Distribution list has reached maximum size errors

Issue: you may receive error that distribution list has reached max size and therefore no new contacts can be added.
 
Info: There is no definite limit to the number of contacts that you can add to a distribution list. The exact limit is based on the total file size of the contacts. 
If you use only the very basic information for contacts, your distribution list limit may be as many as 125 contacts to 130 contacts. For example, the information for the contacts in a list of this size may include only the name and the e-mail address for each contact. You can create very large distribution lists that contain over a 1,000 contacts. However, these very large lists may not function as expected in Outlook.
 
Resolution/Workaround:
 
create multiple distribution lists while not exceeding maximum number of contacts. Please follow these steps to create multiple distribution lists
 
  1. In the Contacts folder in Outlook, open the large distribution list.
  2. On the File menu, click Save As.
  3. Type distribution_list_name Copy, click Outlook Message Format (*.msg) in the Save as type list, and then click Save. 

    Note This creates a backup copy of your original distribution list.
  4. Close the distribution list.
  5. Reopen the distribution list.
  6. In the Name box, type the following text at the end of the distribution list name:
    (start_firstname - end_firstname)
    In this example, start_firstname is placeholder text for the first name of the first contact in the new list. The placeholder text for the first name of the last contact in the new list is end_firstname. Select a range of contacts that has fewer than the maximum number of contacts. 

    For example, the distribution list "Business contacts" contains 200 contacts. There are 70 contacts between David Jones and Tony Smith. Therefore, you rename the list to "Business contacts (David - Tony)."
  7. Select and then delete all the contacts that are not in the name range that you specified in the new list name. 

    For example, if you rename the list to "Business contacts (David - Tony)," you then delete all the contacts that have first names that come before "David" alphabetically. Additionally, you delete all the contacts that have first names that come after "Tony" alphabetically.
  8. On the File menu, click Save As.
  9. Click Outlook Message Format (*.msg) in the Save as type list, and then click Save.
  10. On the File menu, click Close. When you are prompted to save changes to the list, click No.
  11. In Windows Explorer, open the folder to which you saved the modified distribution list, right-click the .msg file, and then click Copy.
  12. In the Contacts folder in Outlook, click Edit, and then click Paste. This creates a new distribution list that uses the new name that you specified in step 6.
  13. Repeat steps 5 through 12 for each group of contacts that you want to separate into an individual distribution list.
Reference: http://support.microsoft.com/default.aspx?scid=kb;en-us;238569&Product=out