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User passwords expire on a regular basis in Office 365. As an admin, you can set a policy to make a user's password expire after a certain number of days. Users are notified to change their password before their password expires.
Admins can set passwords to expire anywhere between 14 and 730 days, and for Office 365 for enterprises pre-upgrade and Office 365 Enterprise and Office 365 Midsize Business after the service upgrade, you can set up user passwords to never expire.