How Microsft 365 Groups Work and The Different Types of Groups

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  • Post last modified:September 10, 2023
  • Reading time:4 mins read

Microsoft 365 groups are logical containers of users that allow you to apply permissions and policies in bulk. You do not have to worry about manually assigning permissions to all of the resources within the group as by adding members to the group, they automatically inherit the permissions already assigned to the group. 

There are 4 different types of groups in the Microsoft 365 admin portal and in this post, we are going to walk through creating and understanding Microsoft 365 groups. 

If you have not already seen our last post on creating a new user in the Microsoft 365 admin portal please check it out here: How to create a new user in the Microsoft 365 admin portal.

Page Contents

Microsoft 365 Groups

Distribution Groups

Security Groups

Mail Enabled Security Groups

Microsoft 365 Groups

Microsoft 365 groups can contain users both inside and outside of your Microsoft 365 tenant. There are primarily used for collaboration services such as Teams and SharePoint. By creating a Microsoft 365 group you will be creating the following 

  • Exchange Inbox and calendar
  • SharePoint team site and OneNote notebook
  • Microsoft Teams Group
  • Planner
  • Power BI Workspace
  • Stream
Microsoft 365 groups are primarily for users who are likely to collaborate on files simultaneously through Microsoft Teams, used a shared calendar and share files through SharePoint.

Distribution Groups

Distribution groups are used for sending email notifications to a group of people who are a member of that group. They are best for when you need to broadcast information to a specific set of users. For example, you have a distribution group named [email protected]. This group would contain all the staff at the Ourcloudnetwork organisation. Sending an email to this group would broadcast information to all members of staff. 

Distribution groups only provide email broadcasting capabilities and are meant for groups of users who need to share information with their team. If a request type email gets sent to the distribution groups, the users would not know if someone has actioned that email unless additional communication has been had.

Security Groups

Security groups are used to grant groups of users access to certain resources. Instead of applying permissions to individual users you can add all required users to the security group and apply permissions to the security group.

Security groups can contain both users accounts and devices used with Microsoft Intune which is Microsoft’s mobile device management platform.

Some resources they can be used for include:

  • Applying permissions to a SharePoint folder
  • Applying policies to devices in Intune
  • They can be added to a Team
  • You can create dynamic members for security groups
You can also use what is called ‘nested groups’, which is having a security group as a member of another security group. The subgroup will inherit the permissions of the parent group, saving you configuration time if the scenario calls for it.

Mail Enabled Security Groups

Mail enabled security groups work as a combination of regular security groups and distribution groups. They can be used to apply permissions to certain resources as mentioned above, they then allow you to broadcast emails to groups of users in the same fashion as a distribution group. One caveat is that Mail Enable Security Groups cannot contain devices and their memberships cannot be dynamically managed.

Mail Enabled Security Groups are useful to help broadcast information to groups of users who can access a particular service, that has been granted through that mail enabled security group.


Thank you for taking the time to read our post! Hopefully, we have helped you understand the different types of Microsoft 365 groups available and how you can create them. If you have not already my video at the top of this post will help you through creating groups. Make sure you bookmark our blog for easy access next time!

Daniel Bradley

My name is Daniel Bradley and I work with Microsoft 365 and Azure as an Engineer and Consultant. I enjoy writing technical content for you and engaging with the community. All opinions are my own.

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