Create a WS2016 Nano Server Hyper-V VM

Setting up a Nano Server VM requires running some PowerShell. The instructions that I found out there aren’t that clear for a non-PowerShell guru , are wrong, or are incomplete. So let me clear up everything by showing you exactly what I am using to deploy Nano Server as a Windows Server 2016 (TPv3/Technical Preview 3) Hyper-V virtual machine.

Note: The process will probably change after I published this post.

Step 1 – Make Folders

Create three folders on a computer with a fast disk. Note that I’ll use C: but maybe you should use a D: or something.

  • C:\Nano
  • C:\Nano\Base
  • C:\Scripts

Step 2 – Copy Scripts

Mount the WS2016 ISO – let’s assume that it mounts as E:. Copy two scripts from E:\NanoServer from the ISO to C:\Scripts:

  • new-nanoserverimage.ps1
  • convert-windowsimage.ps1

Step 3 – Dot The Scripts

Note that I missed out on this step because I had never encountered this sort of thing before – I’m an advocate of PowerShell but I’m no guru! If you do not run this step, New-NanoServerImage.ps1 will do nothing at all and wreck your head for 3 hours (it did for me!).

Open a PowerShell window with elevated privileges. Navigate to C:\Scripts. Run the following:

. .\convert-windowsimage.ps1

I know – it looks funny. Enter it exactly as above. This appears to load the contained script as a cmdlet that can later be executed.

Do the same again for New-NanoServerVHD.ps1:

. .\new-nanoserverimage.ps1

Now we can build a new VHD with Nano Server pre-installed.

Step 4 – Create a VHD

You can now run New-NanoServerImage. Here’s what I ran:

New-NanoServerImage -MediaPath e:\ -BasePath C:\Nano\Base -TargetPath C:\Nano\Nano1 -GuestDrivers -ComputerName "Nano1" -DomainName "prev.internal" -EnableIPDisplayOnBoot -AdministratorPassword (convertto-securestring -string "AVerySecurePassPhrase" -asplaintext -force) -EnableRemoteManagementPort -Language EN-US

The above will prep a VHD with a VM called Nano1. I have configured the VM to join the prev.internal domain – note that this will require me to have suitable domain creds – a computer account is created in the domain. I enabled the Hyper-V guest drivers and allowed the IP of the VM to appear on the console. The VHD will be stored in C:\Nano\Nano1. Note that if this folder exists then the process will abort:

WARNING: The target directory already exists. If you want to rebuild this image, delete the directory first.
WARNING: Terminating due to an error. See log file at:

Note that I had to specify EN-US because, at this time, my default region of EN-IE was not available:

WARNING: The ‘en-ie’ directory does not exist in the ‘Packages’ directory (‘g:\NanoServer\Packages’).
WARNING: Terminating due to an error. See log file at:

I could have added other roles/packages to the VHD such as:

  • -Storage: For a SOFS cluster.
  • -Compute: To enable Hyper-V … useful when TPv4 (we guess) introduces guest virtualization.
  • -Clustering: To enable failover clustering in the VM.
  • -Defender: Adding security to the guest OS.

A minute or so later, a 439 MB was created in the newly created C:\Nano\Nano1.

Recreating a Nano Server VM

If you’re playing with Nano Server in a lab then you’ll create VMs with name reuse. If you do this with domain join then you might encounter a failure:

WARNING: Failed with 2224.
WARNING: Terminating due to an error. See log file at:

Open the log and you’ll find:

Provisioning the computer…

Failed to provision [Nano1] in the domain [prev.internal]: 0x8b0.

It may be necessary to specify /REUSE when running

djoin.exe again with the same machine name.

Computer provisioning failed: 0x8b0.

The account already exists.

That’s one of those “ding-ding-ding aha!” moments. The computer account already exists in AD so delete the account and start over.

Creating Additional VMs

Once you have run the above process, C:\Nano\Base will be populated with files from the ISO (\NanoServer). This means that you can drop the -MediaPath flag and eject the ISO.

New-NanoServerImage -BasePath C:\Nano\Base -TargetPath C:\Nano\Nano2 -GuestDrivers -ComputerName "Nano2" -DomainName "prev.internal" -EnableIPDisplayOnBoot -AdministratorPassword (convertto-securestring -string "AVerySecurePassPhrase" -asplaintext -force) -EnableRemoteManagementPort -Language EN-US

Step 5 – Move the Computer Account

In AD, move the computer account for the new Nano server to the required OU so it get’s any requierd policies on the first boot – remember that this sucker has no UI so GPO and stuff like Desired State Configuration (DSC) will eventually be the best way to configure Nano Server.

Step 6 – Create a VM

The above process prepare a VHD for a Generation 1 virtual machine. Create a Generation 1 VM, and attach the VHD to the boot device. Connect to the VM and power it up. A couple of seconds will pass and a log in screen will appear:


Log in with your local admin or domain credentials and you’ll be greeted with the console. Note that I enabled the IP address to be displayed during the setup:


Step 7 – Manage the Nano Server VM

If you want to do some management work then you’ll need to:

  • Wait for the eventual remote management console that was quickly shown at Ignite 2015.
  • Use PowerShell remoting.
  • Use PowerShell Direct (new in WS2016).

If you have network access to the VM then you can use remoting:

Enter-PSSession -ComputerName Nano1 -Credential prev\administrator

Troubleshooting network issues with Nano Server can be a dog because there is no console that you can log into. However … you can use PowerShell Direct with no network access to the VM, via the Hyper-V guest OS integration components:

Enter-PSSession -VMName Nano1 -Credential prev\administrator

Tip: Most AD veterans start network troubleshooting with DNS – it’s nearly always the cause. In my lab, I have 3 domains, so 3 sets of DNS. My DHCP scope sets up on domain’s DNS server as the primary, and that can cause issues. Some PowerShell Direct to the VM with some Set-DnsClientServerAddress sorted things out.

4 thoughts on “Create a WS2016 Nano Server Hyper-V VM”

  1. Nice! How about an article how to run a Hyper-V Host using a Nano VHD? Ben Armstrong has a short article on MSDN blogs about it, but what are those BCDEDIT steps?

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