Sometimes as a developer, it’s necessary to setup a website on your local IIS system to use NTLM or Windows based authentication. In an effort to make things a bit more secure in the OS, Microsoft has also made things a bit more difficult for developers when trying to setup NTLM locally for a specific website.

If you find yourself getting a 401.1 error after configuring a local website to use Windows based authentication, follow the directions here and use option 1 if you can.