a type of “Distribution lists” group. 

Now let’s go to the SharePoint document library permission page and try to search the “Test Distribution list”, SharePoint cannot find this group – this will give an error message as “We couldn’t find an exact match.”. Please see the below screenshot.  

Go to the office 365 group dashboard from the admin center again and find the “Test Mail-Enabled Security Group” as an example which is the type of “mail-enabled security” group 

Now again let’s go to the SharePoint document library permission page and try to search the “Test Mail-Enabled Security Group”, now we can see that SharePoint is able to find this group(please see the below screenshot).   

Note:

• The above screenshots were taken from the old  group creation screen in Office 365; now the name has been changed to Microsoft 365 from Office 365 with the new screen and design, but the core concept of these groups is still the same.

Create Group in Microsoft 365 using the new portal

With the new interface, group creation navigation is changed. Now, to create a new group, you need to login to the Microsoft 365 admin centre portal using your administrator account. Then, from the left side panel, click on “Active Teams & Groups.” Then, you will get the option to select “Teams & Microsoft 365 Groups,” the distribution list, and the security group. Under security groups, you will have the security and mail-enabled security group option to create.

Summary: Security groups in Microsoft 365 (Office 365 group vs distribution list)

Thus, in this article, we have learnt about various groups in Microsoft 365 and with their use case when to create which group, and we have also learnt how to create a new group in Microsoft 365 step by step.

This articles provides a detailed overview of Microsoft 365 Groups, Distribution Lists, Mail-enabled Security Groups, and Security Groups, explaining each type’s role, best use cases, features, and creation steps in Microsoft 365. It helps users decide the right group type for effective collaboration, access control, or communication needs within SharePoint and Microsoft 365 environments. With an SEO focus, this article answers common questions like “when to use Microsoft 365 Groups vs. Security Groups” and “how to set up Distribution Lists and Mail-enabled Security Groups.”

1. If we want group email and that group should be added to SharePoint permission as well then we need to go with the “mail-enabled security” group. 
2. In the above example, SharePoint was not able to find the “Test Distribution list” group because it was a type of “Distribution lists” group. 
3. Whether we create the group in local AD or in office 365, the above rules are the same.  

See Also: SharePoint Online Tutorial

You may also like the below SharePoint Online articles:

• Office 365: Getting started with SharePoint PnP PowerShell – installation
• In 2 steps convert a classic SharePoint page to modern using PnP
• Office 365: Retrieve hub sites and associated sites using PnP Powershell
• Create a modern team site using PnP PowerShell in SharePoint
• In 4 steps access SharePoint online data using postman tool
• SharePoint admin center: Learn SharePoint online administration in an hour – step by step
• SharePoint REST API: GET vs POST vs PUT vs DELETE vs PATCH
• Office 365: Understanding the hub site in SharePoint online
• Compare groups in Microsoft 365

About Post Author

Microsoft Techy

As a SharePoint and Power Platform Maven, my greatest joy comes from sharing my expertise with colleagues, friends, and the tech community, helping them navigate the ever-evolving world of technology and guiding them through the dynamic landscape of modern technology.

See author's posts