[BUG] Microsoft 365 Connector fails after successful Entra authentication and valid MCP Server permissions

Preflight Checklist

• [x] I have searched existing issues and this hasn't been reported yet
• [x] This is a single bug report (please file separate reports for different bugs)
• [x] I am using the latest version of Claude Code

What's Wrong?

Microsoft 365 Connector consistently fails in Claude Desktop with:

Authorization with the MCP server failed

Reference ID:
ofid_ffaf53cbfd084f6a (example reference ID; a new reference ID is generated on each failed attempt)
Reference ID changes on each reproduction, but the same authorization failure occurs consistently.

Investigation shows Microsoft identity and permission layers are functioning correctly:

• User sign-in succeeds
• Conditional Access does not block sign-in
• M365 MCP Server for Claude is resolved as Resource
• Resource Service Principal is present
• Required Microsoft Graph delegated permissions are present
• Permissions are granted through Admin consent by administrator

Despite successful authentication and valid permissions, connector authorization fails inside Claude.

This suggests a possible MCP server-side authorization defect or connector-side internal bug.

What Should Happen?

After successful Entra authentication and successful MCP Server authorization, Claude should complete Microsoft 365 Connector setup successfully and allow access to Microsoft 365 resources.

Error Messages/Logs

Claude error:
Authorization with the MCP server failed

Reference ID:
ofid_ffaf53cbfd084f6a

Verified in Microsoft Entra:

Sign-in: Success

Conditional Access:
No policies interrupted or blocked the sign-in

Resource:
M365 MCP Server for Claude

Verified delegated permissions with Admin consent:
- Files.Read
- Files.Read.All
- Mail.Read
- Calendars.Read
- Chat.Read

Steps to Reproduce

1. Open Claude Desktop

1. Configure Microsoft 365 Connector

1. Authenticate with Microsoft Entra tenant account

1. Authentication succeeds

1. Return to Claude Desktop

1. Observe error:

Authorization with the MCP server failed

Issue reproduces consistently.

Claude Model

Sonnet (default)

Is this a regression?

No, this never worked

Last Working Version

_No response_

Claude Code Version

2.1.110 (Claude Code)

Platform

Anthropic API

Operating System

macOS

Terminal/Shell

Terminal.app (macOS)

Additional Information

Evidence suggests issue occurs after successful Microsoft identity flow.

Validated:

• Authentication succeeds
• Conditional Access not blocking
• Resource service principal resolves
• Required Graph permissions exist
• Admin consent confirmed

Failure appears to occur in:

• MCP server-side authorization handling, or
• Connector-side internal token processing

Supporting screenshots attached.

<img width="1002" height="136" alt="Image" src="https://github.com/user-attachments/assets/39dccb03-e7ad-4db3-bf98-feec796b77af" />

<img width="2712" height="1676" alt="Image" src="https://github.com/user-attachments/assets/4a23907e-7379-4fb9-acef-d6d1213f9c8b" />

<img width="2510" height="966" alt="Image" src="https://github.com/user-attachments/assets/962b1d1b-58b7-4867-8ad6-aec5e52bc9be" />

<img width="2102" height="1438" alt="Image" src="https://github.com/user-attachments/assets/f53920ab-4363-4896-95b9-a5aac01b6f8e" />