Outlook 2003 or 2007 Won't Save Hosted Exchange Password

For many people using hosted Exchange services, password saving problems could plague you. That is mainly because Outlook doesn’t like it if the Exchange server’s domain doesn’t match your domain.

Fortunately there is a way around this, because by the default way it is set up, you would have to enter your password every time you open up Outlook.

First step is to change the registry key:

HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa

Change lmcompatibilitylevel to “2”

Here is the meanings of these numbers (source):

0 – Clients use LM and NTLM authentication, but they never use NTLMv2 session security. Domain controllers accept LM, NTLM, and NTLMv2 authentication.
1 – Clients use LM and NTLM authentication, and they use NTLMv2 session security if the server supports it. Domain controllers accept LM, NTLM, and NTLMv2 authentication.
2 – Clients use only NTLM authentication, and they use NTLMv2 session security if the server supports it. Domain controller accepts LM, NTLM, and NTLMv2 authentication.
3 – Clients use only NTLMv2 authentication, and they use NTLMv2 session security if the server supports it. Domain controllers accept LM, NTLM, and NTLMv2 authentication.
4 – Clients use only NTLMv2 authentication, and they use NTLMv2 session security if the server supports it. Domain controller refuses LM authentication responses, but it accepts NTLM and NTLMv2.
5 – Clients use only NTLMv2 authentication, and they use NTLMv2 session security if the server supports it. Domain controller refuses LM and NTLM authentication responses, but it accepts NTLMv2.

I’ve uploaded a registry file which will automatically make the change here.

You then need to access the advanced user dialog properties (see my previous article on this if you do not see a tab in Control Panel -> Users & Accounts dialog). Click “Manage Passwords” and then add a new entry. This entry should be the Exchange server’s real name – the name that pops up in your password prompt windows. In my example, in is MAILXXX.mail.lan.

Finally, make sure that the Exchange server’s local name, MAILXXX.mail.lan, is in your hosts file. For most Windows XP folks, this is C:\WINDOWS\system32\drivers\etc\hosts.

The format is:

69.x.x.x MAILXXX.mail.lan

where the real accessible IP address is the first part, and the real Exchange server name is the section part. This allows your PC to locate the “Real” Exchange server name over the internet, even though it is not a real exchange server’s hostname on the internet.