MS-700 Configure and Manage a Teams Environment Practice Question
You are a Teams administrator for a company that uses Microsoft 365 E5. The security team requires that all new teams created by users have a sensitivity label applied before members can be added. You need to enforce a policy so that when a user creates a new team, they must select a sensitivity label from a predefined list. The label must also apply to the associated SharePoint site and Microsoft 365 group. What should you configure?
⚠ Common exam trap
The trap here is assuming that team templates or DLP policies can enforce sensitivity labels, when only a published sensitivity label policy with the group/site requirement does so.
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
✓
Configure a sensitivity label policy in Microsoft Purview and publish it to the users, then enable the setting to require users to apply a label to teams.
Sensitivity labels from Microsoft Purview are the correct mechanism to enforce label application during team creation. By publishing a label policy and enabling the requirement for groups and sites, users must choose a label, and that label is automatically applied to the Microsoft 365 group and SharePoint site. Other options do not enforce label selection or apply labels to associated resources.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Create a Data Loss Prevention (DLP) policy in Microsoft Purview that blocks team creation without a sensitivity label.
Why it's wrong here
DLP policies in Microsoft Purview protect sensitive information in content, such as documents and emails, by detecting and blocking sharing. They do not control team creation or enforce sensitivity label application on groups and sites. Using DLP for this purpose is not supported and would not prevent team creation without a label.
- ✗
Use a Teams app permission policy to require a label before creating a team.
Why it's wrong here
Teams app permission policies govern which apps are available to users, not sensitivity labels. They have no bearing on team creation or label enforcement. Applying an app permission policy would not require users to select a sensitivity label, nor would it apply the label to the SharePoint site or Microsoft 365 group.
- ✓
Configure a sensitivity label policy in Microsoft Purview and publish it to the users, then enable the setting to require users to apply a label to teams.
Why this is correct
Sensitivity labels in Microsoft Purview, when published to users and configured with the 'Require users to apply a label to their groups or sites' setting, enforce label selection during team creation. The label automatically applies to the Microsoft 365 group and connected SharePoint site. This directly satisfies the requirement to enforce a label and apply it to associated resources.
- ✗
Create a team template in the Teams admin center with a predefined sensitivity label.
Why it's wrong here
Team templates control channels and apps, not sensitivity labels. They cannot enforce label selection during team creation. While templates can include a default label, they do not require the user to choose a label interactively, nor do they apply the label to the SharePoint site or Microsoft 365 group. This does not meet the requirement to enforce label selection.
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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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