With Microsoft Exchange emails set up with 2 Step Authentication, users are required to have two separate passwords. One password is created by the user and is used to log into the account online. The other is a 16 letter generated code that allows users to access their email via applications such as Outlook Desktop App, Mac Mail or smartphone applications. 

If you are trying to set you your exchange email with an application, see the instructions below on how to generate a new application password for your app. 

Generating an Application Password 

1. Sign in to the Additional security verification page, and then select App passwords. Be sure you are logged into the correct email by verifying the account listed in the top right (see below).

2. Select Create, type the name of the app that requires the app password, and then select Next (see below).

3. Copy the password from the Your app password page, and then select Close (see below).

4. From the App passwords page, make sure your app is listed (see below).

5. Open the app you created the app password for (for example, Outlook 2010), and then paste the app password when asked for it. You should only have to do this once per app.