More Info for Email Admins
This error occurs because the sender sent a message to someone whose mailbox is hosted by Office 365 and the email address is incorrect. The error is reported by the recipient's email system, but most often it must be fixed by the sender. An example is when the recipient changes their email address but the sender selects the person from the recipient AutoComplete list, which has the out-of-date email address information.
Sometimes it needs to be fixed by the recipient or the recipient's email admin, for example, when the recipient has created a mail forwarding rule to an incorrect address, or if there's a problem with their email address directory. If the sender is using the correct recipient address, and it's still not working, send a test message from another user mailbox to see if it's an issue unique to this sender. If you reproduce the problem sending from another user account, ask the recipient or the recipient's email admin to confirm that the recipient address exists, is correct, and is working. Suggest they check for misbehaving forwarding rules or possible email address directory issues (such as directory synchronization issues).