Excel Conditional Formatting greyed out

There are multiple worksheets in this document. One of the other worksheets had a group of cells highlighted/selected. Unselecting them allowed Conditional Formatting to be accessed.

In my case the Conditional Formatting was disabled because the xls file was in shared mode.

To enable Conditional Formatting, you first have to disable shared mode, go into Review, Share workbook, and unselect 'Allow changes by more than one user at the same time'.

Once you're done, you will probably want to share the workbook again.

Other scenario: the sheet was grouped with others, that was preventing the use of conditional formatting. Once the sheet was ungrouped, then it was possible to adjust the conditional formatting. Right click on the sheet name and 'ungroup sheets'