I receive error 401.1 when I browse a Web site that uses Integrated Authentication

This is usually an issue to do with LoopBack, the address is 127.0.0.1 , this is often used for testing by IT Professionals, it will keeps the transferred information internally and not allows communications between networks thus causing the 401.1 Error to be thrown.

There are 2 Methods to deal with this, you can either Specifiy a host name (Preferred if NTLM Authentication is required) or just Completely disable to LoopBack Check:

Method 1: Specify host names (Preferred method if NTLM authentication is desired)

To specify the host names that are mapped to the loopback address and can connect to Web sites on your computer, follow these steps:

1. Set the DisableStrictNameChecking registry entry to. For more information about how to do this, click the following article number to view the article in the Microsoft Knowledge Base:
2. 281308 Connecting to SMB share on a Windows 2000-based computer or a Windows Server 2003-based computer may not work with an alias name
3. Click Start, click Run, type regedit, and then click OK.
4. In Registry Editor, locate and then click the following registry key:
   HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa\MSV1_0
5. Right-click MSV1_0, point to New, and then click Multi-String Value.
6. Type BackConnectionHostNames, and then press ENTER.
7. Right-click BackConnectionHostNames, and then click Modify.
8. In the Value data box, type the host name or the host names for the sites that are on the local computer, and then clickOK.
9. Quit Registry Editor, and then restart the IISAdmin service.

Method 2: Disable the loopback check (less-recommended method, to be used if Method 1 does not )

The second method is to disable the loopback check by setting the DisableLoopbackCheck registry key.

To set the DisableLoopbackCheck registry key, follow these steps:

1. Set the DisableStrictNameChecking registry entry to 1. For more information about how to do this, click the following article number to view the article in the Microsoft Knowledge Base:
   281308 Connecting to SMB share on a Windows 2000-based computer or a Windows Server 2003-based computer may not work with an alias name
2. Click Start, click Run, type regedit, and then click OK.
3. In Registry Editor, locate and then click the following registry key:
   HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa
4. Right-click Lsa, point to New, and then click DWORD Value.
5. Type DisableLoopbackCheck, and then press ENTER.
6. Right-click DisableLoopbackCheck, and then click Modify.
7. In the Value data box, type 1, and then click OK.
8. Quit Registry Editor, and then restart your computer.