Published: June 2026. Source: AdminDroid - Microsoft 365 Sensitivity Labels in the Sharing Dialog
Microsoft has added sensitivity label information to the SharePoint Online and OneDrive for Business sharing dialogs. When a user clicks the share button on a labeled document, the label name and its description now appear directly in the sharing UI before access is granted. The change affects all modern SharePoint document libraries and OneDrive for Business accounts across Microsoft 365 tenants that have sensitivity labels enabled.
What Changed in the Sharing Dialog
Previously, a user sharing a labeled file saw no indication of the document's classification inside the sharing dialog itself. The label might be visible as a watermark in the document body or in the file's property panel, but the sharing picker gave no label context at the moment of sending access.
The updated experience adds a label indicator to the sharing dialog panel. Users see the sensitivity label name (for example, Confidential or Internal Use Only) alongside the label description the administrator configured in Microsoft Purview. The description text is exactly what admins set when creating or editing the label in the Purview compliance portal, which means the quality of what users see depends directly on how descriptive those labels have been written.
"When sharing a labeled document in OneDrive or SharePoint, the sensitivity label's name and description are displayed in the sharing dialog. As a result, people who are sharing can ensure what type of file they are attempting to share." - Microsoft / AdminDroid
The change does not restrict what the user can do. If the label's policy permits external sharing, the user can still send the link. The dialog update is informational: it surfaces the classification so the person sharing makes an informed choice rather than an accidental one.
What This Means for SharePoint Admins
The practical impact splits into two areas: governance and label quality.
Governance benefit. Displaying the label in the sharing dialog creates a visible friction point for high-classification documents. A user about to share a file marked Highly Confidential with an external guest now sees that classification explicitly before completing the share. This does not replace DLP policies or label-based sharing restrictions, but it adds a moment of user awareness that reduces accidental oversharing of protected content.
Label description quality. The description shown to users comes directly from the label configuration in Microsoft Purview. Labels with vague or missing descriptions will display unhelpful text at the critical moment. If your organisation has labels configured with placeholder descriptions or none at all, this is a good time to audit them. A description such as "For internal use within [Organisation]. Do not share externally without approval from your manager." gives users genuine guidance. "Internal" does not.
Admins managing Microsoft 365 tenants should also note that this change makes label names more visible to end users than they may have been before. If your label taxonomy includes internal codenames or compliance terminology that users find confusing, consider whether the label names themselves need plain-language revision before this becomes the norm across your tenant.
Three Steps to Prepare Your Tenant
- Audit your active sensitivity labels. In the Microsoft Purview compliance portal, review the name and description of each published label. Confirm descriptions are written in plain language that a non-technical employee would understand in a sharing context. Update any that are missing or vague.
- Review which files carry labels. If your organisation uses auto-labelling policies, run a content search to understand how widely labels are applied across SharePoint. A broad label footprint means many sharing dialogs will now display label information; a narrow footprint means only specific libraries are affected.
- Audit sharing permissions alongside this change. Label visibility in the sharing dialog works best when combined with an accurate picture of who already has access to labeled content. ShareMaster's Shared Links and Permissions tool lets you audit existing shared links and unique permissions across SharePoint Online, so you can identify labeled documents that are already widely shared before this change adds new label awareness at the moment of future shares.
Frequently Asked Questions
What are sensitivity labels in Microsoft 365?
Sensitivity labels are classifications defined in Microsoft Purview that admins apply to documents, emails, and SharePoint sites to enforce protection settings such as encryption, watermarking, and external sharing restrictions. Labels are configured centrally and can be applied manually by users or automatically by policy.
How does this change affect SharePoint file sharing?
When a user clicks share on a labeled document in SharePoint Online or OneDrive for Business, the sharing dialog now displays the label name and description before access is sent. The user sees the classification at the point of sharing, reducing the chance of accidentally distributing confidential content to an inappropriate audience.
Do all Microsoft 365 subscriptions support sensitivity labels in SharePoint?
Sensitivity labels for files in SharePoint and OneDrive require Microsoft 365 E3 or higher, or Microsoft 365 Business Premium. Plans below this tier do not include the Microsoft Purview Information Protection capabilities needed to configure and enforce sensitivity labels on SharePoint content.
Source: AdminDroid - Microsoft 365 Sensitivity Labels in the Sharing Dialog. Label configuration reference: Microsoft Learn - Enable sensitivity labels for files in SharePoint and OneDrive.
Audit shared links across your SharePoint tenant to understand your current sharing posture alongside this update.