How to create M365 DL Groups from Admin panel

If you want to create a Distribution List in Office 365, perform the following procedure step-wise.

1. Open Office 365 admin center and then navigate to Groups>Groups.
   
2. Then click + Add a group option to add a Distribution List.
   
3. New Group page will get open. Here under Add a group, select Distribution List option from the Type drop-down.
   

4. Note: Users can click on the +Distributions list tab on the Home>Groups page to add Distribution List directly.
   

5. Add a Group name, Group email address, Description (optional), drag the option to On/Off to allow/disallow external users (outside from the organization) to send emails to this group. Read the instructions given below and click Add.
   
6. A message will be displayed that the Group was added. Click Close.
   
7. Select your newly created Distribution List and double-click on it. You can anytime edit the Group name, Owners, Members and Exchange Settings using the respective Edit options.
   
8. Click Edit against Owners to add the Group owners. Click + Add owners, search them using the option and add them. After adding desired owners, click Close.
   Note: Group Owners need not be members of the distribution group. By default, the user who is creating the group is the owner. However, he can add more owners to the group.
   
9. To add members in the Distribution List, click Edit against Members option. Then click + Add members to search and add the members from the users’ list. Add the desired members and click Close.
   
10. You can also change the Exchange Settings by clicking the Edit Exchange Settings option against Exchange Settings. Different Exchange Settings categories like ownership, membership, membership approval, delivery management, message approval, email options, MailTip, group designation are available. Users can change the settings as per the need and click Save to save it.
    
11. You can manage the senders of the emails whether from inside organization only or both inside and outside the organization by clicking the delivery management category within the Exchange Settings option. Select the desired radio button and click Save to save this setting.
    Therefore, the Distribution Lists group in Office 365 is successfully created along with desired members and settings. Reference Article