OneDrive for Business Known Folder Move troubleshooting for shared computers: fails before setup completes

On a shared computer in an enterprise environment, Known Folder Move setup fails before the initial configuration completes. The error appears during the OneDrive setup wizard, often with a generic message that the operation could not finish. This failure typically occurs because of Group Policy restrictions, missing prerequisites, or conflicts with existing folder redirection settings. This article explains the root causes and provides step-by-step fixes to get Known Folder Move working on shared machines.

Why Known Folder Move Fails Before Setup Completes on Shared Computers

Known Folder Move fails during the initial setup on a shared computer when the OneDrive sync client encounters a condition it cannot resolve. The most common cause is a conflict between the existing Windows folder redirection set by Group Policy and the new redirection that Known Folder Move attempts to create. On shared computers, administrators often use Group Policy to redirect the Desktop, Documents, and Pictures folders to a network location. OneDrive detects this existing redirection and stops the setup process because it cannot safely override the policy-controlled paths.

Another frequent cause is that the required registry keys for Known Folder Move are missing or incorrectly configured. The OneDrive client checks for specific registry values under HKLM\Software\Policies\Microsoft\OneDrive to determine if the feature is enabled. If these keys are absent or set to block the feature, the wizard fails before it can ask the user to select folders. Additionally, on shared computers where multiple users log in, the OneDrive setup may try to apply settings from a cached profile that conflicts with the current user’s permissions.

Network latency or a slow connection to the Microsoft 365 tenant can also cause the setup to time out. The OneDrive client must verify the user’s license and tenant policy during the setup. If the verification call fails or takes too long, the wizard aborts the Known Folder Move step. Finally, if the user does not have a OneDrive for Business license assigned, or if the tenant has not enabled Known Folder Move in the SharePoint admin center, the setup will fail silently.

Steps to Fix Known Folder Move Setup Failure on Shared Computers

Follow these steps in order. After each step, restart the OneDrive setup to check if the issue is resolved.

Step 1: Verify Tenant and User Licensing

1. Open the Microsoft 365 admin center
   Go to admin.microsoft.com and sign in with a Global Admin or SharePoint Admin account. Navigate to Settings > Org settings > OneDrive.
2. Check Known Folder Move policy
   Under the Sync tab, ensure the option Show the Known Folder Move prompt to users is set to Enabled. Also confirm that Allow users to sync OneDrive accounts across multiple devices is turned on.
3. Verify user license
   Go to Users > Active users, select the affected user, and check that they have a OneDrive for Business license assigned. The license must include SharePoint Online.

Step 2: Remove Existing Folder Redirection Group Policy

1. Open Group Policy Management Console
   On a domain controller or admin workstation, open the Group Policy Management Console. Locate the GPO that applies to the shared computer.
2. Edit Folder Redirection settings
   Navigate to User Configuration > Policies > Windows Settings > Folder Redirection. Right-click each folder (Desktop, Documents, Pictures) and select Properties. Set the Setting to Not Configured. Click OK.
3. Force Group Policy update
   On the shared computer, open a command prompt as Administrator and run gpupdate /force. Restart the computer.

Step 3: Configure OneDrive Group Policies Correctly

1. Open the GPO that targets the shared computer
   In the Group Policy Management Console, edit the GPO. Navigate to Computer Configuration > Administrative Templates > OneDrive.
2. Enable Known Folder Move policies
   Set the following policies:
   – Silently move Windows known folders to OneDrive set to Enabled.
   – Prevent users from moving Windows known folders set to Disabled or Not Configured.
   – Prompt users to move Windows known folders set to Enabled.
3. Force Group Policy update
   On the shared computer, run gpupdate /force and restart.

Step 4: Reset OneDrive and Clear Existing Setup State

1. Close OneDrive completely
   Right-click the OneDrive cloud icon in the system tray and select Close OneDrive. If the icon is not visible, open Task Manager, find Microsoft OneDrive, and end the task.
2. Run the OneDrive reset command
   Press Windows Key + R, type %localappdata%\Microsoft\OneDrive\onedrive.exe /reset, and press Enter. Wait for the reset to complete. If the reset fails, run %localappdata%\Microsoft\OneDrive\Update\OneDriveSetup.exe /uninstall first, then reinstall from onedrive.com/download.
3. Delete cached OneDrive settings
   Open File Explorer and navigate to %localappdata%\Microsoft\OneDrive\settings. Delete all files in this folder. Then navigate to %appdata%\Microsoft\OneDrive\settings and delete all files there as well.
4. Restart OneDrive and sign in again
   Run OneDrive from the Start menu. Sign in with the affected user account. When the setup wizard appears, select Next and check if the Known Folder Move prompt appears.

Step 5: Manually Register the Known Folder Move Registry Keys

1. Open Registry Editor
   Press Windows Key + R, type regedit, and press Enter. Navigate to HKEY_LOCAL_MACHINE\SOFTWARE\Policies\Microsoft\OneDrive.
2. Create or modify the KFM keys
   If the OneDrive key does not exist, right-click Microsoft, select New > Key, and name it OneDrive. Inside the OneDrive key, create the following DWORD (32-bit) values:
   – KFMOptInWithWizard set to 1
   – DisableKFM set to 0
   – SilentAccountConfig set to 1
3. Restart the computer
   Close Registry Editor and restart the shared computer. After the restart, open OneDrive and attempt the Known Folder Move setup again.

If OneDrive Still Has Issues After the Main Fix

OneDrive setup wizard does not show the Known Folder Move prompt at all

This usually means the tenant policy is not applied to the user, or the user is on a delayed release ring. Check the user’s Microsoft 365 release preferences in the admin center. Set the user to Standard release to get the latest OneDrive features. Also verify that the OneDrive sync app is version 19.086 or later, as older versions do not support Known Folder Move.

Known Folder Move starts but fails with error 0x80070005 (Access Denied)

This error indicates that the user does not have write permissions to the target folder in OneDrive, or that the local folder is protected by system permissions. Temporarily disable any third-party security software that might be blocking OneDrive. Also ensure the user is a local administrator on the shared computer, or grant full control to the user’s local Desktop, Documents, and Pictures folders.

Known Folder Move fails silently after a reboot

This happens when the OneDrive sync client attempts to resume a previous setup that was interrupted. Clear the OneDrive credential manager entries. Open Control Panel > Credential Manager > Windows Credentials. Remove any entries that contain OneDrive or MicrosoftOffice16. Then restart OneDrive and start the setup from scratch.

Known Folder Move on Shared Computers vs Personal Devices: Key Differences

Item	Shared Computer	Personal Device
Group Policy impact	GPOs often block or override KFM settings	GPOs are rarely applied
Folder redirection conflict	Existing redirection to network shares blocks KFM	No pre-existing redirection
User profile persistence	KFM settings may be lost after user logs off	Settings persist across sessions
OneDrive setup experience	Wizard must complete quickly before timeout	Wizard can take longer without timeout
Administrator intervention	Required to pre-configure policies and registry	Often not required

After resolving the setup failure, users on a shared computer can redirect their Desktop, Documents, and Pictures folders to OneDrive successfully. Next, verify that sync continues to work after the user logs off and logs back on. For advanced management, consider deploying the OneDrive Group Policy administrative template to enforce Known Folder Move silently across all shared computers in your organization.