Enabling internal relay will forward email sent to users that do not exist on the Office 365 server to the MX records of the domain.
1. Login to the Office 365 Portal as an administrator.
2. Click the Admin drop down menu on the upper right and select Exchange.
3. On the Exchange Admin Center menu on the right, select mail flow, click accepted domains from the top menu, and then double-click your domain.
4. In the domain pop-up window, select internal relay domain, and then click save.
5. Mail will now be delivered to external users that do not exist on the Office 365 server.