After upgrading to Outlook 2007 or above, you need to convert categories to color categories to add them to the master categories list.
Do this by right clicking on the top level folder (where Outlook Today is) and choose Data File Properties from the menu.
If using Outlook 2007, the command is called Properties.
It should be the last command, as seen in the screenshot, but may not be the very last item if you have add-ins installed that add commands to this menu.
In the Properties dialog, click the button to Upgrade to Color Categories. This will convert the categories and add any not already on your master color category list, to it.
If you have more than one account in your profile that uses an existing data file, you need repeat these steps for each account.
To share color categories with other users, see the Tools below.
Tools in the Spotlight
Category Manager allows sharing of color categories; it adds a sidebar to the folder view as well as opened items, in which you can group your categories and assign them lightning fast; and it adds a reminder, which optionally prompts you if you forget to assign a category. Version 3
Categories Administrator was specifically designed for users to easily administer Master and Individual Contact Categories in Outlook/Exchange/BCM. Add, rename, merge, remove, delete, import, and create categories in Outlook/Exchange/BCM. Create a query and then map it to the selected contacts.
Want the same Master Category List in Outlook on different PCs? This free utility, Category Importer for Outlook, exports your Master Category List (MCL) to a text file that you can easily import on another PC.
CodeTwo CatMan allows sharing of Outlook categories with other users on the local network. Centralized management using a shared configuration file. Version 3.0.1
For Mac users. Export contacts from a specific category in Outlook 2011 or Entourage.
Exchange Category Manager is a plug-in for Exchange 2010. It enables you to manage the Outlook categories and colors that are available in Outlook 2007 and up. Define an unlimited number of groups with different users. Each group can have it's own set of categories and colors that the user can choose from. You can add categories to the existing list that a user has in Outlook or replace everything with the predefined list. As it integrates with Exchange server directly, the users do not have to do, their category list is automatically managed.
ReliefJet Essentials for Outlook is a straightforward tool that consists of a large set of useful and easy-to-use tools for every Microsoft Outlook user. The product seamlessly integrates with Outlook and includes Outlook add-in, standalone and Windows command line applications. Utilities can be run in manual and automatic modes as well as on a scheduled basis. This major update includes new utilities and features as well as performance and reliability enhancements. Imports email messages from MBOX files into Outlook/Exchange folders with Internet headers. Converts MBOX files to MSG for EML.