Password Protect SharePoint Folder

If you’re looking to password protect SharePoint folder, you won’t find a direct “set password” option like on your PC. Instead, SharePoint uses permissions, sharing links, and sensitivity labels. Today, I’ll guide you on how to make a folder password protected in SharePoint via three reliable methods, step by step.

Table of Contents

Can You Password Protect a Folder in SharePoint?

How to Password Protect a SharePoint Folder?

#Technique 1. Using Folder Permissions

#Technique 2. Share Protected SharePoint Folder Link

#Technique 3. Use Sensitivity Labels

Best Practices

Author’s Verdict

People Also Ask

Can You Password Protect a Folder in SharePoint?

No, SharePoint does not allow you to set a password for a folder. Instead, folder protection is achieved through SharePoint Online permission controls.

This means you control:

Who can access
What they can do
How they interact with the folder

Rather than giving them a separate password.

However, you can still achieve the same outcome of restricting access to specific users by:

Changing folder-level permissions
Setting unique access restrictions
Sharing a folder with a password-protected link

All these things, I’ll explain to you simply and in-depth. So, let’s move to the methods for SharePoint password protect folder.

How to Password Protect SharePoint Folder?

As I explained clearly, there is no option to directly password protect a SharePoint folder. But, as I promised my users, I’m here with 3 practical approaches, and as usual, all are tested by myself, i.e.

#Technique 1. Restrict Access Using Folder Permissions

One of the most effective ways to protect sensitive folders in SharePoint is by adjusting permissions. Here’s how:

Open Document Library.
Select the folder to protect.
Click the three dots (…) > Manage Access.
Choose Advanced to open permission settings.
Stop inheriting permissions from the parent library by selecting Stop Inheriting Permissions.
Remove users or groups who should not have access. Instead, add only the specific users or groups to grant access.

This way, only the selected people can open the folder, and without applying any restrictions/password, you can safeguard your data.

Option 2. Use PnP PowerShell to Password Protect SharePoint Folder

If you’re an admin managing multiple sites, using PnP PowerShell saves time:

# Connect to your SharePoint site
Connect-PnPOnline -Url "https://contoso.sharepoint.com/sites/YourSite" -Interactive
# Break inheritance and reset permissions on the folder
Set-PnPFolderPermission -List "Shared Documents" `
  -Identity "Shared Documents/Confidential" `
  -User "team-ops@contoso.com" `
  -AddRole "Contribute" `
  -ClearExisting

This is the best trick I found. But, it requires some technical expertise; if you do not run it correctly, sometimes you will face Connect-SPOService: Could Not Connect to SharePoint Online, or data loss issues.

If you are not well familiar with technical-know how, then don’t worry. I have more options:

#Technique 2. Share Password Protect SharePoint Folder Link

Microsoft 365 integrates with OneDrive, which does allow secure sharing with passwords. If your SharePoint is synced with OneDrive, then follow these step-by-step instructions:

Select the folder in SharePoint.
Click Share.
Under Link settings, select Specific People.
If your tenant supports it, set a password for the link and an expiration date.
Share the link only with intended recipients.

This is also helpful when you need to share folders externally with security.

#Technique 3. Use Sensitivity Labels for Extra Security

Sensitivity labels are also a straightforward way to enforce advanced folder protection in SharePoint. With Microsoft Purview Information Protection, you can apply labels like Confidential to folders. This also doesn’t password protect SharePoint folder, but adds security.

To do so, follow the guidelines:

Open the Microsoft 365 compliance portal.
Navigate to Information Protection > Labels and select + Create a label.
Name the label and configure protection settings, such as:
- Encrypt files
- Restrict sharing to specific users or groups
- Block downloads if needed
Publish the label through a Label Policy and assign it to users or groups.
In your SharePoint Document Library, select the folder and apply the sensitivity label from the Details (i) panel.

For admins or users who have technical knowledge, this task is automated via PowerShell:

#Install the Information Protection module:

Install-Module -Name AzureInformationProtection -Force

#Connect to the Security & Compliance Center:

Connect-IPPSSession

#Get a list of available sensitivity labels:

Get-Label

Unfortunately, labels apply to documents, not folders directly. To handle folders, apply the label to all files inside the folder. For example:

Set-Label -Identity "For example Confidential" -Site https://mackjohntenant.sharepoint.com/sites/Finance -Library "Documents" -Folder "Reports/2025"
#Apply the label to all files inside a folder (bulk):
 $FolderPath = "C:\Downloads\FinanceReports"
$Label = "Confidential"
Get-ChildItem -Path $FolderPath -Recurse | ForEach-Object {
    Set-AIPFileLabel -Path $_.FullName -LabelId (Get-Label -Identity $Label).ImmutableId -EnableLabeling
}

Best Practices to Password Protect SharePoint Folder

Here are some practices that help you manage folder restrictions:

Only give access to those who truly need it
Enable MFA (Multi-Factor Authentication)
Backup SharePoint Online to local Storage
Set expiration for guest access
Regularly audit permissions to ensure no unauthorised access
Leverage DLP (Data Loss Prevention) policies to block sensitive information from leaving your organisation

Author’s Verdict

Even though you can’t directly password protect SharePoint folder, I’ve found that using permissions, secure links, and sensitivity labels achieves the same. Everything I gained from my experience, I shared with you related to the SharePoint password protect folder.

I hope you’ll share this information with others who are wondering how to make a folder password protected in SharePoint.