---
title: "How to Share OneDrive Folders with External Users"
lang: en
canonical_url: https://www.papermark.com/blog/how-to-share-onedrive-folder-with-external-users
last_updated: 2026-02-28
published: 2025-06-25
category: [document-sharing]
author: "Marc Seitz"
summary: "Learn how to securely share OneDrive folders with external users and discover enhanced protection with Papermark's advanced document security solutions."
---

# How to Share OneDrive Folders with External Users

OneDrive is Microsoft's cloud storage solution, used by over 250 million users worldwide for document sharing and collaboration. When working with external partners, clients, or stakeholders, knowing how to properly share OneDrive folders is essential while enabling effective collaboration.

## How to share OneDrive folders with external users

This comprehensive guide will walk you through OneDrive's folder sharing features and introduce advanced protection options with Papermark for when you need enhanced security for sensitive documents shared with external users.

## Step 1: Access your OneDrive account

Before you can share folders, ensure you have proper OneDrive access:

1. Go to [onedrive.live.com](https://onedrive.live.com)
2. Sign in with your Microsoft account
3. Verify you have the necessary permissions for folder sharing
4. Ensure your organization allows external sharing

![OneDrive interface overview](https://img.papermarkassets.com/upload/file_K2SgWAbnNJfPCzNnKBQhtC-Screenshot-2025-06-25-at-23.43.15.png)

## Step 2: Organize your folder structure

Proper organization is crucial when sharing folders with external users:

1. Create a dedicated folder for external sharing
2. Organize documents into logical subfolders
3. Use clear, descriptive folder names
4. Remove any sensitive files that shouldn't be shared
5. Ensure all documents are properly formatted and ready for external review

For detailed guidance on organizing documents, see our guide on [how to share documents on OneDrive](https://www.papermark.com/blog/how-do-you-share-documents-on-onedrive.md).

![OneDrive upload files](https://img.papermarkassets.com/upload/file_51T7NWvkudwf8CLiuRC7k4-Screenshot-2025-06-26-at-23.26.56.png)

## Step 3: Set up folder sharing permissions

Configure the appropriate sharing settings for your folder:

1. Right-click on the folder you want to share
2. Select "Share" from the context menu
3. Choose the sharing method:
   - **Specific people**: Enter email addresses of external users
   - **Copy link**: Create a shareable link for broader access

![OneDrive access grant](https://img.papermarkassets.com/upload/file_363n7wHxwKEd5pcKnpQUrV-Screenshot-2025-06-25-at-23.48.23.png)

## Step 4: Configure external user access levels

Set appropriate permission levels for external users:

**For read-only access (recommended for most external sharing):**
- Select "Can view" permission
- External users can view and download files
- They cannot edit, delete, or share the folder

**For collaborative work:**
- Choose "Can edit" permission (use with caution)
- External users can modify files and add new content
- They can also share the folder with others

**For review and feedback:**
- Select "Can review" permission
- External users can add comments and suggestions
- They cannot make direct edits to files

![OneDrive folder options](https://img.papermarkassets.com/upload/file_4gZjbDcHQSiN12uuHakDQz-Screenshot-2025-06-25-at-23.49.56.png)

## Step 5: Create and customize sharing links

For broader sharing without specific email addresses:

1. Right-click on the folder
2. Select "Share" and choose "Copy link"
3. Click "Link settings" to configure security options
4. Choose from these access levels:
   - **Anyone with the link**: Most permissive (use with caution)
   - **People in your organization**: Only internal users
   - **People with existing access**: Only those already granted access
   - **People you choose**: Specific individuals only

![OneDrive sharing link](https://img.papermarkassets.com/upload/file_SaDV2CHE4ahUAj7gndtW9P-Screenshot-2025-06-25-at-23.50.22.png)

## Step 6: Set up additional security measures

Configure advanced security settings for external sharing:

1. Click "Link settings" after creating the link
2. Configure these security options:
   - **Set expiration date**: Automatically revoke access after a specified time
   - **Require password**: Add an extra layer of security
   - **Block downloads**: Prevent external users from downloading files
   - **Allow editing**: Control whether external users can modify files

![OneDrive link settings](https://img.papermarkassets.com/upload/file_EFroWZxzsGhLXdZswYtZut-Screenshot-2025-06-25-at-23.50.53.png)

## Step 7: Send invitations to external users

Share the folder with external users:

1. Enter the email addresses of external recipients
2. Add a personal message explaining the purpose of the shared folder
3. Click "Send" to deliver the invitation
4. External users will receive an email with access instructions

## Step 8: Monitor and manage external access

Track and control external user access:

1. Right-click on the shared folder
2. Select "Manage access" to view current permissions
3. Review who has access and their permission levels
4. Modify or revoke access as needed
5. Monitor folder activity through OneDrive's basic analytics

## Important limitations of OneDrive folder sharing

While OneDrive provides basic folder sharing functionality, it has several security limitations when working with external users:

### Limited external user tracking
OneDrive's analytics are primarily designed for internal users. When sharing folders with external users, you have limited visibility into:
- Who actually accessed the folder
- How long they spent reviewing documents
- Which specific files they viewed
- When they downloaded content

For comprehensive tracking of external user engagement, consider using Papermark's advanced analytics features.

