Hotmail users are being advised to change their passwords, after thousands of account details were posted online.
A list containing more than 10,000 apparently genuine account names and passwords was posted to a website last week, where it remained until being spotted over the weekend by Microsoft security researchers.
The list, which has been seen by the Guardian, appears to be genuine.
It only contains usernames beginning with the letters A and B, but covers accounts ending in @hotmail.com, @msn.com and @live.com - three services owned by Microsoft which have more than 280m users worldwide.
Although the stolen details have since been taken offline, copies of the list are already available elsewhere on the web - meaning that the details are potentially in the hands of criminals. There are also concerns that the details that have been published could be just a portion of a larger body of compromised information.
Microsoft said it had been "made aware" of the situation, and was investigating the leak. In the meantime, security experts suggested that users should change their passwords to avoid the possibility that their email accounts could be accessed by other people.
"Change your passwords - and if you use the same password on other websites, change it there too," said Graham Cluley, a consultant with security company Sophos.
"It's still unclear how they got the passwords - but it could be embarrassing for Microsoft," he added.
It is not yet clear how the individual behind the leak obtained the passwords - whether through hacking into the service, installing a Trojan program onto victim's machines or through a phishing attack.
But the theft of information is a blow to Microsoft, coming just days after the American software giant launched its own suite of free anti-virus software, Security Essentials.
The company's head of consumer security, Amy Barzdukas, told the Guardian last week that it would be impossible to eradicate viruses and internet worms entirely, since "consumers aren't that technical".
"I don't think anybody in the antivirus area of the company thinks there will be a time when there will be no more malware," she said.
"What we look forward to is continuing our ability to protect against malware, and to make those protections more robust and less prone to requiring constant updating."
The British programmer behind the pastebin website, which is normally used by software developers to share snippets of code, did not respond to a request for comment.
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