User profile folder showing SharePoint/profile icon in C:\Users after domain login

Question

User profile folder showing SharePoint/profile icon in C:\Users after domain login

Gaurav Padale 0

After joining Windows devices to the on-premises Active Directory domain and signing in with domain user accounts, all newly created user profile folders under C:\Users display a SharePoint/profile-style icon instead of the standard Windows folder icon.

Environment:

Domain: On-premises Active Directory
Issue occurs for all domain users
Local folders (e.g., LocalAdmin, Public) display the normal folder icon
User profile folders created after domain login display the different icon

Please verify whether any Microsoft Entra ID, OneDrive, SharePoint, Group Policy, or profile-related configuration is causing this behavior, and advise whether it is expected or if a configuration change is required to restore the default folder icon.

Attachments:

Screenshot showing C:\Users with the affected user profile folder icon.

This gives the Entra/identity team enough context to investigate whether any Microsoft 365, Entra, OneDrive, or policy configuration is influencing the folder icon.

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1 answer

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Answer 1

Hello,

The icon change you are seeing for domain user profile folders under C:\Users is not a standard or expected behavior in a pure on‑premises Active Directory environment. By default, Windows creates profile directories with the standard folder icon. The fact that these new domain user profiles are showing a SharePoint/OneDrive‑style overlay strongly suggests that a Microsoft 365 or OneDrive integration policy is being applied at logon.

This typically happens when Group Policy or Intune delivers OneDrive Known Folder Move (KFM) or folder redirection settings. When OneDrive is configured to redirect Desktop, Documents, or Pictures, the shell overlay icon can propagate to the parent profile folder, making it appear as if the entire profile is a cloud‑linked directory. Another possibility is that the OneDrive client is auto‑provisioned for domain users via Group Policy or Entra ID hybrid join, and the shell icon overlay handler (OneDriveShell.dll) is being applied to the profile path. That would explain why local accounts like LocalAdmin and Public remain unaffected, since they are not subject to the same policies.

To verify, check the applied Group Policies under User Configuration > Administrative Templates > OneDrive. Look specifically for “Silently configure OneDrive using primary Windows account” and “Prevent users from changing the location of their OneDrive folder.” Also review whether Known Folder Move is enabled. If you are not using Microsoft Entra ID or Intune, confirm that no hybrid join policies are in place that would auto‑enroll devices into M365 identity.

If your intent is to keep user profile folders as standard Windows folders without cloud overlays, you will need to disable OneDrive auto‑provisioning and folder redirection policies. Removing those policies will restore the default folder icon behavior. This is not a bug in Windows itself, but a side effect of OneDrive/SharePoint integration being enforced at the identity level.

I hope you've found something useful here. If it helps you get more insight into the issue, it's appreciated to accept the answer. Should you have more questions, feel free to leave a message. Have a nice day!

Domic Vo.