Ever since day one at Adobe I've had an odd issue with Outlook on my Mac. About 3-4 times a day it would 'forget' my password. As soon as I entered my password it worked, but it bugged me that I had to keep re-entering it. I Googled but never found the right answer. I deleted and recreated my profile numerous times, but it never helped.
Finally, Terry White (fellow Adobe evangelist!) made a simple suggest. Instead of entering my password in Outlook, I should be doing it in the Exchange settings via System Preferences.
So first you go here...

And then click Details:

That was it. Seriously. I can't believe I didn't figure that out earlier, but every single time I tried to fix it by Googling around I never came across this solution. (Probably because it was too obvious. ;)
Archived Comments
It still baffles me why there are so few mail clients for Mac that support Exchange. It's not uncommon for Mac users to exist in a Windows-centric environment. There seems to be a huge opportunity to develop a native Mac mail client that can talk to Exchange.
To be fair, I really don't mind Outlook. This was one of two issues I've had. The other one is an odd "End of file" type error I get a few times a week. Restarting Outlook fixes that.
Ugh. Well, after a day or so it reverted. Yesterday afternoon it started up with the same bullshit. It prompted me a few times and then was fine again until one minute ago.
Just to add some context, Outlook ran all weekend so far w/o a prompt. So things are definitely improved with this tip.
Have you found a perm solution?
Nope. I now use Outlook.com.