You can do this with a simple Append Query using the IN Clause. See the example given below (Your original query, given at the begining of this thread, modified):
Code:
INSERT INTO Table2 IN 'C:\New folder\Database1.accdb'
SELECT Table1.*
FROM Table1;
OR
1. Start creating a new Query and place Table1 in the Query Design.
2. Change the Query Type to Append. A dialog box will open up.
3. Select Another Database option.
4. Use the Browse... Command Button and locate the target database and select it.
5. Now select Table2, of target database, from the drop-down box of Table Name control.
6. Click OK.
7. Save the Query and run it to append the data from current database into the target database.
You don't need to link table2 to the current database.
A Query design image, with the external file reference, is attached for info.