Use Favorites in Outlook 365 / Reordering your Email Folders

You can create and manage  favorite folders to keep your frequently used folders easily accessible.

Let's walk through the steps:

1.  Adding Favorite Folders
    - Right-click  on the "Favorites" section in the folder pane (located at the top).
    - Select  "Add favorite"
    - Search for the folder, person, or category you want to add. You can also choose from the suggested list.
    - By default, the new favorite is added to the bottom of the list.
    - To rearrange the order, simply drag and drop the name to the desired position.
 

2.  Removing Favorite Folders
    -  Right-click  on the name of the item you want to remove from the list.
    - Select  "Remove from Favorites".
    - Important: Removing a folder or item from Favorites doesn't delete it; it only removes the shortcut. The original folder in the folder list remains intact.

3.  Reordering Folders.
    - To rearrange the folders in the folder pane, **drag** the folder to a new location in the folder list.
    - Note that **Search Folders** cannot be moved and are always the last set of folders for an account.
    - Additionally, you can add folders to the **Favorites** section, which appears at the top of the Folder Pane.

Remember to **remove folders from Favorites** instead of deleting them. When you remove a folder from Favorites, the original folder in the folder list remains unaffected. 

For more detailed instructions, you can refer to the [official Microsoft Support article Use Favorites in Outlook - Microsoft Support