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I have setup postfix and dovecot, I can even receive e-mails and pick them up remotely using Thunderbird client connecting via IMAP

However, I can not send out using the Smtp server, when I telnet locally to my server using telnet 25 and then perform ehlo there is no 250-auth line - is this the problem and how do I fix it ?

I have smtpd_sasl_auth_enable = yes in

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isn't smtpd_sasl_auth_enable = yes a setting for – Sgaduuw Aug 1 '11 at 15:34
Hi Sgaduuw, it's in – Zhang Huangbin Aug 2 '11 at 0:08
up vote 4 down vote accepted
smtpd_tls_auth_only = yes

Needed to change this to

smtpd_tls_auth_only = no
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Could you then please accept your own answer?! – mailq Aug 3 '11 at 11:00

Is the out put of postconf smtpd_tls_auth_only smtpd_tls_auth_only = yes?
If so, need to use starttls before authenticating.
Could disable setting to allow for unencrypted authentication (not advised).

Can debug with starttls using:
openssl s_client -connect $YOUR_SMTP_SERVER:25 -starttls smtp -CApath $PATH_TO_CA_DIR

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Currently, for submitting e-mail from the MUA to the server one should use port 587. The protocol is still SMTP, but the standard requires authentication to be performed at this port before mail can be sent. – Hubert Kario Aug 1 '11 at 20:23

This is kind of stretch, but have you verified that it's listening on TCP 25 with lsof?

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Nim telnets to port 25 and gets a response. – ΤΖΩΤΖΙΟΥ Aug 4 '11 at 7:35

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