Note: When testing on Outlook 2007 this method did not work for me.  By not work I mean anything I do sends the email from the default exchange SMTP account.
The only settings difference I saw is for the Outgoing server encryption. Outlook 2007 has the option TLS or SSL (SSL is the successful setting) and Office 2016 has STARTTLS.
I have not tried other version of Outlook.

So I have a bunch of Aliases (Example)

SMTP all caps is my default address.  smtp all lower case are aliases used for sending or receiving on those accounts.  As you can see I have a lot and I would love if Microsoft would make these available for the user in the from field however at this time that is not a feature.

In these instructions I will use these email examples:

SMTP (Primary Address) smtp (Alias Address)
test@sweetdomain.com test@awesomedomain.com

 

Click here to skip first step if you DON’T have MFA(MultiFactorAuthentication) enabled.  (I recommend you enable it)

App Password Generation

Go to https://portal.office.com
Login as you normally would which should be your primary address (test@sweetdomain.com)
In the right corner click your picture and go to My Account

On the left click Security & Privacy> Additional security verification> Create and manage app passwords

 

Click Here if the Above Picture Doesn't Look Like Yours

Today (09-23-2020) I click My account like normal and Microsoft has changed where to get an app password (this is the 3rd time now).  Click Security Info>Add method:

 

Sorry if this becomes outdated again due to Microsoft changing the interface again. I will try to keep up to date.

Click Here if Additional Security Verification is Missing

(I am going off memory so information may be inaccurate)

I had enabled a policy from this link (I think it was End User Protection):

https://portal.azure.com/#blade/Microsoft_AAD_IAM/ConditionalAccessBlade/Policies

Turns out when doing it that way the additional security feature is not available.  I turned that policy off and instead enabled MFA for users here:

https://account.activedirectory.windowsazure.com/UserManagement/MultifactorVerification.aspx

After you click Create and manage app passwords a page will come up with a blue button that says create
Click Create and a box will come up

Enter a simple name in relation to the account you are setting up then click Next.  For example:

You will then see something like this:

DISCLAIMER: I don’t know why but this password takes 5-10 minutes to finally be “active” and work in outlook.  Basically if Outlook keeps asking for a password but you are sure the password is right then wait 5-10 minutes. (I think on a couple occasions it worked immediately but was pretty rare)

Temporarily keep your generated password for a later.
I recommend a new password for each alias however that may be overkill considering this password is very unlikely to be phished since the end user does not know it.
Also I would not write it down if you loose it simply create another.  Once it is saved in Outlook you don’t need it anymore.

Do what you will at your own discretion.

Now we can finally create the account in Outlook…

Setup POP Account:

Close Outlook and open control panel (Don’t know how? Click the start button and type Control Panel)

Once Control Panel is open in the upper right hand corner type mail in the search box

Double click Mail (Microsoft Outlook 2016) and then click Email Accounts

Now we will setup the secondary sending account.  Click New

Select Manual Setup then click next

Select POP or IMAP and click next

A. Name that will show up for the recipient
B. smtp (Alias Address)
C. Copy these settings

  • Account Type: POP3
  • Incoming mail server: NO
  • Outgoing mail server (SMTP): smtp.office365.com

D. SMTP(primary Address)
E. App Password from earlier if you have MFA enabled. (Office365 login password if NO MFA)
F. CHECK this box
G. UNCHECK this box

Click More Settings when done with those fields

Click the Outgoing Server Tab> My outgoing server requires authentication> Use same settings as my incoming mail server

On the Advanced tab:

  • Outgoing Server: 587
  • Use the following type of encrypted connection: STARTTLS

Click OK

Now click Test Account Settings

If all was entered correctly this should come up

Click on Tasks and you should see a green check for Send test email message  We don’t care about Incoming so the red X is fine there
Click close

Now you can click Next> Finish

Change Default Folder

You need to do this so sent mail from that Alias account goes into your default sent mail folder

Highlight the account you created and click Change Folder

Click the + next to the account that has a small picture of a house

Select Inbox and click OK

Do this for EVERY account you want to send as a smtp(Alias Address)

Now you can select the account you want to send from when creating a new email message

If the from button is not there in a new email go to Options and click the From button

A lot of steps for what seems like such a simple function. 

You will see a cosmetic error at the bottom of Outlook that can be ignored or read on to remove the error.

Also the PST file will still be attached which is also a cosmetic issue but read on to remove it as well.

Remove Cosmetic Send/Receive Error and Attached PST

Open Outlook click the Send/Receive> Send/Receive Groups> Define Send/Receive Groups

Click Edit

On the left select the account in question
UNcheck the Receive mail items check box
Do this for each account needed then click OK> Close

To remove the PST file, on the left scroll down and find the account in question
Right click on the account and go to Data File Properties first

Click Advanced and take note of the file location and name

Cancel out of those boxes, that was only to help you find where the file is located
Next right click on the account and select Close “test@awesomedomain.com” or it may say Remove “test@awesomedomain.com”

Do this for each Alias account.  These PSTs are not needed because we changed the default folder location
Close outlook and go to the filename location from earlier and delete the file