Securing Office 365 files and emails using Sensitivity Labels

Restrict who can access an Office 365 file or email by using Sensitivity Labels:

While creating an email in Outlook, document in Word, spreadsheet in Excel, or presentation in PowerPoint, choose Sensitivity on the Home ribbon bar. Note this is only available with the Office 365 or web version of the apps.
Choose the Sensitivity Label which best meets your needs in restricting which audience is allowed for your item. You can hover over each label to get a description of the label.

The Confidential and Highly Confidential labels provide the most restrictions and security for the items which need it. Further, you have options within those labels to specify particular people allowed access rather than broad categories of people.

Examples of when to use Sensitivity Labels:

Composing an email with confidential information you do not want shared outside of the recipients you choose.
Creating an Excel spreadsheet containing sensitive personally identifiable information.
Creating a Word document with highly confidential content you will only share view-only with a select group of individuals.