I've been having this trouble for the last 6 days. The problem seems to stump MSFT support. We've gone back and forth on a number of attempts to fix the issue. I will list all the things we have tried including the remarkably low-tech final step that seems
to have worked.
- Obviously ensure updated to latest version (Outlook / Help / Check for latest updates)
- Delete account from Outlook that is having the problem (Outlook / Tools / Accounts / Minus sign at lower left)
- Remove the history of passwords from Apple's Keychain (Finder / Applications / Utilities / Keychain Access - search for entries with "exchange" and delete)
- Add new account (bring back the one you just removed) (Outlook / Tools / Accounts / Plus sign at lower left)
Now here is what we did last that seems to be working:
- Go to the online portal for Exchange.
- Create a NEW password for the effected account (Gear symbol in the upper right corner of the page / Office 365 Settings / Password).
- Go back to Outlook to manually enter a password for the account (Outlook / Tools / Accounts - select the effected account). You should have a window with a space to enter the password.
- Enter a WRONG password... make up anything.
- Close that Accounts window
- Go back to Outlook and wait for it to give you that dreaded pop-up message asking for your password.
- Click YES and enter the new password you just created in the portal.
The above worked for me... I'm not technical so I don't know implications of what I'm sharing... follow at your own risk.
** UPDATE **
As it turns out, this did not solve the problem for me. But because it was a step MSFT support thought worth trying I'll leave this up for others in case it works for you...