How to add subdomains to Office 365 (2015 Edition)
If you’ve found this post, you’ve probably tried to add a subdomain to Office 365 and run across this error:
sub.contoso.com is a subdomain of a domain that was added by using the Microsoft Online Services Module for Windows PowerShell so you’ll need to also use Windows PowerShell to add sub.contoso.com to Microsoft Online Services.
The following commands should be used from the Windows Azure Active Directory PowerShell Module to resolve this:
For a federated domain (AD FS)
Connect-MsolService New-MsolDomain -Name sub.contoso.com -Authentication Federated
For a managed (standard, in cloud, non-federated, password sync, cloud only, whatever you’d like to call it) domain
Connect-MsolService New-MsolDomain -Name sub.contoso.com -Authentication Managed
You can use Get-MsolDomain to validate this configuration.
Keep in mind that subdomains must use the same authentication method as any parent domains.