### Basic security controls
OneDrive's security features for external sharing are limited:
- No dynamic watermarking to identify individual viewers
- Limited ability to prevent screenshots or forwarding
- Basic password protection without additional authentication layers
- No IP address restrictions for external access

### Audit trail limitations
OneDrive's audit capabilities for external users are restricted:
- Basic activity logs only available for Microsoft 365 Business accounts
- Limited export capabilities for compliance reporting
- No detailed page-level engagement tracking
- Minimal information about external user behavior

For a comprehensive analysis of OneDrive's security features, check out our detailed guide on [is OneDrive secure](https://www.papermark.com/blog/is-onedrive-secure.md).

## Enhanced security with Papermark for external folder sharing

When sharing sensitive folders with external users, OneDrive's basic features may not provide sufficient protection. Papermark offers advanced security features specifically designed for external document sharing:

### Advanced external user management
Papermark provides comprehensive control over external user access:
- Email verification for all external users
- Custom allow/block lists for enhanced security
- Multiple authentication layers
- Detailed user activity tracking

### Dynamic watermarking for external users
Unlike OneDrive, Papermark automatically adds viewer-specific watermarks:
- Each external user gets a unique watermark with their information
- Deters unauthorized sharing and screenshots
- Provides clear audit trail of document access
- Works across all document types

### Comprehensive external analytics
Papermark offers detailed insights into external user engagement:
- Real-time tracking of external user activity
- Page-by-page engagement analytics
- Geographic data for external viewers
- Download tracking and time spent analysis

![Papermark document analytics](https://img.papermarkassets.com/upload/file_5TJkCN6dpNi1whx6rpT6T4-document-analytics-Papermark-v2.png)

## Security comparison: OneDrive vs Papermark for external sharing

| Security feature | OneDrive | Papermark |
| --- | --- | --- |
| External user tracking | Limited to basic access logs | Comprehensive real-time analytics |
| Watermarking | ❌ | Dynamic, viewer-specific watermarks |
| Link security | Basic password and expiration | Advanced protection with IP restrictions |
| Page-level analytics | ❌ | Detailed engagement tracking |
| External authentication | Microsoft account required | Multiple authentication options |
| Audit trail | Basic logs (Business accounts only) | Comprehensive audit logs with exports |

## Best practices for OneDrive folder sharing with external users

### 1. Use specific user invitations when possible
Instead of creating open links, invite specific external users by email address. This provides better control and tracking of who has access to your folders.

### 2. Set appropriate expiration dates
Always set expiration dates for shared folders, especially when sharing sensitive information. This ensures access is automatically revoked after the intended period.

### 3. Regularly review and update permissions
Periodically check who has access to your shared folders and remove access for users who no longer need it.

### 4. Use descriptive folder names
Create clear, professional folder names that external users will understand. Avoid generic names like "Documents" or "Files."

### 5. Include a README file
Add a document explaining the folder contents, purpose, and any instructions for external users.

### 6. Monitor folder activity
Regularly check the activity logs to ensure the folder is being used as intended and to identify any potential security issues.

## Conclusion

OneDrive provides a solid foundation for sharing folders with external users, offering basic security features and easy collaboration tools. However, organizations handling sensitive information often require additional security measures, especially when working with external stakeholders.

Papermark complements OneDrive by adding advanced security features, detailed analytics, and comprehensive external user management. Whether you're sharing confidential business documents, legal contracts, or investor materials, choosing the right security features is crucial for protecting your information while maintaining effective collaboration.

For organizations requiring enhanced security and detailed tracking of external user engagement, Papermark offers a robust solution that addresses the limitations of OneDrive's basic sharing features.

## FAQ

### Can external users edit files in shared OneDrive folders?

Yes, if you grant them 'Can edit' permissions. However, it's recommended to use 'Can view' permissions for most external sharing to maintain document security.

### How do I revoke access for external users?

Right-click on the shared folder, select 'Manage access,' and remove specific users or change link permissions. You can also set expiration dates to automatically revoke access.

### Can I track when external users access shared folders?

OneDrive provides basic activity tracking for Microsoft 365 Business accounts, but Papermark offers more detailed analytics including real-time tracking and page-level engagement for external users.

### Is OneDrive secure enough for sharing sensitive folders with external users?

OneDrive offers basic security features, but for highly sensitive information, consider using Papermark's advanced security features like dynamic watermarking and comprehensive external user tracking.

### Can I password protect OneDrive folders shared with external users?

Yes, you can add password protection to sharing links, but Papermark provides more advanced security features including IP restrictions and detailed access controls for external users.

---

_Markdown version of [this article](https://www.papermark.com/blog/how-to-share-onedrive-folder-with-external-users) for AI agents and LLMs._
_More Papermark content: [llms.txt](https://www.papermark.com/llms.txt) · [full index](https://www.papermark.com/llms-full.txt)._