As one of the most widely used SaaS platforms in the world, Microsoft 365 (formerly Office 365) powers communication, collaboration, and productivity for enterprises globally. Many organizations have adopted Microsoft 365 and Microsoft Office for cloud-based collaboration and productivity. But with this ubiquity comes increased attention from attackers—and a heightened need for robust security.

From Exchange Online and SharePoint to Teams and OneDrive, Microsoft 365 contains sensitive business communications, confidential documents, and access to your broader cloud and SaaS ecosystems. This makes Microsoft 365 security a critical component within your overall SaaS and identity protection strategy.

This guide breaks down Microsoft 365 (M365) security across four key areas: capabilities, best practices, features, and assessment methodology. Whether you’re a security architect, admin, or IT leader, this is your blueprint for securing M365 and tailoring security strategies to the unique needs of your organization.

Microsoft 365 Security Explained

Microsoft 365 security refers to the technologies, policies, and processes used to protect users, data, and identities within the M365 suite. While Microsoft provides a range of native capabilities, comprehensive security requires customers to actively configure, monitor, and govern those tools.

M365 operates under a shared responsibility model:

  • Microsoft secures the cloud infrastructure
  • Customers are responsible for securing identities, permissions, configurations, and usage

At the tenant level, organizations can implement security measures specific to their environment, allowing for granular control over authentication, authorization, and other security configurations.

With the rise of SaaS misconfigurations, shadow IT, and identity-based threats, relying solely on default settings or trust in the platform is no longer enough. Modern authentication methods, supported by Azure Entra ID (formally known as Azure Active Directory), are essential for protecting user identities and access. Enforcing strong password policies, including password complexity and management, further enhances identity protection.

Microsoft 365 Security Infrastructure

Microsoft 365 is built on a robust security framework designed to protect company data, devices, and support compliance across all collaboration tools. At its core, the platform integrates multi-factor authentication, security defaults, and data loss prevention to create multiple layers of defense against evolving cyber threats. Multi-factor authentication ensures that only authorized users can access sensitive data, while security defaults provide a baseline of protection for all user accounts and administrator accounts. Data loss prevention policies help safeguard confidential information from accidental or malicious exposure. By leveraging these foundational elements, administrators can develop adaptive strategies that not only protect business operations but also ensure compliance with industry regulations. Microsoft 365 security infrastructure empowers organizations to confidently collaborate and innovate, knowing their data and devices are protected by industry-leading security measures.

Microsoft 365 Security Features

Microsoft 365 includes a broad set of security and compliance features. Below are key capabilities to understand and enable:

1. Microsoft Defender for Office 365

Protects against phishing, business email compromise (BEC), and malware in Exchange Online, Teams, and SharePoint. It includes:

  • Safe Links and Safe Attachments
  • Real-time detection and threat investigation
  • Attack simulation training

Microsoft Defender for Office 365 detects and blocks malicious content, such as malware and phishing links, to prevent cyber threats from impacting users and systems. Additionally, Microsoft Defender integrates with Microsoft Copilot for Security to enhance automated investigation and response capabilities within the Microsoft 365 environment.

2. Microsoft Purview (formerly Compliance Center)

Includes Data Loss Prevention (DLP), insider risk management, communication compliance, and information protection for data governance and regulatory alignment.

3. Microsoft Entra ID Protection

Enables conditional access, risk-based policies, and MFA enforcement based on user risk, location, device posture, and sign-in behavior.

4. Secure Score

A continuously updated security rating and improvement tool that benchmarks your security posture against Microsoft’s recommendations. Secure Score helps organizations assess and improve their organization's security posture by providing actionable recommendations.

5. Unified Audit Logs

Track and review activities across Exchange, SharePoint, Teams, and other services. Logs are essential for investigation, incident response, and compliance reporting.

6. Endpoint Security Integration

Microsoft Intune and Defender for Endpoint provide device compliance, risk scoring, and policy enforcement that integrates with M365 access decisions. These endpoint security policies can also be applied to personal devices that access organizational data, ensuring that both corporate and personal devices meet security requirements.

