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7 min readUpdated 11 June 2026

Microsoft 365 Hardening Checklist

The 30 tenant settings we change first on every Australian Microsoft 365 environment we take over — business email compromise is still the number one reported loss vector.

Why M365 first

Business email compromise consistently tops ACSC reported financial losses for Australian businesses. Nearly every case starts with a stolen session or password on a tenant that never had conditional access configured.

These controls cost nothing beyond licensing you likely already hold — the gap is configuration, not budget.

Order of operations

Do identity before mail flow, and mail flow before data protection. Fixing DLP on a tenant with unrestricted legacy auth is decorative.

The checklist

Identity

  • Security defaults replaced by explicit Conditional Access policies
  • MFA required for all users, including break-glass exclusions documented
  • Legacy authentication blocked tenant-wide
  • Sign-in risk and user risk policies enabled
  • Admin roles assigned just-in-time via PIM
  • Guest access restricted and reviewed quarterly

Email

  • SPF, DKIM and DMARC published with a reject or quarantine policy
  • External sender warning banner enabled
  • Auto-forwarding to external domains blocked
  • Anti-phishing impersonation protection covers executives and finance
  • Safe Links and Safe Attachments enabled for all users
  • Mailbox auditing on and retained for at least 12 months

Data and devices

  • Anonymous sharing links disabled or expiry-limited in SharePoint and OneDrive
  • Sensitivity labels applied to financial and customer data
  • Device compliance required for access to corporate data
  • Retention policies configured for mail, Teams and OneDrive

Monitoring

  • Audit logs forwarded to a SIEM or managed SOC
  • Alerts configured for inbox rule creation and impossible travel
  • Monthly review of Secure Score movement with named owner

Need this done, not just documented?

Fast Emu delivers the controls in this checklist as a managed service, monitored 24/7 from Australia.