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Manage Microsoft 365 users from Users > Active users when you are starting with a person, or manage assignments from Billing > Licenses when you are starting with a product. For recurring assignments to teams or roles, use group-based licensing. Before changing anything, confirm available seats, set each user’s usage location, and use an appropriately limited admin role.
Choose the right license-management route
| Approach | Best for | Key consideration |
|---|---|---|
| Active users | Adding one user or changing licenses for selected people | Bulk operations can remove existing licenses; check the scope before applying them. |
| Billing > Licenses | Assigning one product to users or groups | The assignment panel accepts up to 20 users and/or groups at a time, according to Microsoft’s admin-center instructions. |
| Group-based licensing | People whose licenses should follow group membership | Nested groups do not provide full inheritance, and assignment processing can take time. |
| PowerShell or Microsoft Graph | Repeatable, automated user or group operations | Commands and permissions depend on the tenant and task; Microsoft’s guidance does not provide one universal script. |
Microsoft’s admin-center interface can change, so labels below reflect Microsoft Learn documentation checked on October 7, 2026.
Check permissions, seats, and usage location first
- Use an account with at least the User Administrator or License Administrator role for the documented user-creation and license tasks. Choose the least-privileged role that can complete the work. Microsoft recommends using roles with the fewest permissions and limiting the number of users with administrative permissions: About administrator roles in the Microsoft 365 admin center.
- Check that the organization has a subscription seat available for the product. An account can be created without an available seat, but it cannot use licensed services until a license is assigned.
- Set the user’s usage location. If a user has no specific location, group licensing uses the tenant location; Microsoft recommends setting a location during creation, especially when the organization operates in multiple regions.
Add users and assign licenses
Add one user
- In the Microsoft 365 admin center, go to Users > Active users > Add a user. In the simplified view, choose Add user.
- Enter the person’s name, username, and domain. Choose their usage location.
- Select the appropriate license and, if needed, select or clear the included apps and services.
- Set any required role or profile details, review the selections, and finish adding the user.
Microsoft’s step-by-step guidance is available at Add users and assign licenses in Microsoft 365.
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- Go to Users > Active users > Add multiple users.
- Enter user details in rows or upload a CSV file.
- Choose the shared usage location, licenses, and apps for the users in that batch.
- Review the batch and add the users.
Directory synchronization and mailbox migration are also documented ways to bring multiple accounts into Microsoft 365. Creating or synchronizing accounts does not, by itself, ensure that licenses are assigned.
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Change licenses for a person or a product
Start with a person in Active users
- Go to Users > Active users and select the user.
- Open Licenses and Apps > Licenses.
- Select products to assign or clear products to unassign, then save.
For several selected users, choose Manage product licenses. Review whether the operation will add licenses while retaining existing ones or unassign all. The bulk Unassign all option can clear every product license in the operation’s scope, so verify the selected users and intended change before saving.
Start with a product in Billing
- Go to Billing > Licenses and select the product.
- Choose Assign licenses, then add the users or groups.
- Choose whether to enable specific apps and services, and assign.
This panel supports up to 20 users and/or groups in a single operation. The Licenses page may combine totals from subscriptions with the same product name; Your products shows a separate row for each subscription. See Microsoft’s license-assignment instructions for details.
Use groups when assignments should follow membership
Group-based licensing is useful when a cohort shares the same entitlement—for example, a department or job role. Assign a product to a supported security, mail-enabled, or Microsoft 365 group under Billing > Licenses. Membership then governs license assignment, reducing the need to make the same change user by user.
- Nested groups: Full license inheritance through nested groups is not supported; only first-level users receive the assignment.
- Location: Users without a specific usage location inherit the tenant location. Set locations individually when people are in different regions.
- Processing time: Changes to large groups can take time to process. Microsoft gives a group of 100,000 users as an example of a large group; this is an example, not a published processing-time guarantee.
For a move between licensed groups, add the user to the destination group first. Confirm the new license appears on the user’s Licenses page, then remove the old group membership. Removing the old membership first can leave the user temporarily without a license while the new assignment is processed. More detail is in Microsoft’s group-license guidance.
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Resolve assignment errors
Open the product’s Errors & Issues view to see users who did not receive a license and the reported assignment reasons. Microsoft lists common causes including unavailable seats, conflicting services or license plans, and invalid usage locations.
- Read the reported reason and address the underlying issue—for example, free a seat, resolve a plan conflict, or correct the user’s location.
- Use Reprocess where available after fixing the issue.
- For group-based licensing, reprocessing handles up to 20 users per attempt, according to Microsoft’s group-license instructions.
Understand what license removal changes
Removing a license is not the same as deleting the account, and it can affect access to services and data. Microsoft states that Exchange Online data associated with the account is held for 30 days after license removal before deletion, subject to retention-policy handling. A mailbox without a license may no longer be searchable through eDiscovery tools, and installed Office apps can show unlicensed-product or activation errors.
OneDrive files are not deleted merely because a license is removed. Deleting the account or removing it through Active Directory synchronization can affect them, so plan access, retention, and data transfer before changing the account. Review Microsoft’s license-removal guidance and applicable retention policies before proceeding.
Offboard accounts and reduce subscription seats separately
Deleting a user and lowering the number of purchased subscription seats are separate actions. A deleted user’s license may become available for reassignment, but the paid subscription quantity is not automatically reduced. A billing administrator must change the quantity through Billing > Your products.
- If the account is synchronized from on-premises Active Directory, delete it in Active Directory.
- Before deletion, handle any required email forwarding and dependencies on a mailbox converted to a shared mailbox.
- Plan the user’s data access and retention before deleting the account or removing its license.
See Microsoft’s instructions for deleting a user.
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