You are a Microsoft Teams administrator for your company. The company creates a new Microsoft Teams app named App1. A developer packages App1 as a ZIP file. You need to ensure that App1 can be…

The "Allow uploading custom apps" setting specifically permits users to upload custom applications packaged as ZIP files directly into Microsoft Teams, enabling side-loading of line-of-business or custom-developed applications. This is the necessary setting to allow App1 to be installed from its ZIP package.

Enable new external apps by default" relates to apps from third-party app stores, not custom internal apps.

Enable default apps" likely refers to enabling pre-installed or Microsoft-provided apps, not custom ones.

Allow external apps in Microsoft Teams" generally controls whether users can add apps from the Teams app store (third-party apps), but the more specific and correct option for ZIP package upload is "Allow uploading custom apps."