E3 Email Encryption: Setup & Use Office 365 to Protect Emails

Email remains the backbone of business communication, but it’s also a major security risk. Whether you’re sending financial documents, client records, or internal strategy memos, email is a prime target for interception and data leakage.

With Microsoft 365 E3, you can enable Office 365 Message Encryption (OME) a powerful, policy-driven solution that helps you protect sensitive communications without disrupting productivity. It combines native usability with compliance-grade security, making encrypted email accessible to organizations of all sizes.

This post explores how E3 users can configure, automate, and use Office 365 encryption to ensure confidentiality and regulatory compliance.

Table of Contents

Why Email Encryption Matters More Than Ever

From business contracts to employee information, email often contains data covered by:

  • GDPR
  • HIPAA
  • PCI-DSS
  • SOX
  • Internal governance policies


Unencrypted email can be intercepted at various stages of delivery. Without protection, a misdirected email or an intercepted message could lead to costly breaches, fines, or reputational damage.

Office 365 encryption, built into Microsoft 365 E3, ensures that only the intended recipient can access message content, no matter where or how it’s delivered.

What Is Office 365 Message Encryption (OME)?

Office 365 Message Encryption (OME) is a cloud-based email encryption solution that integrates with Exchange Online. It uses Microsoft Purview Information Protection (formerly Azure Information Protection) and Microsoft Entra to apply protection automatically based on content or policy.

With OME, you can:

  • Encrypt emails on send and decrypt them on receipt
  • Let external recipients view encrypted messages securely via a web portal
  • Add Do Not Forward or View-Only restrictions
  • Control access without requiring the recipient to have Microsoft 365
  • Trigger encryption using sensitivity labels, keywords, or DLP rules


It’s a seamless way to bring confidentiality, compliance, and control to your communications.

OME in Microsoft 365 E3: What’s Included?

With an E3 license, your organization gains:

  • Rights Management Services (RMS) via Microsoft Purview
  • Support for email encryption, message restrictions, and revocation
  • Integration with Exchange mail flow rules (transport rules)
  • Compatibility with Outlook desktop, web, and mobile apps
  • Unified experience with sensitivity labels and content classification


Unlike third-party plugins, OME in Microsoft 365 E3 is built in, user-friendly, and managed through the same compliance and security center.

How to Set Up OME in Microsoft 365 E3

Here’s a basic guide to enabling and configuring Office 365 encryption in your E3 tenant:

1. Activate Microsoft Purview Information Protection

Ensure that your tenant has Purview rights management activated. This enables encryption policies and labeling features.

2. Create a Mail Flow Rule

In the Exchange Admin Center:

  • Navigate to Mail flow > Rules
  • Click + Add a rule
  • Choose conditions (e.g., subject includes “Confidential” or recipient is external)
  • Under Do the following, select Modify the message security > Apply Office 365 Message Encryption

3. Use Sensitivity Labels (Optional)

Create a label like “Encrypt – External Only” in the Microsoft Purview Compliance Center, and publish it to users. This lets users manually select encryption when composing sensitive emails.

4. Train End Users

Educate staff on when and how to apply encryption:

  • In Outlook, they can click Options > Encrypt
  • Or simply apply a sensitivity label from the toolbar
  • Outlook mobile apps also support this functionality

5. Test with External Recipients

Send encrypted messages to Gmail or Yahoo users. They will receive a branded Microsoft message with a link to view the secure content via browser authentication.

What Recipients See: External User Experience

When an external recipient gets an encrypted message, they’ll be guided to:

  • Open a secure Microsoft link
  • Authenticate using a one-time passcode or sign in with a Microsoft or Google account
  • View the email in a secure browser window


They can reply securely, view attachments, and interact as they would with a normal email, all while your organization maintains full control over the content.

This removes the friction usually associated with encrypted email platforms.

Encryption Triggers: Automate or Let Users Choose

There are two primary ways to apply OME:

Manual Triggers via Outlook UI

  • Staff choose to encrypt based on context
  • Use of the Encrypt button or a sensitivity label

Automatic Encryption via Policies

  • Admins configure rules or DLP policies to automatically apply OME
  • Common triggers include:
    • Messages to external domains
    • Emails with keywords like “SSN,” “confidential,” or “payment details”
    • Attachments containing sensitive metadata


Both methods support audit logging and alerting, especially when used with Purview and Defender for Office 365.

Best Practices for Office 365 Email Encryption

To get the most from OME in E3, follow these recommendations:

  1. Define use cases (e.g., HR files, legal correspondence, medical reports)
  2. Create clear encryption policies using mail flow rules or labels
  3. Train users on when and how to apply encryption manually
  4. Monitor encrypted traffic using Purview compliance logs
  5. Ensure mobile device compatibility via Outlook for iOS/Android
  6. Test external delivery to confirm experience and branding


By integrating email encryption into everyday workflows, you increase adoption without burdening your staff.

Common Use Cases by Industry

Legal
Send case details or contracts with “Do Not Forward” restrictions to clients or external counsel.

Finance
Protect spreadsheets with PII or financial forecasting before sending to vendors or banks.

Healthcare
Ensure emails that include medical records or referrals comply with HIPAA by encrypting messages by default.

Government & Public Sector
Transmit internal documents securely between departments or to citizens using OME with public email providers.

Final Thoughts

With Microsoft 365 E3, organizations don’t need to rely on expensive, third-party email security platforms. Office 365 encryption is already included, ready to be deployed and scaled across your business.

By using Office 365 Message Encryption (OME) alongside Purview and Exchange rules, you can secure sensitive communications, streamline compliance, and boost user trust without sacrificing productivity or ease of use.

Ready to Secure Your Email with Office 365 Encryption?

Get started with Microsoft 365 E3 and deploy OME for encrypted email that protects sensitive data and aligns with modern compliance demands. Simple. Effective. Built for your business.

Stay tuned to our blog for more insights and tips.

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