InformationLAN Manager (LM) was a family of early Microsoft client/server software (predating Windows NT) that allowed users to link personal computers together on a single network. LM network capabilities included transparent file and print sharing, user security features, and network administration tools. In Active Directory domains, the Kerberos protocol is the default authentication protocol. However, if the Kerberos protocol is not negotiated for some reason, Active Directory will use LM, NTLM, or NTLMv2. LAN Manager authentication includes the LM, NTLM, and NTLM version 2 (NTLMv2) variants, and is the protocol that is used to authenticate all Windows clients when they perform the following operations:
Join a domain
Authenticate between Active Directory forests
Authenticate to down-level domains
Authenticate to computers that do not run Windows 2000, Windows Server 2003, or Windows XP
Authenticate to computers that are not in the domain
The Network security: LAN Manager authentication level setting determines which challenge/response authentication protocol is used for network logons. This choice affects the level of authentication protocol used by clients, the level of session security negotiated, and the level of authentication accepted by servers.
The recommended state for this setting is: Send NTLMv2 response only. Refuse LM & NTLM.
Windows 2000 and Windows XP clients were configured by default to send LM and NTLM authentication responses (Windows 95-based and Windows 98-based clients only send LM). The default settings in OSes predating Windows Vista / Windows Server 2008 (non-R2) allowed all clients to authenticate with servers and use their resources. However, this meant that LM responses - the weakest form of authentication response - were sent over the network, and it was potentially possible for attackers to sniff that traffic to more easily reproduce the user's password.
The Windows 95, Windows 98, and Windows NT operating systems cannot use the Kerberos version 5 protocol for authentication. For this reason, in a Windows Server 2003 domain, these computers authenticate by default with both the LM and NTLM protocols for network authentication. You can enforce a more secure authentication protocol for Windows 95, Windows 98, and Windows NT by using NTLMv2. For the logon process, NTLMv2 uses a secure channel to protect the authentication process. Even if you use NTLMv2 for older clients and servers, Windows-based clients and servers that are members of the domain will use the Kerberos authentication protocol to authenticate with Windows Server 2003 or newer Domain Controllers. For these reasons, it is strongly preferred to restrict the use of LM & NTLM (non-v2) as much as possible.
SolutionTo establish the recommended configuration via GP, set the following UI path to: Send NTLMv2 response only. Refuse LM & NTLM:
Computer Configuration\Policies\Windows Settings\Security Settings\Local Policies\Security Options\Network security: LAN Manager authentication level
Clients use NTLMv2 authentication only and use NTLMv2 session security if the server supports it; Domain Controllers refuse LM and NTLM (accept only NTLMv2 authentication). Clients that do not support NTLMv2 authentication will not be able to authenticate in the domain and access domain resources by using LM and NTLM.
Send NTLMv2 response only. (Clients use NTLMv2 authentication only and use NTLMv2 session security if the server supports it; Domain Controllers accept LM, NTLM & NTLMv2 authentication.)