An M365 Group or Microsoft 365 Group can be used like a Distribution List. There are also many other potential uses for these groups. Groups in Microsoft 365 let you choose a set of people you want to collaborate with and easily set up a collection of resources for them to share. Resources include a shared Outlook inbox, shared calendar, or a document library for collaborating on files. This type of group is the best for collaboration with internal and external users. This group can be used to create a Microsoft Team as well. Emails sent to the group email address are distributed to all group members.
M365 Groups are limited to 500 people or less.