Definition: Email authentication method that seeks to correlate the domain name in a "purported" address with the sender's IP address.
Sender ID is an email authentication method that seeks to correlate the domain name in a "purported" address with the IP address of an SMTP client currently connected and waiting for confirmation that a message was received. The purported address is determined by looking at the headers on the message data. After receiving the message data, but before the client is disconnected, the server does a DNS query for a Sender ID record on the domain name.
If the IP address is listed in the Sender ID record, the authentication result is PASS, and the message may be processed in accordance with the reputation assigned to the domain. If the authentication result is FAIL, the message may be immediately rejected. Often, however, the result is neither PASS nor FAIL, but unclear. This is a result of the many domains that don't publish Sender ID records, or that have records giving unclear results.