Is the authentication method in Account Settings OAuth2 or 'normal password', for incoming and outgoing?

The authentication method is 'normal password'.

When I try to get new messages I get the following error msg:Login to server outlook.office365.com with username xxxxx@xxx.org failed. I have x'ed out actual email address for this message. The previous version connect to my Office365 IMAP account and worked fine. I made no changes to my configuration. I can send emails using smtp.office356.com OK.

I ran into this exact same problem this morning!

Here are some more weird details.

This is for my company email, which is hosted at Microsoft. I've been using the older imap-mail.outlook.com and smtp-mail.outlook.com servers, which have worked perfectly well (with maybe an occasional hiccup) for years.

1. since I have 2FA enabled, I use an app password for both servers.
2. before I realized that my other Thunderbird instance (on a separate PC, connecting to the same servers with the exact same app password and configuration) still worked fine, I created a new app password and tried it -- it still fails like the old one did.
3. to re-iterate: the old app password works both for sending and receiving on the other Thunderbird client. The only thing I see different about that one (they're both 102.4.0) is that the working one is 32-bit and the non-working one is 64-bit.
4. I have deleted the saved passwords, completely shutdown Thunderbird and restarted and re-entered the app password only to continue to get the 'Login to server imap-mail.outlook.com with username x@x.x failed.' message.

This is especially confusing to me since another Thunderbird 102.4.0 instance running on another Windows 10 PC with everything else configured exactly the same works fine.

Any ideas for help?

Rolling back to 102.3.3 shows what appears to be the exact same behavior -- known good app passwords still do not work.

Before I updated to 104.4.0 I was OK. I don't remember what version I was on before, but it was 102.?.?.

UPDATE: that second Windows 10 PC with the 32-bit version of Thunderbird just stopped working with the same error message. It's interesting though that it was definitely working for a period of hours *after* the first PC stopped.

Try changing the authentication on the incoming and outgoing to OAuth2, check that cookies are accepted in Settings/Privacy & Security, restart TB, and see if a browser-like window appears asking to enter your account (not app) password to allow TB access, just as it does with gmail, yahoo and AOL accounts.

Thanks sfhowes! This seems to work to resolve my issue too.

Out of curiosity, what do you think happened to trigger this? Some change in security requirements at Microsoft?

Yes, I think MS recently imposed 'modern authentication' on O365 accounts. I expect the change will soon come to consumer outlook.com accounts.

https://learn.microsoft.com/en-us/exchange/clients-and-mobile-in-exchange-online/deprecation-of-basic-authentication-exchange-online