Several IMAP server implementations, including (older versions of) Horde, work from the Inbox folder as a root folder. New folders can then indeed only be created directly under the Inbox folder which can interfere with Outlook’s internal folder structure.

The result is that you don’t have a Junk E-mail folder and that this feature doesn’t work.

To solve this, you can set the “Root folder path” option in your account settings.

Before	After
Configure a root path if your IMAP folder structure falls under the Inbox folder.

Note: These instructions can also be used if you are using a Gmail account and want to get rid of the separate [Gmail] folder structure and see those folders directly under your IMAP mailbox instead. For full details, see the guide; Gmail IMAP – Solving the [Gmail] separation.

Setting the Root Folder Path for your IMAP account

To make the change, you’ll have to go to the “Advanced Settings” tab of your account configuration;

1. Open your Account Settings dialog;
   • Outlook 2007
     Tools-> Account Settings…-> tab tab E-mail
   • Outlook 2010, Outlook 2013 and Outlook 2016
     File-> section Info-> button Account Settings-> Account Settings…-> tab E-mail
2. Double click on your IMAP account to open the account settings.
3. Click on the More Settings… button.
4. Select the Advanced tab.
5. At the bottom, you can set the “Root folder path” option.
   • For the above example, setting it to “INBOX” solves it.

    
   
   Setting the Root folder path in your IMAP account settings.

6. After setting the option and confirming your way out of all of the opened dialogs, you’ll get a notification that your IMAP cache needs to be rebuild.
7. In some cases, you’ll need to set the Sent Items and Deleted Items folder for the IMAP account again.