OneDrive for Business Known Folder Move troubleshooting for device refresh projects: fails before setup completes

During a device refresh project, you deploy a new Windows 11 or Windows 10 computer and configure OneDrive to redirect Desktop, Documents, and Pictures folders using Known Folder Move. The setup process starts but fails before it finishes, leaving folders in their default local location. This failure typically occurs because the new device encounters stale registry keys, folder redirection conflicts from a previous Group Policy, or an incomplete OneDrive sync relationship with the tenant.

This article explains the root causes of Known Folder Move failures during device refresh, lists the exact registry and policy checks you must perform, and provides step-by-step fixes for three common failure patterns. You will also learn how to verify that the move completed successfully and what to do if the Known Folder Move prompt never appears.

Why Known Folder Move Fails Before Setup Completes on a Refreshed Device

When you configure a new Windows device as part of a refresh project, OneDrive must establish a sync relationship with the user’s OneDrive for Business account before it can move the known folders. The Known Folder Move process triggers after the user signs in and OneDrive begins syncing. If any of the following conditions exist, the move fails silently or with an error before the setup wizard finishes.

Stale or Duplicate Tenant Registration in the Registry

If the new device was built from a sysprepped image or a disk clone that previously had OneDrive configured for a different tenant or user, the registry key HKCU\Software\Microsoft\OneDrive\Accounts\Business1 may contain a TenantId value that does not match the current user’s tenant. OneDrive reads this key during initial sync setup and refuses to start the Known Folder Move because it detects a tenant mismatch. The symptom is that the Known Folder Move prompt never appears, or it appears and then immediately disappears without moving any folders.

Folder Redirection Conflict from Group Policy

Many organizations deploy Group Policy to redirect the Desktop or Documents folder to a network share or a local path. When OneDrive tries to move the same folder, Windows Folder Redirection takes precedence. OneDrive detects that the folder’s location is already managed by policy and aborts the move. This conflict appears as a silent failure: OneDrive shows the “Your folders are being moved” notification but never completes the operation.

Insufficient OneDrive Version or Sync State

Known Folder Move requires OneDrive build 22.022 or later. Older builds do not include the silent provisioning logic that device refresh scripts rely on. Additionally, if the user’s OneDrive sync status shows “Files On-Demand is disabled” or “Sync is paused,” the Known Folder Move engine will not initiate. The user sees a spinning progress indicator that never finishes.

Steps to Diagnose and Fix Known Folder Move Failure on a New Device

Perform these steps in order on the affected device. Run all commands in an elevated PowerShell window unless otherwise noted. Each step addresses one of the root causes described above.

1. Clear Stale Tenant Registry Keys
   Open Registry Editor as administrator. Navigate to HKEY_CURRENT_USER\Software\Microsoft\OneDrive\Accounts\Business1. If the TenantId value does not match the tenant GUID shown in the Microsoft 365 admin center under Settings > Org settings > OneDrive > Sync, delete the entire Business1 key. Do not delete the Personal key. Close Registry Editor and restart OneDrive by running taskkill /f /im OneDrive.exe then start "" "%localappdata%\Microsoft\OneDrive\OneDrive.exe".
2. Remove Conflicting Folder Redirection Group Policy
   Open a Command Prompt as administrator and run gpresult /h C:\gp_report.html. Open the HTML report and look under Computer Configuration > Administrative Templates > Windows Components > File Explorer for policies named “Redirect Desktop,” “Redirect Documents,” or “Redirect Pictures.” If any are set to Enabled with a target path, contact your domain administrator to disable the policy for the affected user or device. After the policy is removed, run gpupdate /force and restart the device.
3. Update OneDrive to the Latest Build
   Download the latest OneDrive sync app from https://go.microsoft.com/fwlink/p/?linkid=844652. Run the installer with the /silent /allusers switches. After installation, verify the build number by right-clicking the OneDrive cloud icon in the notification area, selecting Settings > About, and confirming the version is 22.022 or later. If the build is still older, uninstall OneDrive from Control Panel, restart the device, and reinstall.
4. Enable Files On-Demand
   Right-click the OneDrive cloud icon and select Settings > Sync and backup > Advanced settings. Under Files On-Demand, ensure the toggle is set to On. If it is off, turn it on, click OK, and wait two minutes for the setting to apply. Known Folder Move will not start while Files On-Demand is disabled.
5. Manually Trigger Known Folder Move
   Right-click the OneDrive cloud icon and select Settings > Sync and backup > Manage backup. Click Start backup next to Desktop, Documents, or Pictures. If the button is grayed out, click Update folders first. Follow the prompts to complete the move. If the move fails again with error code 0x80070005 (access denied), run OneDrive as administrator once: "%localappdata%\Microsoft\OneDrive\OneDrive.exe" from an elevated command prompt, then repeat this step.

If OneDrive Still Has Issues After the Main Fix

OneDrive Shows “Your folder can’t be moved here” with a Red X

This error occurs when the target known folder contains a file or subfolder that exceeds the 250-character path length limit. Navigate to the local folder (for example, C:\Users\username\Documents) and locate any item with a path longer than 250 characters. Move that item to a temporary location outside the known folder, then retry the Known Folder Move from OneDrive settings.

Known Folder Move Prompt Never Appears After Sign-In

If the user signed in to OneDrive but the yellow “Protect your important folders” banner never showed, the DisableKnownFolderMove registry key may be present. Check HKEY_CURRENT_USER\Software\Policies\Microsoft\OneDrive for a DWORD named DisableKnownFolderMove set to 1. If it exists, change the value to 0 or delete the key. Also check HKEY_LOCAL_MACHINE\Software\Policies\Microsoft\OneDrive for the same key. After making the change, restart OneDrive.

Known Folder Move Completes but Folders Still Appear in Local Profile

This happens when the Known Folder Move was interrupted and then resumed. Open File Explorer and navigate to C:\Users\username\OneDrive - TenantName. If the Desktop, Documents, and Pictures folders exist there, the move actually succeeded but the local profile still shows the old folder junction points. To verify, right-click the original Desktop folder in C:\Users\username and select Properties > Location. The path should point to C:\Users\username\OneDrive - TenantName\Desktop. If it does not, click Restore Default and then manually move the folder from the OneDrive location back using the OneDrive settings > Manage backup flow.

Known Folder Move Failure Patterns: New Device vs Existing Device

Item	New Device (Refresh)	Existing Device (In-Place Upgrade)
Root cause	Stale registry keys from cloned image or conflicting Group Policy	Corrupted OneDrive cache or folder junction points
Primary symptom	Known Folder Move prompt never appears or fails silently	Folder move starts but stops at 99% with error 0x8007016A
Fix approach	Clear tenant registry keys, remove folder redirection policy, update OneDrive	Reset OneDrive sync, delete folder junction points, run Known Folder Move again
User data location	Data still in local profile folder before move	Data partially in OneDrive and partially in local profile
Typical resolution time	15–30 minutes	45–60 minutes

After completing the diagnostic steps and fixes above, you can now successfully deploy Known Folder Move on new devices without the setup failure. Next, configure a silent Known Folder Move deployment script using the OneDriveSetup.exe /silent /allusers /configure command combined with the KFM policy setting in the OneDrive ADMX template. An advanced tip: use the Get-OneDriveKnownFolderMoveStatus PowerShell cmdlet from the OneDrive admin module to programmatically verify the move status on every device in your refresh project.