Office 365 apps show unlicensed message despite active subscription

Hi Callihan Memory

Thank you for reaching out to Microsoft Q&A forum

From what you are describing, your situation typically occurs when the local activation token or identity cache becomes corrupted, or when the device cannot validate the license with Microsoft’s activation services. Even if the subscription is active, Office relies on cached credentials and connectivity to specific endpoints. Other common triggers include recent password changes, group-based licensing delays, or network restrictions (e.g., proxy or SSL inspection) that block token refresh.

Therefore, you can try the following approaches to see if your issue can be resolved:

1.Confirm the right license and service plans are actually active for you

In some situation, even when a subscription is visible, users can still be impacted by a disabled service plan or group‑based licensing errors.

1. In the Microsoft 365 admin center:
   • Open Billing ➜ Licenses, select your SKU (e.g., Microsoft 365 Apps for enterprise), and verify your user appears under Assigned users and that Apps & services for Office are On. If you use group‑based licensing, check the Groups tab and the Actions needed list; reprocess the assignment if errors appear, or resolve conflicts (e.g., overlapping plans).
2. If your org uses reporting, the Office Activations usage report can quickly show whether your account has activations on any device and help identify accounts that never successfully activated.

2.Clear local identity and licensing cache

• Sign out of all Office apps and close related processes.
• Remove cached credentials from Windows Credential Manager.
• Delete folders under:
  • %localappdata%\Microsoft\Office\16.0\Licensing
  • %localappdata%\Microsoft\IdentityCache
  • %localappdata%\Microsoft\Office\TokenBroker
• Sign back in with the licensed account to refresh activation tokens.

3.Verify Network Connectivity to Microsoft 365 Endpoints

Ensure the device can reach Microsoft activation services (no proxy or SSL inspection blocking) or Test activation on a different network (e.g., mobile hotspot) to rule out corporate firewall issues. If activation works externally, add proxy bypass rules for Microsoft identity endpoints.
Link references:

https://v4.hkg1.meaqua.org/en-us/troubleshoot/microsoft-365-apps/activation/unlicensed-product-error

https://v4.hkg1.meaqua.org/en-us/troubleshoot/microsoft-365-apps/activation/reset-office-365-proplus-activation-state

https://v4.hkg1.meaqua.org/en-us/troubleshoot/microsoft-365/admin/miscellaneous/assistant-reset-office-activation

Hope my answer will help you, for any further concern, kindly let me know in the comment section

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