The error message "Sensitivity label cannot be assigned to this file as the sensitivity label operation is disabled" in your SharePoint document library usually means that the ability to apply sensitivity labels to files is not currently enabled or properly configured in your Microsoft 365 environment.
Here are some possible causes and steps to resolve the issue:
### Possible Causes
- Sensitivity labeling might not be enabled for SharePoint and OneDrive in Microsoft Purview (formerly Microsoft Information Protection).
- The label publishing policies may not include the scope or locations required for this to work in your SharePoint library.
- Certain file protection scenarios or encryption settings may block labeling actions on files.
- Licensing requirements may not be met for advanced sensitivity label features, or the tenant-level setting to enable labeling is turned off.
### What to Check and Do
- Ensure that Microsoft Purview Sensitivity Labels are enabled for SharePoint and OneDrive. This can be verified and enabled through the Microsoft Purview compliance portal.
- Review your sensitivity label policies and confirm that the labels are published with the scope including “Items” (files) and “Groups & sites” if you want to target SharePoint sites.
- Verify that the tenant setting for enabling sensitivity labels integration with SharePoint Online is turned on. This is usually managed via SharePoint Online Management Shell with the `Set-SPOTenant -EnableAIPIntegration $true` command.
- Check if your organization’s licensing covers the use of sensitivity labels with SharePoint. Features such as default sensitivity labels might require Microsoft 365 E5 or specific compliance add-ins.
- Avoid labeling issues by checking file states such as whether the document is checked out or locked, since sensitivity labeling functionality depends on certain document states.
- Sometimes changes in label policies and publishing take several hours to propagate fully, so if the labels were recently created or updated, allow for replication time.
- If you are performing labeling through APIs or automation, ensure the sensitivity label ID and request parameters are correctly set and valid for the target files.
If you confirm that labeling is enabled and policies are correctly configured but the issue persists, consider reviewing logs or reaching out for support to check if there is a service-side limitation or permission conflict affecting your SharePoint site sensitivity labeling.
This approach should help identify and fix the block preventing you from assigning sensitivity labels to files in your SharePoint document library.
Sources:-
[1](https://learn.microsoft.com/en-us/purview/sensitivity-labels-sharepoint-onedrive-files)
[2](https://learn.microsoft.com/en-us/purview/sensitivity-labels-sharepoint-default-label)
[3](https://community.powerplatform.com/forums/thread/details/?threadid=5ceb4ad1-e792-f011-b4cc-000d3a13d3fe)
[4](https://www.gravityunion.com/blog/2022/7/sensitivity-labels-sharepoint)
[5](https://www.reddit.com/r/sharepoint/comments/1ayy54g/default_sensitivity_label_option_missing_for/)
[6](https://www.sharepointeurope.com/how-to-protect-sensitive-information-in-sharepoint-online-using-purview-sensitivity-labels/)
[7](https://learn.microsoft.com/en-us/answers/questions/1301023/sensitivity-label-cannot-be-assigned-since-value-p)
[8](https://practical365.com/assignsensitivitylabel-api/)
[9](https://arashaghajani.com/blog/how-to-enable-m365-groups-teams-and-sharepoint-sites-option-in-sensitivity-labels-in-microsoft-purview/)
[10](https://support.microsoft.com/en-us/office/known-issues-with-sensitivity-labels-in-office-b169d687-2bbd-4e21-a440-7da1b2743edc)
[11](https://andrewwarland.wordpress.com/2025/02/05/sensitivity-labels-finally-linked-with-sharepoint-permissions-with-limits/)
[12](https://learn.microsoft.com/en-us/purview/sensitivity-labels)
[13](https://office365itpros.com/2023/06/29/find-sharepoint-documents-labels/)
[14](https://support.workpoint.dk/hc/en-us/articles/25697855654290-Sensitivity-labels-and-information-protection-rules)
[15](https://learn.microsoft.com/en-us/purview/create-sensitivity-labels)
[16](https://www.reddit.com/r/Office365/comments/yiwif2/can_anyone_help_me_understand_why_my_sensitivity/)
[17](https://admindroid.com/how-to-audit-sharepoint-online-sensitivity-labels-in-microsoft-365)
[18](https://learn.microsoft.com/en-us/purview/sensitivity-labels-teams-groups-sites)
[19](https://practical365.com/assign-sensitivity-labels-cmdlet/)
[20](https://www.reddit.com/r/sharepoint/comments/jwmhc3/unable_to_apply_sensitivity_label_to_sharepoint/)
