Mastering Office 365 Administration

Authorization stage

In the initial stage, you simply need to verify for Microsoft's purposes that you aren't adding a domain that is owned by somebody else. While technically there's more than one way to do this, we always recommend that you do it with a TXT record. The alternative method of using an MX record is only suitable for companies who are starting fresh and do not need to worry about misdelivered emails to an existing service provider.

So, you start the process by entering your domain into Office 365. They give you a TXT record with a specific code that you need to add to your DNS host. Once that's done, they verify the code, and voilà! The domain is now usable as a suffix for Office 365 users.