Security for Microsoft 365 Services

Security for Microsoft 365 services delivers protection for business-critical applications and data through multiple layers of defense. Each service—whether it’s Microsoft Teams, Exchange Online, or SharePoint Online—incorporates advanced security features to ensure secure communication, file sharing, and collaboration. Microsoft Teams provides a secure environment for team interactions, with built-in controls to protect messages and shared files. The Microsoft Purview Compliance Portal offers centralized management of compliance requirements, allowing organizations to tailor security and privacy controls to their specific business sector needs. Exchange Online and SharePoint Online are fortified with layered security, including encryption, access controls, and continuous monitoring, to keep corporate data safe from unauthorized access and malicious actors. This multi-layered approach ensures that every aspect of Microsoft 365 services remains secure, supporting business productivity while maintaining compliance and data integrity.

Mobile Device Security in Microsoft 365

Securing mobile devices is a critical aspect of Microsoft 365 security, especially as employees increasingly access corporate data from smartphones and tablets. Mobile Device Management (MDM) policies allow organizations to control and secure data on mobile devices, enforcing security settings such as device encryption, app management, and secure data storage. With MDM, administrators can remotely wipe lost or stolen devices, ensuring that sensitive corporate data remains protected even if a device is compromised. Microsoft 365 integrates seamlessly with MDM solutions, enabling organizations to implement consistent security policies across all devices. By adopting MDM, businesses can minimize risks associated with mobile access, safeguard company data, and maintain control over how devices interact with the organization’s resources.

Microsoft 365 Security Best Practices

Securing Microsoft 365 requires intentional configuration, monitoring, and policy enforcement. Here are the most important Microsoft 365 security best practices to implement:

1. Enforce Multi-Factor Authentication (MFA)
Require MFA for all users, especially administrators and privileged roles. Microsoft recommends enabling phishing-resistant methods like FIDO2 or certificate-based auth.

2. Configure Conditional Access Policies
Use context-aware access controls based on identity risk, location, device compliance, and session behavior to enforce least-privilege, dynamic access.

3. Audit and Govern Admin Roles
Limit the use of global administrator accounts. Assign granular roles and use Privileged Identity Management (PIM) to enforce just-in-time access.

4. Monitor for Identity-Based Attacks
Implement Microsoft Defender for Identity and analyze sign-in logs to detect credential stuffing, impossible travel, and anomalous user behavior.

5. Enable Data Loss Prevention (DLP)
Deploy DLP policies across Exchange, SharePoint, and OneDrive to prevent unauthorized data exposure. Include sensitivity labels and content inspection rules.

6. Review and Remove Unused Integrations
Audit third-party applications connected via OAuth and Graph API, including enterprise applications and app registrations. Revoke unused or risky apps and monitor scopes for excessive permissions to maintain a secure Microsoft 365 environment.

7. Use Secure Score to Drive Continuous Improvement
Regularly review Microsoft Secure Score to identify and prioritize security recommendations.

Microsoft 365 Security Assessment

A strong security posture starts with a structured assessment. A Microsoft 365 security assessment evaluates your configuration, policies, and threat exposure across key categories:

Identity and Access Management

  • MFA enabled for all users?
  • Conditional access policies in place?
  • Privileged accounts governed by PIM?
  • Password and access policies reviewed and customized for specific users based on their roles or risk profiles?

Email and Collaboration Security

  • Defender for Office 365 configured?
  • Anti-phishing, spoofing, and malware policies enabled?
  • DLP rules and sensitivity labels applied?
  • Transport Layer Security (TLS) enabled for encrypting email communications?

App and Integration Governance

  • How many third-party apps are connected?
  • Are any apps using risky or excessive permissions?
  • Is app consent restricted or reviewed regularly?

Data and Compliance

  • Audit logs enabled and stored for at least 90 days?
  • eDiscovery and Insider Risk policies configured?
  • Is access to sensitive files being monitored?

Reporting and Response

  • Secure Score tracked and acted upon?
  • Alerts set up in the Microsoft 365 Defender portal?
  • Automated incident response workflows in place?

Use Microsoft’s built-in Security Center, Compliance Center, and advanced SSPM tools to run regular audits and track improvements over time. Valence offers a free risk assessment so you can see how your Microsoft 365 security stacks up.

