On Exchange server 2010, if you create a distribution group with scope as Universal and type as Distribution, in your domain Active Directory...

And then you enable the mail from creating the mailbox server, then do the testing of email flow from internal and external, especially if you see the following error:

“Technical details of permanent failure: SERVER tried to deliver your message, but it was rejected by the recipient domain. We recommend contacting the other email provider for further information about the cause of this error. The error that the other server returned was: 550 550 5.1.1 User unknown (state 14).”

Please do the following:

From your Active Directory, select the property of the group email id, then under mail flow settings, select Message Delivery Restrictions, and then select Properties… A new window will open.

Uncheck the box which states “Require that all senders are authenticated” and click OK... Then Apply and OK again.

Give it some time to replicate this to the Edge server…


Reference article posted on Prem's blog: http://premnair.wordpress.com/2011/05/23/exchange-2010-distribution-group-email-id-not-able-to-receive-email-from-external-source-solution/