Allowing application servers to relay off Exchange Server 2007 errors 5.7.1 authenticated and relay issues
Ran into this issue today, trying to open up Exchange 2007 to internal application for SMTP relaying. There’s a bunch of “Fixes” out there that open up the exchange server to everyone which isn’t very secure. So when I ran into my errors of 5.7.1 client was not authenticated and 5.7.1 unable to relay I ran into a wall of wrong answers. This post by the Microsoft Exchange Team themselves solved the issue for me, thank you!
This post is only an excerpt of the original solution posted here
Only the list below (specify IP address)
This option is for those who cannot authenticate with Exchange. The most common example of this is an application server that needs to be able to relay messages through Exchange.
First, start with a new custom receive connector. You can think of receive connectors as protocol listeners. The closest equivalent to Exchange 2003 is an SMTP Virtual Server. You must create a new one because you will want to scope the remote IP Address(es) that you will allow.
The next screen you must pay particular attention to is the “Remote Network settings”. This is where you will specify the IP ranges of servers that will be allowed to submit mail. You definitely want to restrict this range down as much as you can. In this case, I want my two web servers, 192.168.2.55 & 192.168.2.56 to be allowed to relay.

