MS-700 Manage Teams, Channels, Chats, and Apps Practice Question
Which TWO actions must you take to allow external users from a specific domain to participate in Teams chats?
⚠ Common exam trap
The trap is confusing external access (federation) with guest access. Candidates often think enabling guest access is needed for external chats, but guest access is for inviting external users into teams, not for one-to-one chats. Also, shared channels are sometimes mistaken as a solution for external chat, but they are for collaboration within a team.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Add the domain to the Allow list in External Access.
Option A is correct because adding the specific domain to the Allow list in External Access (Teams admin center > Users > External access) explicitly permits users with that domain to communicate with your users in Teams chats. Option C is correct because the External Access setting must be configured to 'Allow only specific external domains' so that the Allow list is actually enforced; without this mode, the domain list is not applied. Together, A and C satisfy the requirement of allowing only one specific external domain to participate in chats. Option B is incorrect because Guest Access governs guests who are invited into the tenant via Microsoft Entra B2B, not federated external users chatting from their own tenant. Option D is incorrect because Guest Access policies apply to guest accounts in your tenant, not to external users in another domain. Option E is incorrect because shared channels are for cross-organization collaboration within channels and do not govern external chat participation for a specific domain.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Add the domain to the Allow list in External Access.
Why this is correct
Adding a domain to the allow-list is a mandatory step for restricted external access configurations. Without this entry, Microsoft 365 blocks incoming and outgoing communication requests from that specific domain, effectively preventing any Teams chat interaction between users of the two organizations involved in the collaboration.
- ✗
Enable Guest Access for the organization.
Why it's wrong here
Guest access enables external users to become members of a specific team, allowing them to participate in channels and access shared files. However, it is distinct from external access, which enables one-on-one chats and calls between users from different organizations without requiring them to join a team.
- ✓
Configure the External Access setting to 'Allow only specific external domains'.
Why this is correct
Setting the external access policy to 'Allow only specific external domains' is the required mode for enforcing domain-level restrictions. This configuration ensures that your tenant ignores communication attempts from any domain not explicitly defined in the allow-list, providing a controlled and secure communication environment for your users.
- ✗
Assign a Guest Access policy to the external users.
Why it's wrong here
Guest access policies govern the permissions of guest users who have been invited to join a team. Since the requirement is for chat-based interaction between organizations rather than team membership, assigning guest access policies does not address the underlying external access configuration needed for cross-tenant chat.
- ✗
Create a shared channel for the external domain.
Why it's wrong here
Shared channels allow cross-tenant collaboration, but they require a different configuration involving B2B direct connect. This does not address the standard requirement for enabling simple one-on-one Teams chats, which relies on the external access settings rather than the shared channel functionality managed within the Teams client.
About these practice questions
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JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official Microsoft exam blueprint
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