1004 The terminal server cannot issue a client license



I have recently activated my 2000 terminal server licensing as it was past
the 90 day mark and was not allowing any new connections to it from our XP
pro clients. However it still will not allowing any new connections.

The license server is on the same domain on the DC and is visable from the
termainal server and the clients.

When clients try to connect they get error "The remote computer disconnected
the seesion because of an error in the licensing protocal" I then get the
follwing error on the TS "1004 The terminal server cannot issue a client

As far as I know I do not have to install a licensing program such as
'Select' or 'Open' as it's 2000 server with XP clients.

Any ideas?

Vera Noest [MVP]

That's correct, with XP Pro clients, you do not need to install
licenses, an activated TS Licensing Server is enough.
Have you verified that the TS can locate the LS?

As a test, can you remove the locally stored temporary license
(which is now expired) from one of the XP clients, and then check
if you can connect *twice*? The first connection always uses a
temporary license, on the second connection, the client should
receive one of the "Existing Windows 2000 Per Device TS CAL
Tokens". You can monitor this behaviour in the TS Licensing

187614 - Removing Terminal Server Licenses from an RDP Client
Vera Noest
MCSE, CCEA, Microsoft MVP - Terminal Server
TS troubleshooting: http://ts.veranoest.net
SQL troubleshooting: http://sql.veranoest.net
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All fixed. In the registry on the TS i needed to set the prefered license
server.I found this article:-

Using the registry


Click Start, click Run, type regedit, and then click OK.


Locate, and then click, the following key in the registry:



On the Edit menu, point to New, click Key, and then type LicenseServers to
name the new key.


Locate, and then click, the following key in the registry:



On the Edit menu, point to New, click Key, and then type ServerName where
ServerName is the NetBIOS name of the license server that you want to use,
and then press ENTER.

The new key name can be any of the following designations that represent the
license server:

The NetBIOS name of the server

The fully-qualified domain name (FQDN) of the server

The IP address of the server


Restart your computer


Dec 16, 2008
Reaction score

Thank you very much for taking the time to post this solution. It worked for me too. Great find!.

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