OneDrive Admin Checklist: Known Folder Move fails before setup completes for shared computers

When you configure Known Folder Move on a shared computer, the setup may fail before it completes. This failure often appears as an error message during the initial OneDrive configuration wizard, preventing the redirection of Desktop, Documents, and Pictures folders. The root cause is typically a combination of Windows Group Policy restrictions, OneDrive sync app settings, and user profile permissions on the shared machine. This article explains why the failure occurs and provides an admin checklist to resolve the issue.

Why Known Folder Move Fails Before Setup Completes on Shared Computers

Known Folder Move fails on shared computers because the OneDrive sync app cannot verify the user profile meets the requirements during the initial setup wizard. Shared computers often have restricted user profiles with limited write permissions to the default folder locations. The OneDrive sync app checks for existing folder redirection, file permissions, and disk space before it starts the move. If any check fails, the wizard shows an error and stops the setup.

A common technical cause is the Group Policy setting “Prevent users from moving their known Windows folders to OneDrive” enabled at the local or domain level. This policy overrides tenant-level settings from the Microsoft 365 admin center. On shared computers, administrators sometimes enable this policy to prevent users from changing folder locations, but then later try to enable Known Folder Move without removing the policy. The sync app reads the local policy first and blocks the move before the setup wizard completes.

Another cause is the user profile type. Shared computers often use mandatory or temporary profiles. OneDrive cannot write the folder redirection registry keys to a mandatory profile. The setup wizard detects this and fails with error code 0x80070005 or a generic “Something went wrong” message. The sync app also checks if the target folders are already redirected to a network location. If a previous user redirected the folders to a network drive, the current user sees the failure.

Admin Checklist to Fix Known Folder Move on Shared Computers

Use this checklist to identify and resolve each blocking factor. Perform the steps in the order shown. Each step includes the exact setting to verify or change.

1. Check the tenant-level Known Folder Move setting
   Sign in to the Microsoft 365 admin center. Go to Settings > Org settings > OneDrive > Sync. Under Known Folder Move, ensure the toggle is set to On. If it is Off, no computer can use the feature. Apply the change and wait 15 minutes for propagation.
2. Remove the local Group Policy that blocks Known Folder Move
   On the shared computer, open the Local Group Policy Editor. Navigate to Computer Configuration > Administrative Templates > Windows Components > OneDrive. Find the policy Prevent users from moving their known Windows folders to OneDrive. Set it to Not Configured or Disabled. Run gpupdate /force in an elevated Command Prompt to apply the change.
3. Verify the registry does not override the policy
   Open Registry Editor. Go to HKLM\Software\Policies\Microsoft\Windows\OneDrive. If the key DisableKnownFolderMove exists and has a value of 1, delete the key or set its value to 0. Restart the OneDrive sync app after the change.
4. Confirm the user profile is not mandatory or temporary
   On the shared computer, open System Properties. Click Advanced > User Profiles > Settings. Look at the user profile type. If it shows Mandatory or Temporary, the profile cannot support Known Folder Move. Change the profile to a local roaming profile. To do this, go to Active Directory Users and Computers, open the user properties, and on the Profile tab, clear the Profile path field if it points to a mandatory profile.
5. Check that the default folders are not already redirected
   Open File Explorer. Right-click Desktop, Documents, and Pictures in the navigation pane. Select Properties > Location. If the path shows a network location or a different drive letter, Known Folder Move will fail. Reset each folder to its default location by clicking Restore Default. Apply the change and restart the computer.
6. Ensure the user has write permissions to the target OneDrive folder
   Sign in to the shared computer with the affected user account. Open File Explorer and navigate to %OneDrive% (usually C:\Users\username\OneDrive - CompanyName). Right-click the folder, select Properties > Security. Verify that the user has Full control or at least Modify permissions. If not, add the user with Full control permissions.
7. Check for disk space on the system drive
   Known Folder Move requires at least 1 GB of free space on the drive where the OneDrive folder resides. Open File Explorer, right-click the system drive, and select Properties. If free space is below 1 GB, free up space by running Disk Cleanup or moving large files.
8. Run the OneDrive sync app diagnostic tool
   Press Windows + R, type %localappdata%\Microsoft\OneDrive\OneDrive.exe /reset, and press Enter. This resets the OneDrive sync app without deleting files. After the reset, sign in again and retry Known Folder Move. If the error persists, run %localappdata%\Microsoft\OneDrive\OneDrive.exe /restart to restart the sync app.

If Known Folder Move Still Fails After the Checklist

Some shared computers have additional restrictions that the checklist does not cover. Use the following steps to diagnose and fix these edge cases.

OneDrive shows error 0x8004de40

This error occurs when the user account is not licensed for OneDrive. Verify the user has a valid Microsoft 365 license that includes OneDrive. In the Microsoft 365 admin center, go to Users > Active users, select the user, and check the Licenses and apps tab. Ensure OneDrive for Business is enabled.

Known Folder Move starts but rolls back after a few seconds

This happens when a file with a long path or a special character is in the Desktop, Documents, or Pictures folder. Open each folder and look for files with paths longer than 256 characters or names that include characters like ?, , or <. Move or rename these files. Then retry Known Folder Move.

OneDrive sync app silently ignores Known Folder Move setting

This indicates the user is signed in with a personal Microsoft account instead of a work or school account. Open OneDrive settings by right-clicking the OneDrive icon in the system tray and selecting Settings > Account. If the account shows an @outlook.com or @live.com domain, click Add an account and sign in with the work or school account. Remove the personal account after the work account is set up.

Known Folder Move vs Manual Folder Redirection on Shared Computers

Item	Known Folder Move	Manual Folder Redirection
Setup method	OneDrive sync app wizard	Group Policy or Folder Properties dialog
User interaction required	User clicks through wizard	Admin configures policy or user edits folder location
Automatic backup to OneDrive	Yes, files sync to OneDrive cloud	No, unless you also configure Folder Redirection with Offline Files
Works on shared computers	Only with local roaming profiles	Yes, with any profile type
Supports mandatory profiles	No	Yes, if profile path is set to a network share
Recovery after user switch	Each user must set up individually	Same policy applies to all users

After completing the checklist, Known Folder Move should complete the setup wizard without errors. The key settings to verify are the tenant-level toggle, the local Group Policy, and the user profile type. For shared computers that still fail, consider using manual Folder Redirection via Group Policy as a fallback. An advanced tip is to deploy a PowerShell script that runs at user logon to check for the blocking registry key and remove it automatically before OneDrive starts.