Fix Virtual PC 2007 Shared Networking (NAT) Internet Not Working in Windows Server 2003, 2008 and Vista Guest OS
After installing Windows Server 2003, Windows Server 2008 and Windows Vista into Microsoft Virtual PC’s virtual machine (VM) (update to Virtual PC 2007 SP1) as guest operating system, and set the Networking Settings for the VM to use Shared Network (NAT) as the network adapter, the Internet appears to be not working where web browser (Internet Explorer, IE and Firefox) cannot connect, find, locate or browse to website.
However, when IP address is used, access to the external server on Internet may work. For example, ping, trace route, ftp, sftp, telnet and SSH using IP address instead of domain name or host name, user can successfully connecting to the remote server.
NAT (Network Address Translation) is an easy shared networking technique that masquerading or transceiving network traffic through a router that involves re-writing the source and/or destination IP addresses and the TCP/UDP port numbers of IP packets as they pass through. In the case of Virtual PC, it uses a virtual NAT router which built on host computer’s default active network connection to allow guest operating system to access Internet via the host’s Internet connection.
Shared Networking or NAT allows computers or hosts on a private network to access the Internet using a single IP address, without exposing the PCs (or virtual machines) to the external network, significantly reduce security risk. NAT is also useful to allow virtually unlimited number of IP addresses to connect to Internet, thus administrator is not limited by the amount of IANA assigned-IP address allocated space. Beside, Shared Network (NAT) allows user to easily plug and play or move the virtual machine or physical machine to different network configurations such as different Wi-Fi wireless access point, home or office network.
Most computers, including Virtual PC 2007 virtual machines can easily access Internet using Shared Networking, as easy as right after operating system is installed, which enable DHCP by default. So, the problem with Windows Server 2003, Server 2008 and Vista as guest OS cannot access Internet is by design. The Internet not working issue is caused by when the guest operating system queries for DNS Server from Shared Network (NAT) virtual router, the guest OS is configured to use the same DNS servers which are used by the physical host computer.
This is not the case with a Windows Server 2003 guest though. The problem is that Shared Networking configures the guest operating system to use the same DNS servers as are used by the physical computer. However, when actual DNS query resolving packets are been returned, it’s actually returned from the IP address of “192.168.131.254″, which is the virtual gateway used by Shared Networking (NAT).
Windows Server 2003, Windows Server 2008 and Windows Vista will reject any DNS resolution packets that are returned from a different source from than the DNS Server (both has different IP address) that it had requested the information from. As thus, all name resolution of domain name and URL fails, indirectly leads to the guest operating system appears to be cannot connect to Internet. Windows XP and older operating system is not affected by this behavior.
To fix the Shared Network (NAT) Internet no connection or not working issue, the resolution is to manually assign the IP address for the DNS Server for the guest operating system to 192.168.131.254, the virtual gateway IP address used by Virtual PC. To make the change (in guest operating system), open Network Connections folder (in Windows Vista, access via Network and Sharing Center), and right click Local Area Connection network icon to select its Properties. Then double click on Internet Protocl (TCP/IP) under General tab or Internet Protocol Version 4 (TCP/IPv4) under Networking (for Windows Vista) tab.

Click to select the radio button of Use the following DNS server addresses, and then type in 192.168.131.254 into the IP address box for Preferred DNS Server. Click OK twice to exit, and voila, the Shared Network (NAT) now works as it should with Internet access.
If you’re encountering this problem in Windows XP guest OS, it’s probably caused by invalid DNS server assigned by Virtual PC network adapter too.
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March 31st, 2009 07:06
Brilliant! Thanks a bunch
March 3rd, 2009 16:16
Another solution for those who tried the DNS solution above and failed. I ran into the same problem running VPC 2007 on XP SP3 (host) with 2k3 (guest) configuration. Using IE, for some reason I couldnt connect to windowsupdate to patch my 2k3 install. Strangely, I was able to connect to Google.com, but not to microsoft.com or windowsupdate. After mucking around with the network settings on the 2k3 instance, I found that 802.1x authentication was automatically checked. I unchecked this and instantly every website was accessible using IE.
February 21st, 2009 21:39
Exactly the info I need, thanks!
Sarit
February 19th, 2009 21:15
[...] I’ve since read that there are issues with NAT failing with Windows 2003 Server, but the failure there isn’t real but a DNS issue. This is well documented – including the fix – here. [...]
February 15th, 2009 02:36
This is really a good post. Thanks a ton.
February 12th, 2009 13:45
My Exprince:
if u use Dial-UP Modem u should first connect & then start the VM Consol.
February 2nd, 2009 00:19
You are one smart cookie. Worked like a dream with Windows 7 beta as guest on VPC 2007 SP1 on Vista business host.
January 25th, 2009 00:44
Great solution. I had problems with using the NAT in VPC 07 after I had installed Windows 7 beta. Seems like I forgot to update my Virtual PC to SP1. The install went fine, but I had problems with internet connectivity. Your solution worked for the Windows 7 beta.
Thank you, thank you, and thank you.
January 4th, 2009 09:49
Wow, great job on figuring this out man!!
I was pulling my hair out…I had XP set up and all was working fine in VPC2007, and the Server2003 just would not connect to the internet…made your change and that did it.
Thanks again!
Frank
January 2nd, 2009 05:43
Thank you.
November 19th, 2008 01:13
THANK YOU THANK YOU THANK YOU!!! This worked with my Windows Vista VM on M7
November 8th, 2008 02:42
Didn’t work for me, either. Fresh install of Windows 2008 Enterprise as guest on VPC 7 SP1 on XP SP3 host.
November 6th, 2008 19:59
I have installed windows 2003 server in in another drive D apart from windows xp which is in drive c.i am unable to access internet in windows2003 server through wireless connection,
even trusted sites also.
Any help will be great help.
October 31st, 2008 16:54
thanks so very much!!!!!!!!
worked like a charm!!host is winxp, guest is vista vm machine!
October 29th, 2008 02:47
Thank you, senor!
October 21st, 2008 18:01
Gee, I tried all that and it still wont work. I have Server 2003 Enterprise on the Virtual PC. The host os is Win XP professional. Did the NAT part and changed the DNS. but still not working. Any help please??
October 7th, 2008 07:47
Thanks a lot……………….
September 20th, 2008 10:13
Thank you! This worked but what a headache!
September 5th, 2008 21:44
I was very surprised, when it turned out, that NAT doesn’t work at all or STOPS WORKING AFTER FEW minutes.
I’m still wondering, why does NAT work sometimes for two, three minutes…
September 3rd, 2008 08:48
Nice tidbit and fix. I was getting annoyed until I found this.
August 21st, 2008 15:55
good, this was helpful, thanks.
July 31st, 2008 09:53
Thanks
This was helpful
July 26th, 2008 17:54
unhg
July 15th, 2008 06:06
Thanks, I had to enter 192.168.131.254 as dns server
July 8th, 2008 01:48
[...] Server 2003 or 2008 as guest operating system in VPC’s virtual machine, there is another DNS Server issue that cause unable to connect and browse the Internet problem, where resolution requires a manual set the DNS Server IP address to [...]