Creating and Managing Shared Channels for Cross-Tenant Collaboration in Microsoft Teams
Shared channels in Microsoft Teams represent one of the most powerful collaboration features introduced by Microsoft for multi-organization environments. They enable users from different Microsoft 365 tenants to work together in a single, shared workspace—without switching accounts or tenants. This functionality relies on B2B Direct Connect, a feature of Microsoft Entra ID (formerly Azure Active Directory), which provides secure, policy-driven, and auditable access between trusted organizations.
This guide explains in detail how to create, share, manage, and secure shared channels, and how cross-tenant collaboration functions within Microsoft Teams.
🔹 Understanding Shared Channels
Before creating a shared channel, it’s important to understand what makes it different from standard and private channels:
| Channel Type | Visibility | Membership Control | Data Storage | External Access |
|---|---|---|---|---|
| Standard | Visible to all team members | All members automatically included | Stored in main team’s SharePoint site | Not supported |
| Private | Visible only to selected members of the same organization | Invitation-only | Separate SharePoint site | Not supported |
| Shared | Visible only to explicitly added members or external teams | Invitation-only, supports external members | Separate SharePoint site per organization | Supported via B2B Direct Connect |
Shared channels bridge the gap between organizational boundaries by allowing teams to collaborate without guest accounts. Instead, external users remain authenticated within their own tenant, reducing friction and improving compliance.
🔹 Prerequisites for Shared Channel Creation
Before a user can create or share a channel with external participants, several administrative configurations must be completed:
- B2B Direct Connect must be enabled between the collaborating tenants through the Microsoft Entra admin center.
- Both organizations must allow shared channels under Teams policies.
- Cross-tenant access settings must be configured to define:
- Which users or groups can collaborate externally
- Whether Conditional Access (CA) policies like MFA or compliant devices apply
- Inbound and outbound access controls for B2B connections
- Users must be licensed for Microsoft Teams and SharePoint Online.
- Optional: Review and configure information barriers if your organization uses them.
Once these configurations are in place, users with appropriate permissions can create shared channels.
🔹 Step 1: Creating a Shared Channel
To create a shared channel:
- Open Microsoft Teams and navigate to the target team.
- Select More options (⋯) → Add channel.
- Enter a name and description.
- Under Privacy, select Shared – People you choose from your org or other orgs can access this channel.
- Choose Create to finalize.
This step creates the shared channel structure within the selected team. At this stage, no external access is configured yet.
In the interface (see Figure 4.37 in Microsoft documentation), Teams clearly identifies the channel as Shared, distinguishing it from standard or private channels.
🔹 Step 2: Inviting Collaborators
After creating the channel, the owner can invite collaborators immediately or postpone invitations. To share the channel later:
- Go to the channel and select More options (⋯) → Share channel.
- Choose one of the following options:
- With people – Invite specific users within your tenant or from external organizations.
- With a team – Invite a team that you own or an external team by selecting the team owner.
- With a team you own – Share the channel within your other internal teams.
This flexibility allows fine-grained collaboration, from individual guest contributors to full external teams.
Once shared, external users receive a Teams notification requesting them to review and accept permissions (Figure 4.39). This ensures explicit consent and transparency.
🔹 Step 3: Accepting Invitations
When an external user or team owner receives an invitation:
- They’ll see a Teams notification from the inviting organization.
- The notification outlines requested permissions (for example, access to files, conversations, or shared apps).
- The user can Accept or Decline the invitation.
If the external user accepts, the shared channel automatically appears in their Teams client, under a new section displaying the inviting organization’s name beneath the team title. A link icon also appears beside the shared channel name as a visual indicator (Figure 4.40).
For external teams, the team owner can accept on behalf of all members. Upon acceptance, the owner is prompted to select an existing team where the shared channel should appear (Figure 4.41).
Once integrated, the shared channel becomes part of that team’s channel list. If the shared channel is added to an existing team, it will display only the link icon without showing the external organization name (Figure 4.42).
🔹 Step 4: Storage and Data Management
The data architecture behind shared channels is designed with data sovereignty and security isolation in mind.
Each shared channel creates its own dedicated SharePoint site, similar to a private channel. However, the behavior varies depending on how it’s shared:
- Shared with individuals only:
- A single SharePoint site is created and hosted by the creating organization.
- External participants access the site through secure links with delegated permissions.
- Shared with external teams:
- A new SharePoint site is automatically created within each participating organization’s tenant.
- Each organization manages and stores its own data copy.
- This ensures compliance with local and corporate data policies.
This architecture prevents data leakage and provides a clean separation of data ownership, ensuring that no organization loses control of its intellectual property.
🔹 Step 5: Security and Access Controls
Security and compliance are foundational to shared channel functionality. Administrators should configure the following elements to maintain governance:
1. Cross-Tenant Access Settings
Define inbound and outbound rules under Microsoft Entra → External Identities → Cross-tenant access settings:
- Specify trusted partner tenants.
- Determine whether external users can access Teams, SharePoint, and other Microsoft 365 apps.
- Enforce Conditional Access policies, including MFA and compliant devices.
2. Conditional Access Policies
Apply Conditional Access at the tenant or app level to:
- Require MFA for external users
- Enforce session controls to prevent data downloads
- Restrict access to compliant or hybrid-joined devices
3. Compliance and Auditing
- All shared channel activities (messages, file access, permissions) are logged in Microsoft Purview Audit Logs.
- Use eDiscovery (Premium) in Purview to identify shared content across tenants.
- Enable DLP (Data Loss Prevention) policies to monitor and restrict file sharing.
4. Access Reviews and Lifecycle Management
- Use Access Reviews in Microsoft Entra ID to periodically review external users’ access.
- Remove inactive or expired collaborations using Lifecycle Management policies.
🔹 Step 6: User Experience and Interface Indicators
From a user perspective, shared channels integrate seamlessly into the Teams interface but include clear visual markers to indicate external collaboration.
| Scenario | Display Behavior |
|---|---|
| Shared with external individual | Shows organization name + link icon |
| Shared with external team | Shows link icon only |
| Internal shared channel | Appears as a standard channel with link icon |
These visual cues ensure that users always know when they’re interacting across organizational boundaries.
🔹 Step 7: Best Practices for Managing Shared Channels
To ensure secure, effective collaboration across tenants:
- Establish Mutual Trust
- Work with partner organizations to align security and access requirements.
- Configure reciprocal cross-tenant policies for seamless connection.
- Use Groups or Teams, Not Individuals, When Possible
- Sharing with entire external teams simplifies access management and reduces administrative overhead.
- Regularly Audit Access
- Monitor external users and teams using audit reports and access reviews.
- Apply Data Classification and Sensitivity Labels
- Use Microsoft Purview to label shared content, controlling how data can be viewed, copied, or printed.
- Limit Creation Permissions
- Use Teams policies to restrict shared channel creation to specific groups or departments.
- Educate End Users
- Train users to identify shared channel indicators and understand what data is appropriate to share externally.
🔹 Summary
Shared channels in Microsoft Teams revolutionize external collaboration by eliminating the need for guest accounts or tenant switching. With B2B Direct Connect and Microsoft Entra cross-tenant access, organizations can collaborate efficiently while maintaining full control of data, permissions, and compliance.
Each shared channel provides a secure, governed workspace where both internal and external teams can chat, share files, and co-author documents in real time—all while ensuring that data stays within its originating organization’s control.
When implemented with the right policies, shared channels create a balance between productivity and security, supporting the modern needs of hybrid and multi-organization collaboration in Microsoft 365.
