# Set up Microsoft Teams direct routing

> Connect your Microsoft 365 tenant to the PBX so Teams users can make and receive phone calls.

- URL: https://kb.voipcloud.online/teams-and-sip/microsoft-teams/set-up-direct-routing/
- Section: Microsoft Teams and SIP trunking › Microsoft Teams
- Type: guide
- Applies to: All countries
- Last reviewed: 2026-11-09

This guide connects your Microsoft 365 tenant to the PBX, so your Teams users get a dial pad and can make and receive phone calls. Allow about an hour, plus waiting time for Microsoft to activate the domain.

You'll switch between three places: the **Microsoft 365 admin centre**, the portal (**Services** › **Microsoft Teams**, **Direct routing** tab) and **Windows PowerShell**. Keep them open in separate windows.

**Note:** Menus can change between versions. If a label is different, check the vendor's own help. Microsoft renames and moves admin centre menus often: look for the same page under a similar name, or search the admin centre.

## Before you start

- Sign in to Microsoft 365 as a **global administrator**.
- Read [Microsoft Teams direct routing](https://kb.voipcloud.online/teams-and-sip/microsoft-teams/direct-routing-overview/) to choose how Teams will connect in the PBX.
- Have the phone numbers you'll give your Teams users. Each Teams account needs one. Order them in **Services** › **Phone numbers** if needed.

## 1. Give your Teams users the right licence

Each Teams user who will make phone calls needs a licence that includes Microsoft Teams, plus the **Teams Phone Standard** add-on.

1. In the Microsoft 365 admin centre, go to **Users** › **Active users** and click a user.
2. Open the **Licenses and apps** tab and check that **Teams Phone Standard** is ticked.
3. If the licence isn't in the list, buy it: select **Billing** › **Purchase services**, find **Teams Phone Standard** and order one for each user. Then come back and assign it.
4. Click **Save changes**.

![Microsoft 365 active users with the Licenses and apps tab open and the phone licence ticked](https://kb.voipcloud.online/images/teams-and-sip/microsoft-teams/set-up-direct-routing-licences.webp)

Microsoft renames its licences from time to time. The phone add-on has also been called Microsoft 365 Phone Standard and Microsoft 365 Phone System.

Users on an Office 365 E5 or Microsoft 365 E5 plan usually already have the phone add-on.

## 2. Add your PBX domain to Microsoft 365

Your PBX has its own domain name (FQDN) for Microsoft Teams. You add it to Microsoft 365 and prove you own it with a TXT record.

1. In the portal, go to **Services** › **Microsoft Teams** and open the **Direct routing** tab. Under **Microsoft 365 DNS verification**, copy the **Microsoft 365 FQDN address** with the copy icon.

   ![Microsoft 365 DNS verification section with the FQDN address and TXT record fields](https://kb.voipcloud.online/images/teams-and-sip/microsoft-teams/set-up-direct-routing-dns-verification.webp)

2. In the Microsoft 365 admin centre, open the domains page and click **Add domain**. Depending on the admin centre version, it's under **Settings** › **Domains**, or **Setup** › **Get your custom domain set up**.

3. Paste the FQDN and click **Use this domain**.
4. When asked how to verify the domain, choose **Add a TXT record to the domain's DNS records** (you may need to click **More options** first) and click **Continue**.

   ![How do you want to verify your domain, with Add a TXT record selected](https://kb.voipcloud.online/images/teams-and-sip/microsoft-teams/set-up-direct-routing-txt-option.webp)

5. Copy the **TXT value**. Don't click **Verify** yet.

   ![Verify you own this domain page with the TXT value to copy](https://kb.voipcloud.online/images/teams-and-sip/microsoft-teams/set-up-direct-routing-txt-value.webp)

## 3. Add the TXT record and your Teams accounts in the portal

Microsoft can only verify the domain after the TXT record is saved and at least one Teams account is ordered.

1. In the portal, paste the TXT value into **Microsoft 365 TXT record** and click outside the field. The portal saves it and confirms that the TXT record was updated.
2. Under **Microsoft Teams accounts**, click **Add account**. The button only works once the TXT record is filled in.
3. Enter the user's **Microsoft 365 account** (their Teams sign-in email) and choose a **Phone number**. Repeat for each Teams user.
4. Tick **Agree to service terms and conditions** and click **Submit order**.

