How to Set Default OneDrive Storage for New Users

When you add new users to your Microsoft 365 tenant, each user automatically receives the default OneDrive storage quota assigned to your subscription. For many organizations, this default quota is 1 TB per user, but you may need to increase or decrease that amount to align with company policies or budget limits. Changing the default storage for new users prevents you from manually adjusting each account after creation. This article explains how to set the default OneDrive storage quota for new users using the Microsoft 365 admin center and Windows PowerShell.

Understanding the Default OneDrive Storage Quota

Every new user in your Microsoft 365 tenant receives a OneDrive account when they first sign in to OneDrive. The storage quota for that account is determined by the tenant-level default setting. Microsoft 365 Business Basic, Business Standard, and Business Premium subscriptions include a default 1 TB quota per user. Enterprise plans such as Microsoft 365 E3 and E5 also start at 1 TB but can be increased up to 5 TB per user with additional storage licenses or admin adjustment.

The default quota applies only to users who have never signed in to OneDrive. Existing users retain their current quota even if you change the tenant default. To change storage for active users, you must modify each account individually or use PowerShell to bulk update.

The storage limit is measured in megabytes (MB) when using PowerShell. 1 TB equals 1,048,576 MB. The minimum quota you can set is 1 MB, and the maximum depends on your subscription. For most business plans, the maximum is 5 TB per user, but some legacy plans may cap at 1 TB.

Steps to Set the Default OneDrive Storage Quota in the Admin Center

The Microsoft 365 admin center provides a graphical interface to change the default storage quota. This method does not require PowerShell and works for all administrators with global admin or SharePoint admin permissions.

1. Sign in to the Microsoft 365 admin center
   Open a browser and go to admin.microsoft.com. Sign in with an account that has either the Global Administrator or SharePoint Administrator role.
2. Navigate to the OneDrive settings
   In the left navigation panel, select Organization under the Settings group. Then click the OneDrive tab at the top of the page.
3. Locate the Storage limit setting
   Scroll down to the Storage limit section. The current default value is displayed in gigabytes or terabytes.
4. Enter the new storage limit
   Type the desired quota value in the input box. You can enter a value from 1 GB to 5,000 GB (5 TB). For example, to set a 500 GB default, type 500.
5. Save the change
   Click Save at the bottom of the page. The new default quota takes effect immediately for any user who signs in to OneDrive for the first time after this change.

Steps to Set the Default OneDrive Storage Quota Using PowerShell

Windows PowerShell with the SharePoint Online Management Shell module gives you more control and allows scripting for bulk operations. This method is faster when you need to set the same quota across multiple tenants or automate the process.

1. Install the SharePoint Online Management Shell
   Open Windows PowerShell as an administrator and run: Install-Module -Name Microsoft.Online.SharePoint.PowerShell. If prompted, confirm the installation from PSGallery.
2. Connect to SharePoint Online
   Run Connect-SPOService -Url https://yourtenant-admin.sharepoint.com. Replace yourtenant with your actual tenant name. Sign in with your global admin or SharePoint admin credentials.
3. Check the current tenant storage quota
   Run Get-SPOTenant | Select OneDriveStorageQuota. The output shows the current default quota in megabytes.
4. Set the new default storage quota
   Run Set-SPOTenant -OneDriveStorageQuota 524288 to set the quota to 512 GB (524,288 MB). Replace the number with your desired value in megabytes. The minimum is 1 MB, and the maximum is 5,242,880 MB (5 TB).
5. Verify the change
   Run Get-SPOTenant | Select OneDriveStorageQuota again to confirm the new value is applied.

Common Mistakes and Limitations

Default quota does not affect existing users

Changing the default storage quota only applies to users who have never signed in to OneDrive. Users who already have a OneDrive account retain their current quota. To update storage for existing users, use the Set-SPOSite -Identity -StorageQuota command or modify each user in the admin center.

Storage quota limit depends on subscription

Not all subscriptions support 5 TB per user. Microsoft 365 Business Basic and Standard cap at 1 TB. Enterprise E3 and E5 allow up to 5 TB. If you set a value above your subscription limit, the system may silently revert to the maximum allowed or display an error when the user tries to exceed the limit.

PowerShell module version mismatch

Older versions of the SharePoint Online Management Shell may not support the OneDriveStorageQuota parameter. Update the module by running Update-Module -Name Microsoft.Online.SharePoint.PowerShell before attempting to change the quota.

Default Storage Quota vs Individual User Quota: Key Differences

Item	Default Storage Quota	Individual User Quota
Definition	Storage limit applied to new OneDrive accounts at first sign-in	Storage limit assigned to a specific user, overriding the default
Scope	All new users in the tenant	One specific user account
Modification method	Admin center or Set-SPOTenant	Admin center user properties or Set-SPOSite
Affects existing users	No	Yes, immediately
Maximum value	Depends on subscription (1 TB to 5 TB)	Same as default maximum for the tenant

After you set the default OneDrive storage quota, new users will automatically receive that limit when they first access OneDrive. To verify the setting, create a test user in your tenant and sign in to OneDrive to check the available storage. For precise control over individual users, combine the default quota with PowerShell scripts that adjust storage for specific departments or roles. The Set-SPOSite command lets you change storage for a single user without affecting the tenant default.