Unread Message Count Incorrect on Exchange Account's Inbox

I've got exactly the same problem. I have an Exchange mailbox setup on my iMac at home. I also have an iPad and a Blackberry, both of which are synced to the same Exchange account, and of course my office PC is also synced. Only my iMac at home is reporting 7 unread messages in the Exchange email. I've gone through the same troubleshooting steps as John above (deleted the account twice and re-added -- no luck. Rebuilt the mailbox -- no luck. Added a Smartmailbox showing only unread messages -- no luck, nothing appears. I highlighted all the messages in my inbox and marked them as "Read", but it's still reporting 7 unread messages! This has to be a glitch in Mail on the iMac, but ..... what?

Agreed, this is a major annoyance. Any help on a fix would be appreciated.

OK, I think I found a fix to the mystery Unread Messages notification, and it fixed my Unread Message errors in my Exchange account. From my searching on the internet, apparently on some Macs, Mail doesn't run indexing after Lion has been installed. This behavior causes Mail to show the incorrect Unread Message count next to mailboxes AND it causes Mail to have the wrong count in the red badge on the Mail icon in the dock (if you have thatfeature enabled). Basically, the indexing information is wrong and needs to be reloaded with the correct info.

Here’s what I did to fix it:

1. QuitMail.

2. In a Finder window, navigate to Username/Library/Mail/V2/MailData, and delete any file that begins with Envelope Index, such as "Envelope Index" or "Envelope Index-shm" or "Envelope Index – wal". In my case, I had all 3 of these Envelope indexes, and moved them to the trash. NOTE: When accessing Library, keep in mind that your home Library is hidden in Lion. To access it, from the Finder, hold down the Option key and click on the Go menu. The Library should be then be shown in the menu and you can select it.

3. Restart Mail. It will then rebuild a new list of messages, which can take some time, so be patient. Another NOTE for EXCHANGE users: After removing the Envelope Indexes, my Exchange account email content was blank. To revive it, I had to delete my Exchange email account and add it again fresh. After adding it from scratch (and the download took a while since I have about 12K messages), the mystery Unread Message notifications were gone.

This worked - thank you!!!

Worked. Thanks for the detailed steps!

Just as a heads up ... I had 2 emails that popped up in my draft folder. Both of which were sent TO me but for some reason Mail thought they were MY drafts. It was asking which outgoing mail server to use, I chose "Edit Message" or something like that and just closed the message window - still had to delete from draft folder.

Also I re-received an email from 4 years ago - odd.

Process was not completely error free, but not even close to a hassle.

The error went away for a while, but came back recently - I wonder if it has something to do with viewing messages on my iPhone?

This worked perfectly on this exact problem that I was having. Thank you!