Incident Response and Remediation in Microsoft 365

Incident response and remediation are essential for maintaining a strong security posture in Microsoft 365. Microsoft Defender leverages automated investigation and response capabilities, powered by machine learning, to quickly identify and address potential threats such as malware infections and compromised accounts. The platform continuously monitors user activity and data flows, providing real-time threat detection and automated remediation to contain incidents before they escalate. Conditional access policies further enhance security by dynamically assessing risk factors—such as user location, device security status, and behavior—before granting access to Microsoft 365 services. These policies ensure that users access sensitive data only under secure conditions, with permissions adjusted based on ongoing risk assessments. By combining automated investigation with adaptive access controls, Microsoft Defender enables organizations to respond swiftly to incidents and protect their data and users from evolving threats.

Security Awareness and Training for Microsoft 365 Users

Building a resilient security posture in Microsoft 365 starts with empowering users through security awareness and training. Regular training programs help employees recognize and respond to potential threats, such as phishing attacks and data exfiltration, reducing the risk of breaches caused by human error. Microsoft 365 offers a range of resources and tools to support organizations in implementing effective security awareness initiatives, including guidance on identifying suspicious behavior and following security best practices. By fostering a culture of security, organizations can ensure that users understand their role in protecting company data and are equipped to prevent compromised accounts and other threats. Ongoing education not only strengthens the organization’s defenses but also supports compliance and the safe use of collaboration tools across the business.

Frequently Asked Questions

What is Microsoft 365 security?
Microsoft 365 security refers to the set of technologies, tools, configurations, and best practices designed to protect users, data, identities, and applications within the Microsoft 365 cloud platform.

What are the key security features of Microsoft 365?
Important features include Microsoft Defender for Office 365, Azure AD Conditional Access, Secure Score, DLP, Unified Audit Logs, and Microsoft Entra Permissions Management.

How do I improve Microsoft 365 security?
Start by enabling MFA, setting up conditional access policies, auditing privileged access, and using Secure Score to guide ongoing improvements. Implement DLP and monitor third-party app access.

Does Microsoft 365 include Zero Trust capabilities?
Yes. Microsoft 365 supports Zero Trust via context-aware access, MFA, continuous evaluation of session risk, and tight integration with device compliance and identity governance tools.

How do I assess my Microsoft 365 security posture?
Conduct a structured assessment that covers identity, data, collaboration, integrations, and response capabilities. Use Microsoft Secure Score and audit logs, or leverage a comprehensive SaaS security platform with an advanced Security Posture Management (SSPM) solution for deeper visibility. Valence offers a free risk assessment to assess your Microsoft 365 security posture.

Final Thoughts

Microsoft 365 is an enterprise-grade productivity platform that powers email, collaboration, file sharing, and communication for millions of businesses worldwide—making it foundational to daily operations and business continuity. But without intentional configuration, governance, and monitoring, this same platform can become a soft target for attackers, exposing organizations to credential-based breaches, data leaks, and compliance violations. Securing Microsoft 365 isn’t just a technical requirement—it’s a business-critical imperative to protect sensitive information, maintain customer trust, and ensure uninterrupted productivity in a cloud-first world.

Strong M365 security starts with identity protection, continues with access governance, and extends to visibility, automation, and continuous improvement.

To protect your users, data, and environment, follow the best practices outlined above, leverage Microsoft’s native tools, and layer in external solutions to enhance visibility and control.

Ready to secure Microsoft 365 and take control of your SaaS security posture?

→ Book a personalized demo to explore how Valence helps security teams discover misconfigurations, identity risks, and over-permissioned integrations in Microsoft 365—and fix them fast.

Suggested Resources

What Are SaaS Integrations?
Read more

Strengthening SaaS Applications with Secure Non-Human Identity Management
Read more

Understanding the Shared Responsibility Model in SaaS
Read more

Video: Valence Security in 3-Minutes
Read more

See the Valence SaaS Security Platform in Action

Valence's SaaS Security Platform makes it easy to find and fix risks across your mission-critical SaaS applications

Schedule a demo