Two-step verification helps protect you by making it more difficult for someone else to sign in to your Xbox Live account. It uses two different forms of identity: your password, and a contact method. Even if someone else finds your password, they'll be stopped if they don't have access to your other devices or accounts.
You set up two-step verification with an email address, phone number, or authenticator app. When you sign in on a new device or from a new location, you will be sent a security code to enter on the sign-in page.
If you turn on two-step verification, you’ll get a security code to your email, phone, or authenticator app every time you sign in on a device that isn't trusted. When it’s turned off, you will only have to verify your identity with security codes periodically, when there might be a risk to your account security.
1. Log into Xbox Live with your Microsoft account as you usually would.
2. Go to your Security Settings page.
3. Under two-step verification, select “Set up two-step verification” to turn it on.
3. You’re almost done! Input the information requested to finalize the process.
For more information visit: http://windows.microsoft.com/en-us/windows/two-step-verification-faq
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