We’re seeing more complaints that Outlook reports this error: “Outlook could not create the work file. Check the temp environment variable.” In many cases, this happens after an upgrade.
This error is the result of a corrupted temporary internet cache variable, possibly caused by the upgrading the OS or using Easy Transfer to move settings to a new computer.
Fixing it is fairly easy, but does require editing the registry.
At Start menu, Run (or Windows key + R) type
Browse to HKEY_CURRENT_USER\Software\Microsoft\Windows\Current Version\Explorer\User Shell Folders
The Cache variable (in the right pane) should be as follows:
Vista or Windows 7:
%USERPROFILE%\AppData\Local\Microsoft\Windows\Temporary Internet Files
%USERPROFILE%\Local Settings\Temporary Internet Files
Double click on the Cache name to open it and edit.
Published November 10, 2009. Last updated on May 17, 2011.