Win11 24H2 Blocking NTLM for RDP and SMB

I have two laptops on the same domain. One has been running Windows 11 Pro for a while and even with a recent update to 24H2, has no problems connecting to remote RDP hosts or to my local NAS via SMB. The other laptop I just upgraded from Windows 10 22H2 to Windows 11 24H2 and lost the ability to connect via RDP or SMB.

The messages were always about failed NTLM connections.

Win11 Connection 1   Win11 Connection 2

Update See the August 21 update below for a simple solution.

Hours of analysis with three AIs (ChatGPT, Gemini, and Perplexity) had me checking all kinds of NTLM settings, SMB settings, cipher suites, etc. As far as I could see, all settings matched between the two laptops. One AI led towards the conclusion re. RDP that the TCP connection was failing before the authentication step, but I didn’t get far enough to confirm or fix that.

Then Perplexity cited this obscure thread about how re-installing the Windows Server Essentials connector solved the problem:

https://learn.microsoft.com/en-us/answers/questions/3892952/authentication-failed-because-ntlm-authentication

Well yes, the failing laptop probably had the Essentials 2016 connector installed. I uninstalled it when I decommissioned the 2016 Essentials server. I tried re-installing it, but the installation won’t finish if there is no 2016 Essentials server on the network.

The thread referenced the 2012 R2 Essentials connector, specifically WSEClient-x64.msi, available here:

https://www.microsoft.com/en-us/download/details.aspx?id=40285&msockid=28f752d53ba962a734eb47e73a936349

I installed that on my “bad” Windows 11 24H2 laptop. The installation finished without any prompts for server name etc. After a reboot, both RDP and SMB started working again. Amazing.

Essentials Errors

It’s interesting that, without any configuration, the Windows Essentials services are automatically set to Disabled:

Win11 Connection 3

Not so with the tasks. I started getting .NET crashes at every reboot on C:\Program Files\Windows Server\Bin\ClientOperator.exe. The stack trace mentioned FileBackup, which of course is not configured. Perplexity led me to the correct path for Essentials tasks:

Task Scheduler Library > Microsoft > Windows > Windows Server Essentials

The specific culprit is the File history Settings Synchronization task, but I’m disabling all of these:

Win11 Connection 4

Reference

These event logs, under Applications and Services Logs, are relevant for troubleshooting RDP connections:

Client side

  • Microsoft-Windows-TerminalServices-RDPClient/Operational
  • TerminalServices-ClientActiveXCore/Operational

Host (Target) side

  • Microsoft-Windows-TerminalServices-RemoteConnectionManager/Admin

And these more specific tips from Perplexity:

  • Microsoft-Windows-RemoteDesktopServices-RdpCoreTS/Operational

    • Look for errors around the time of your failed connection attempt. Event IDs like 143, 142, or 226 are relevant (especially related to connections, disconnects, and handshake failures).

  • Microsoft-Windows-TerminalServices-LocalSessionManager/Operational

    • Successful logins will yield events like ID 24 (disconnect), 25 (reconnect succeeded), and failures may appear as missed session starts.

  • Microsoft-Windows-TerminalServices-RemoteConnectionManager/Operational

    • Event ID 261 (“Listener RDP-Tcp received a connection”) appears even for failed handshakes—the server acknowledges an attempt, even if handshake fails.

Update August 21, 2025

By comparing registry values with and without the Essentials connector, I believe I’ve nailed down the cause of this issue.

TL;DR Export your current HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa registry as a backup. Try adding the key and values from #1 below. Reboot and see if you can connect.

1. If a Windows 11 24H2 machine never had the Essentials connector installed, it has this key:

[HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa\MSV1_0]
"Auth132"="IISSUBA"
"NtlmMinClientSec"=dword:20000000
"NtlmMinServerSec"=dword:20000000

Win11 Connection 5

RDP and SMB work correctly.

2. If a machine previously had the Essentials connector installed but it has been removed, this key is missing:

[HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa\MSV1_0]

RDP and SMB fail to connect.

3. If you re-install the 2012 R2 Essentials connector on the machine from #2, it adds this key:

[HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa\MSV1_0]
"BackConnectionHostNames"=hex(7):31,00,32,00,37,00,2e,00,30,00,2e,00,30,00,2e,\
   00,31,00,00,00,00,00

Note that this value of BackConnectionHostNames is a string representing the loopback address, 127.0..0.1.

Win11 Connection 6

RDP and SMB work correctly.

According to Perplexity, the MSV1_1 key “controls settings for the MSV1_0 authentication package, which implements NTLM (NT LAN Manager) authentication in Windows.” if this key is missing entirely (#2), NTLM now defaults to “deny.” If the key is present, even with a “benign” value like BackConnectionHostNames (#3), NTLM can work. I’ve found that using the value from a standard install (#1) also restores RDP and SMB functionality.

Orca

As further confirmation, I opened WSEClient-x64.msi in Orca, a developer tool for analyzing and changing installer files. Here you can see the place where the installer adds the BackConnectionHostNames registry value:

Win11 Connection 7

1 thought on “Win11 24H2 Blocking NTLM for RDP and SMB

  1. Mike Anderson

    It’s a powerful reminder that legacy components can still hold sway in unexpected ways. This will definitely be saved in my troubleshooting toolkit!

    [Advertising URL removed.]

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