OneDrive for Business Known Folder Move fails before setup completes for domain profile migrations: Fix Guide

When you migrate user profiles from one domain to another and then try to enable OneDrive for Business Known Folder Move, the setup often fails before it finishes. The error typically appears as a red X on the OneDrive icon or a message that Known Folder Move cannot complete. This happens because Windows user profile paths have changed during the domain migration, and OneDrive cannot find the original folder locations. This article explains the exact cause of the failure and provides a step-by-step fix to complete Known Folder Move for migrated profiles.

Why Known Folder Move Fails After Domain Profile Migration

Known Folder Move relies on the Windows shell folder paths stored in the registry under HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\User Shell Folders. When you migrate a user profile from one domain to another, the user’s SID and profile path change. The old folder locations (Desktop, Documents, Pictures) are no longer valid. OneDrive checks these registry keys during setup and sees the new default paths, which point to empty folders on the new profile. Because the actual files are still in the old profile folder, OneDrive reports that Known Folder Move cannot complete.

Additionally, OneDrive stores a set of known folder identifiers in its own registry key under HKCU\Software\Microsoft\OneDrive\Accounts\Business1. If the previous Known Folder Move attempt partially wrote data there, the new attempt fails because OneDrive thinks the move is already in progress or completed. The stale entries block the setup from running again.

A third factor is the Group Policy setting for Known Folder Move. If the policy is configured at the domain level, it may apply the old tenant ID or folder mapping, which does not match the new domain environment. This causes the setup to abort before the user can complete the process.

Steps to Fix Known Folder Move for Migrated Profiles

Follow these steps in order. Do not skip any step. Perform all actions while signed in as the affected user on the migrated machine.

1. Close OneDrive completely
   Right-click the OneDrive cloud icon in the system tray and select Pause syncing. Then right-click again and choose Settings. On the Account tab, click Unlink this PC. Confirm the unlinking. This clears the current OneDrive session and prevents conflicts.
2. Remove stale registry entries from OneDrive
   Press Windows + R, type regedit, and press Enter. Navigate to HKEY_CURRENT_USER\Software\Microsoft\OneDrive\Accounts\Business1. In the right pane, look for any value named KnownFolderMoveState, KfmMoveRequiredState, or KfmNewFolderPath. Right-click each and select Delete. Do not delete the entire Business1 key — only the values that reference known folder move states.
3. Reset Windows shell folder paths to current profile
   In the same Registry Editor window, navigate to HKEY_CURRENT_USER\Software\Microsoft\Windows\CurrentVersion\Explorer\User Shell Folders. Verify that the entries for Desktop, Personal (Documents), and My Pictures point to the correct paths under the new profile folder (for example, C:\Users\username\Desktop). If any path still references the old domain profile folder, double-click the value and change it to the current profile path. Repeat for all three folders.
4. Copy files from the old profile to the new profile
   Open File Explorer and navigate to the old profile folder (typically C:\Users\old_domain.username). Copy the contents of Desktop, Documents, and Pictures to the corresponding folders in the new profile (C:\Users\new_username). If you are certain the files are already present in the new profile, skip this step. This step ensures that Known Folder Move has files to move and that no data is lost.
5. Launch OneDrive and sign in again
   Open OneDrive from the Start menu or by searching for OneDrive. Sign in with the user’s Microsoft 365 account. Complete the initial setup. After the sync folder is configured, click the OneDrive cloud icon, select Settings, go to Sync and backup, and click Manage backup. You should now see the option to turn on backup for Desktop, Documents, and Pictures. Select the folders and click Start backup.
6. Verify Known Folder Move completes
   After the backup starts, open File Explorer and navigate to your OneDrive folder. You should see new shortcuts or folders named Desktop, Documents, and Pictures. Wait for the sync status to show a green checkmark on all files. If the process still fails, proceed to the next section.

If Known Folder Move Still Fails After the Main Fix

OneDrive Shows “We can’t move your folders” error

This error typically indicates that the Group Policy for Known Folder Move is blocking the user from completing the setup. Open the Group Policy Management Console on a domain controller and check the policy located at Computer Configuration > Administrative Templates > OneDrive > Silently move Windows known folders to OneDrive. Ensure the policy is set to Enabled and that the tenant ID matches the current Microsoft 365 tenant. If the policy uses the old tenant ID, update it and run gpupdate /force on the affected machine.

OneDrive shows a red X on all synced folders after migration

A red X means the sync engine cannot reach the server or the local folder paths are invalid. First, check the sync status by clicking the OneDrive icon and selecting View sync problems. If the error says “Folder path not found,” repeat steps 2 and 3 from the main fix. If the error says “Access denied,” the user may not have the correct permissions on the OneDrive site. Verify that the user is assigned a license and that the OneDrive site is provisioned in the Microsoft 365 admin center.

Known Folder Move was already configured before migration and now fails

If Known Folder Move was enabled on the old domain profile, the files are already in OneDrive. After migration, OneDrive tries to move the new local folders to the same OneDrive location, which causes a conflict because the folders already exist. To fix this, temporarily disable the Known Folder Move policy, unlink and relink OneDrive, and then re-enable the policy. The user will be prompted to merge the local folders with the existing OneDrive folders.

Known Folder Move Before vs After Domain Migration: Key Differences

Item	Before Domain Migration	After Domain Migration
User profile path	C:\Users\old_domain.username	C:\Users\new_username
Shell folder registry entries	Point to old profile folder	Point to new profile folder
OneDrive KFM state in registry	Empty or clean	May contain stale entries from previous attempt
Group Policy tenant ID	Matches current tenant	May still reference old domain tenant
Result of enabling KFM	Completes normally	Fails with “We can’t move your folders” or red X

After reading this article, you can fix Known Folder Move failures caused by domain profile migrations by cleaning registry entries and resetting folder paths. Next, verify that the Group Policy for Known Folder Move uses the correct tenant ID. As an advanced tip, use the OneDrive ADMX templates to pre-configure the Silently move Windows known folders to OneDrive policy with the tenant ID before migration to avoid this issue entirely.