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How to fix Microsoft 365 apps showing 'Unlicensed Product' or 'Sign in required' activation errors

Microsoft 365 & Office KB-467

Summary

This guide helps you troubleshoot and resolve: How to fix Microsoft 365 apps showing 'Unlicensed Product' or 'Sign in required' activation errors. Follow the steps below to fix the issue.

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Common Causes

When Microsoft 365 apps such as Word, Excel, Outlook or PowerPoint display an "Unlicensed Product" notice or repeatedly prompt you to "Sign in", the application has lost its link to your valid subscription licence. This is a common issue and is usually resolved without needing to reinstall the software. The steps below will walk you through signing out, clearing stored credentials, and re-assigning your licence so your apps return to a fully activated state.

Quick Fix Steps

For most users, the following sequence resolves the issue in under five minutes:

  1. Open any Microsoft 365 app (for example, Word).
  2. Go to File > Account > Sign out.
  3. Close all Microsoft 365 apps completely, including Outlook.
  4. Open Credential Manager from the Windows Control Panel and remove any stored credentials for microsoftonline, office and onedrive.
  5. Reopen Word, click Sign in, and enter your Microsoft 365 work or school account.
  6. Restart the computer and confirm the activation banner has disappeared.

If the banner persists after completing these steps, continue to the detailed instructions below.

Detailed Instructions

Step 1: Confirm Your Subscription Is Active

Before troubleshooting the apps themselves, verify that your licence has not expired or been removed.

  1. Open a web browser and sign in at https://account.microsoft.com/ using the same email address you use with Microsoft 365.
  2. Select Services & subscriptions from the top menu.
  3. Confirm that your Microsoft 365 subscription is listed and shows a status of Active.
If your subscription shows as Expired, Disabled or is missing entirely, the licence itself needs to be renewed or re-assigned before the apps will activate. In that case, open a ticket and our team can check your account.

Step 2: Sign Out of All Microsoft 365 Apps

Signing out forces the apps to forget the cached account and prompts a fresh authentication when you next open them.

  1. Open Word, Excel, PowerPoint or Outlook.
  2. Click File > Account.
  3. Under the user information section, click Sign out.
  4. Repeat for any other Microsoft 365 apps that are currently open.
  5. Close every Microsoft 365 application, including Outlook and OneDrive.
Make sure Outlook is fully closed, not just minimised. Check the system tray (the area near the clock) for the Outlook icon, right-click it, and select Close. Background Outlook processes can prevent a clean sign-out.

Step 3: Clear Stored Credentials on Windows

Windows stores authentication tokens in Credential Manager. Stale or corrupted entries here are one of the most common causes of activation errors.

  1. Press Windows + R, type control keymgr.dll and press Enter.
  2. Click the Windows Credentials tab.
  3. Scroll through the list and remove every entry that contains any of the following:
    • microsoftonline
    • office
    • onedrive
    • outlook
    • live.com
  4. To remove an entry, click the arrow next to it and select Remove.
  5. Close Credential Manager when finished.

Step 4: Clear Credentials on macOS

If you are using a Mac, the equivalent cache lives in the Keychain.

  1. Open Keychain Access (found in Applications > Utilities).
  2. Search for microsoft, office and onedrive.
  3. Select each relevant entry and press Delete.
  4. Confirm the deletion and provide your Mac password if prompted.
  5. Quit Keychain Access.

Step 5: Sign Back In and Reactivate

  1. Open Word (or any Microsoft 365 app).
  2. If prompted, click Sign in and enter your full work or school email address.
  3. Complete any multi-factor authentication prompts that appear.
  4. Once signed in, go to File > Account and confirm that the product information shows Microsoft 365 Apps for Business or Microsoft 365 Apps for Enterprise with a status of Activated.
  5. Open your other apps (Excel, PowerPoint, Outlook) one at a time so each picks up the signed-in account.
The first time you open each app after signing in, you may be asked to accept the licence terms or choose default settings such as theme and update preferences. This is normal and only happens once.

Troubleshooting

The "Unlicensed Product" Banner Returns After Restart

If the warning reappears every time you open an app, the licence is likely not assigned to your account in the Microsoft 365 admin centre.

  1. Ask your administrator (or, if you manage your own tenancy, sign in at https://admin.microsoft.com/) to navigate to Users > Active users.
  2. Select the affected user and open the Licences and apps tab.
  3. Confirm that a Microsoft 365 licence is ticked, then click Save.
  4. Wait five to ten minutes for the change to propagate, then repeat Steps 2 to 5 above.

Outlook Specifically Shows "Need Password"

Outlook uses its own profile in addition to the app licence. If only Outlook is affected, the issue is usually with the mail profile rather than the licence.

  1. Open Control Panel > Mail > Show Profiles.
  2. Click Add and create a new profile named something like Outlook-New.
  3. Configure your email account when prompted. For setup details, see Setting Up an Email Account in Outlook (POP/IMAP/Exchange).
  4. Under Always use this profile, select the new profile and click OK.
  5. Test Outlook. If the activation error is gone, you can safely remove the old profile.

Multiple Devices Are Showing the Error

If every device your team uses is reporting the same error at the same time, the licence assignment itself is the problem rather than any individual machine. In this situation, open a ticket with the affected user email addresses and our team will verify the licence state on your tenancy.

Apps Were Installed With a Different Account

If the apps were originally activated using a personal Microsoft account or a previous work account, the licence may still be tied to that identity. Repeating Steps 2 to 5 will overwrite the cached account. If the old account keeps reappearing, perform an Online Repair of the installation:

  1. Close all Microsoft 365 apps.
  2. Open Control Panel > Programs and Features.
  3. Locate Microsoft 365 Apps (or Microsoft Office) in the list, select it, and click Change.
  4. Choose Online Repair and click Repair.
  5. Restart the computer once the repair has finished.
  6. Open Word and sign in with your current Microsoft 365 account to reactivate.

If the activation error continues after completing all of the steps above, open a support ticket with a screenshot of the error message and the affected app version (found under File > Account > About). Our team can then investigate the licence state on your tenancy and assist with reactivation.

Still Having Issues?

Need more help? If the issue persists after trying these steps, please open a support ticket and our team will assist you.

💻 Open a Ticket

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