The affected services included Outlook.com, Office.com, Power Platform, Dynamics365, and Microsoft Teams including Teams Live Event.
According to Down Detector, a website that tracks internet outages, users reported issues with logging in, server connection and Outlook globally.
The company first acknowledged issues via the Microsoft 365 Status Twitter account, and said it had rolled back a change thought to be the cause of the issue.
But just 13 minutes later, the company tweeted again to say that it was "not observing an increase in successful connections after rolling back a recent change".
"We're not observing an increase in successful connections after rolling back a recent change. We're working to evaluate additional mitigation solutions while we investigate the root cause," the Microsoft 365 team said in a tweet.
The company said that it was rerouting traffic to alternate infrastructure to improve the user experience.
"The majority of services are now recovered for most users," it then updated.
"We're continuing to see significant improvement for affected services and most users should be experiencing relief," the company added.
Microsoft's Azure Active Directory service, however, was still experiencing issues, according to the Azure status page.
Microsoft said that it has "applied mitigation steps" to try and fix the problem.