![Microsoft Teams accounts table with the Add account button](https://kb.voipcloud.online/images/teams-and-sip/microsoft-teams/set-up-direct-routing-teams-accounts.webp)

Each number is statically routed: calls to it go straight to that Teams account. If you also use the number in an [Inbound number](https://kb.voipcloud.online/pbx/receive-calls/inbound-number/) in your call flow, the static routing is turned off and the call flow decides.

## 4. Verify and connect the domain

1. Back in the Microsoft 365 admin centre, click **Verify**.
2. When asked how to connect your domain, choose **Add your own DNS records** (under **More options** if needed) and click **Continue**.

   ![How do you want to connect your domain, with Add your own DNS records selected](https://kb.voipcloud.online/images/teams-and-sip/microsoft-teams/set-up-direct-routing-own-dns-records.webp)

3. Untick every service, including **Exchange and Exchange Online Protection**, and click **Continue**. You don't need any other DNS records.

   ![Add DNS records page with all services unticked](https://kb.voipcloud.online/images/teams-and-sip/microsoft-teams/set-up-direct-routing-untick-services.webp)

4. Click **Done** to finish.

## 5. Activate the domain with a licensed user

Microsoft only activates a new domain once a licensed user has an address on it. Don't skip this step: PowerShell can't create the gateway until the domain is active.

1. Go to **Users** › **Active users** and click **Add a user**.
2. Enter any name, and for **Username** choose the PBX domain (the FQDN) from the drop-down.
3. Click **Next** and assign any licence that includes Microsoft Teams, such as Office 365 E1 or Microsoft 365 Business Basic. It doesn't need the phone add-on.
4. Click **Next** and finish adding the user.

![Add a user with the PBX domain chosen for the username](https://kb.voipcloud.online/images/teams-and-sip/microsoft-teams/set-up-direct-routing-activation-user.webp)

- Adding an alias to an existing user doesn't activate the domain. It must be a new user.
- If you have no spare licence, move one from another user for now. Once the domain is active, you can delete this user and give the licence back.
- Activation can take a while. If the next step says the domain isn't configured, wait and try again.

## 6. Install the Teams PowerShell module

1. On a Windows computer, open the Start menu, search for **PowerShell**, right-click **Windows PowerShell** and choose **Run as administrator**. Click **Yes** if Windows asks for permission.
2. Install the current Teams module:

   ```powershell
   Install-Module -Name MicrosoftTeams
   ```

   If it's already installed, update it to the current version with `Update-Module -Name MicrosoftTeams`.

3. Allow the module's scripts to run:

   ```powershell
   Set-ExecutionPolicy -ExecutionPolicy RemoteSigned
   ```

4. Close PowerShell and open it again as administrator.
5. Sign in to your Microsoft 365 tenant, and enter the global administrator's details in the window that opens:

   ```powershell
   Connect-MicrosoftTeams
   ```

Use PowerShell 5.1 (Windows PowerShell). Teams PowerShell has known issues with PowerShell 7. On a Mac, you can install PowerShell, but Windows is easier.

## 7. Create the direct routing gateway

The quickest way is the **PowerShell commands generator** in the portal. It fills in your FQDN for you.

1. In the portal, under **PowerShell commands generator**, choose **Direct routing gateway configuration** and click **Generate**. A text file with your commands downloads. It starts with a disclaimer, followed by the commands.

