Running Exchange2007 (all in one) in a 2003 Server box. A normal outgoing message sent to an external address is promptly and correctly delivered. If an exteranl sender sends an email to a bad address within the domain the sender does not receive an undeliverable message. (If an internal sender does the same a standard undeliverable message is received by the sender.) The undeliverable messages show up in the Journal normally, but in Message Tracking under the Troubleshooting Assistant it shows failure: EventID=DSN;Source=DSN;SourceContent=Failure. Yet the line directly below this shows: EventID=SEND;Source=SMTP;SourceContent=08CDAA1AB; RecipientStatus=250 Recipient username@domain OK. "Allow non-delivery reports" under Hub Transport is enabled.

Hi, The your NDR may be rejected by the sender's mail server. Please contact the administrator of the sender' mail server to check if this is the case.Please remember to click Mark as Answer on the post that helps you, and to click Unmark as Answer if a marked post does not actually answer your question. This can be beneficial to other community members reading the thread. Thanks Gen Lin-MSFT