MS IIS7 - loopback on Authentication of Virtual Directory

I have some site "site1" and Virtual Directory under it "VD1".
I set Anonymous authentication on "site1" and Windows Integrated on "VD1".
Despite I put correct user and password, it seems forever loop of such user/pass prompt is happening.

Why? How to disable it?

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Brad HoweDevOps ManagerCommented:
You settings should be fine.

SITE can be anon with windows disabled
VD1 can be anon disabled with windows

In this case only VD1 should prompt for authentication.

How are you accessing the application?  http://server.ip.addr/VD1/page.aspx, http://servername/VD1/page.aspx?

Have you tried adding the Web site to the list of trusted intranet sites?

If you attempt it from the server itself using a local account does it authenticate?

let us know,
longjumpsAuthor Commented:
Yes I get Authentication of VD1, only (I guess...)

I browse application as http://site1/VD1/  or http://site1/VD1/mypage.html

I added to trusted sites, but didn't help.

I succeed to browse this only from outside of the server.
However once I am inside of this server never ended loop of Authentication is going ...

Please advice.
Brad HoweDevOps ManagerCommented:
It is Microsofts Loopback authentication. Happens frequently with Sharepoint.

So if it works even when you try from a host that is not the server itself. If this is a Production server then option 1 is preferred where you add the .

Else you can disable the loopback check.

Option 2: Add this registry entry manually
1. Click Start, click Run, type regedit, and then click OK

2. In Registry Editor, locate the following registry key:

3. Right-click Lsa, point to New, and then click DWORD Value. (In Win 2008, its DWORD 32bit)
       Type DisableLoopbackCheck, and then press ENTER.

4. Right-click DisableLoopbackCheck, and then click Modify.
       In the Value data box, type 1 and then click OK.

5. Quit Registry Editor.

6. You may need to restart your server.


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As long as the server isn't internet exposed, DisableLoopbackCheck is cool, but is a risk.  You might want to consider only 'opening' up the DNS name of the site, rather than disabling it all.  
longjumpsAuthor Commented:

Just 2 words what is "Microsofts Loopback authentication" and why it may be required?
It's a fix that MS put in several years ago to prevent a hacker from using an IIS page to authenticate against the server itself (locally) and gain access to additional resources.  NTLM authentication is disabled for any name except the NETBIOS name of the server.  Most webservers use an alternate name "http://intranet" as opposed to "http://spwfe01".  

Everything works fine from a client machine using the DNS name, but the server itself cannot use that alternate name unless you specifically allow it or disable the check.

It often hoses SharePoint seach too!
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