Over the past few weeks, some users have complained of occasional very high data use on their Windows Phone 7 handsets, usage that seems to take place without any action by the users, and that ignores a Wi-Fi connection to use 3G, potentially exhausting data plan limits.
Last month, Microsoft confirmed there was a glitch but refused to name the "third-party solution commonly accessed from Windows Phones" that was causing the issue.
However, this week the tech giant chose to name the company.
"We have determined that inefficiency exists in the synchronisation of email between the Windows Phone mail client and Yahoo Mail," Microsoft said in a statement.
"This inefficiency can result in larger than expected data usage for a very small percentage of users."
Microsoft revealed an error in the code that instructs Windows Phone 7 handsets on how to download mail from Yahoo, means up to 25 times more data than necessary is being downloaded
Microsoft said it is liaising with Yahoo in a bid to develop a solution. Yahoo has yet to respond to a request for comment on the issue.