   ![PowerShell commands generator with the two options and the Generate button](https://kb.voipcloud.online/images/teams-and-sip/microsoft-teams/set-up-direct-routing-commands-generator.webp)

2. Paste the commands into PowerShell one at a time, pressing Enter after each.

The generated file contains these four commands. To type them yourself, replace `<FQDN>` with your **Microsoft 365 FQDN address**.

```powershell
# 1. Create the gateway to your PBX
New-CsOnlinePSTNGateway -Fqdn "<FQDN>" -SipSignalingPort 5061 -SendSipOptions $false -Enabled $true -ForwardCallHistory $true -ForwardPai $true

# 2. Create a PSTN usage
Set-CsOnlinePstnUsage -Identity Global -Usage @{Add="VC PSTNUsage"}

# 3. Create a voice routing policy
New-CsOnlineVoiceRoutingPolicy -Identity "VC VoiceRoutingPolicy" -OnlinePstnUsages "VC PSTNUsage"

# 4. Send all numbers to the gateway
New-CsOnlineVoiceRoute -Identity "VC VoiceRoute" -NumberPattern ".*" -OnlinePstnGatewayList <FQDN> -Priority 0 -OnlinePstnUsages "VC PSTNUsage"
```

If the first command says the domain isn't configured for this tenant, the domain isn't active yet. Check [step 5](#5-activate-the-domain-with-a-licensed-user) and wait.

In the Teams admin centre, the gateway's status may show as inactive. That's expected with this setup and doesn't mean anything is wrong.

## 8. Enable calling for each Teams user

1. In the portal, under **PowerShell commands generator**, choose **Enable calling on your Microsoft Teams users** and click **Select accounts**. This works once at least one Teams account is set up.
2. Tick the Teams accounts you want commands for, and click **Generate**. A text file with the commands for each account downloads.
3. Paste the commands into PowerShell.

To type them yourself, run these two commands for each user. Use the user's Teams email address, and their phone number exactly as the portal shows it, in international format without spaces (for example `61XXXXXXXXX`).

```powershell
Set-CsPhoneNumberAssignment -Identity "<email address>" -PhoneNumber "<phone number>" -PhoneNumberType DirectRouting

Grant-CsOnlineVoiceRoutingPolicy -Identity "<email address>" -PolicyName "VC VoiceRoutingPolicy"
```

If you see "lacks appropriate licenses to assign a 'DirectRouting' number", the user doesn't have the phone licence: go back to [step 1](#1-give-your-teams-users-the-right-licence). For other errors, see [Troubleshoot Microsoft Teams](https://kb.voipcloud.online/teams-and-sip/microsoft-teams/troubleshoot-teams/).

## 9. Let Teams dial numbers without a country code

Teams adds a **+** in front of numbers users dial. Without a country code after it, calls can fail. This dial plan passes numbers to the PBX as dialled.

Run these once:

```powershell
New-CsTenantDialPlan -Identity "Voip dial plan" -Description "Pass all numbers to PBX"

$rule1 = New-CsVoiceNormalizationRule -Parent "Voip dial plan" -Name "Match all digits without plus" -Description "pass everything through" -Pattern '^(.*)$' -Translation '$1' -InMemory

Set-CsTenantDialPlan -Identity "Voip dial plan" -NormalizationRules @{add=$rule1}
```

Then run this for each Teams user:

```powershell
Grant-CsTenantDialPlan -Identity "<email address>" -PolicyName "Voip dial plan"
```

## 10. Connect the Teams accounts in the PBX

Add each Teams account to a **User** (as a **Microsoft Teams** device) or to a **SIP trunk** in **Microsoft Teams gateway** mode, then click **Apply configuration**. Every Teams account needs a call plan for outgoing calls. See [Connect Teams users in the PBX](https://kb.voipcloud.online/teams-and-sip/microsoft-teams/connect-teams-users-in-the-pbx/).

## Check it works

1. Restart the Teams app. The **Calls** tab should show a dial pad.
2. Call a mobile from Teams. The mobile should show your business number.
3. Call the Teams user's number from a mobile. Teams should ring.

The dial pad usually appears within a few hours, but Microsoft can take up to 48 hours to finish setting up a user.

## Next steps

- [Turn off Teams voicemail](https://kb.voipcloud.online/teams-and-sip/microsoft-teams/turn-off-teams-voicemail/) so unanswered calls follow your PBX call flow.
- [Add more Teams users](https://kb.voipcloud.online/teams-and-sip/microsoft-teams/add-teams-users/) later.
- [Troubleshoot Microsoft Teams](https://kb.voipcloud.online/teams-and-sip/microsoft-teams/troubleshoot-teams/) if something doesn't work.