I have this problem and hope someone can help. I have an internal Windows 2003 server that sends mail to external addresses (gmail, hotmail and all those) via Exchange 2007. The error i am receiving in the logs and a manual smtp conversation is the 5.7.1 Unable to relay. It makes sense, because hotmail, gmail and the likes are not configured in the Accepted Domains list. When I configure gmail.com in the external relay part of Accepted Domains then it works, but I can surely not be expected to create an external relay in the Accepted domains section for each possible email domain out on the internet. Is there a way to make this work?

I managed to resolve this by adding an external relay for a wildcard domain. Not really what I would want, I am looking more for allowing an "all access" for a specific IP address of the internal server.

Take a look here: Allowing application servers to relay off Exchange Server 2007http://msexchangeteam.com/archive/2006/12/28/432013.aspxMCTS: Messaging | MCSE: S+M | Small Business Specialist

Please try the suggestions in the article and let us know the result. Thanks.

I removed the wildacard external relay and implemented the configuration as described in the article, and it works beautifully and I am still as secure as I was before this. Thanks Jon-Alfred Smith!

I have referred the article, but in my case I still get unable to relay for internet emails. Internal emails are fine. My application server is outside my network and is using IIS smtp server to relay emails using my custom receive connector. Any help is greatly appreciated ...

I got it to work using Basic Authenticatino over TLS.