The row broke out over the inclusion of Microsoft's rival XML Paper Specification (XPS) document format in the company's software.
"Unfortunately, Adobe has been pushing for us to remove XPS from Windows," Andy Simonds, Microsoft group product manager for Windows digital documents, said in a posting on his blog.
"Given the clear benefits of XPS to customers and partners, this is something we cannot do."
Chris Harris-Jones, principal analyst at Ovum, said: "One of the big concerns of Adobe is that if you can create PDF files directly from Microsoft Word, which is a pretty sophisticated word processing package, then you don't need to buy Acrobat.
"This has the potential to hugely damage Adobe's Acrobat revenues."
Harris-Jones added that users wanting advanced PDF features such as security would still need to buy Acrobat, but the majority of users would be happy creating files using Office.
The latest beta version of Microsoft Office on general release to the public included the Save As PDF feature.
However, in a further move that seems destined to avoid future anti-trust lawsuits, Microsoft said it will allow OEMs to remove XPS from the software if they want to.
Simonds confirmed that support for both XPS and PDF formats will be available for users as a free add-on download if they want it.
"One thing I will add, is that the Office team is making both PDF and XPS 'save-as' support as free downloads instead of built into Office directly," he said.
"This is too bad, but is designed to try and resolve any concerns Adobe has with XPS or PDF functionality as part of Office."
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