The software giant has not released details of the problem but angry users have been expressing their frustration about the lack of service.
Hotmail has about 80 million users and accounts for nearly a quarter of the webmail market.
"We are aware that some customers may be experiencing difficulty accessing their Windows Live accounts," said a Microsoft spokeswoman.
"We are actively investigating the cause and are working to take the appropriate steps to remedy the situation as rapidly as possible. We sincerely apologise for any inconvenience and disruption this may be causing our customers."
Microsoft said in previous statements that the problem had been resolved but it has reoccurred, indicating a serious malfunction.
The news will be a boon to Google and Yahoo, which are also key players in the web mail market.
Several readers have indicated their frustration over the outage. "I'm totally locked out," said one. "I'm giving it another a day then going to Google. I've had enough of this."
Microsoft investigates Hotmail outage
By Iain Thomson on Mar 3, 2008 7:19AM