Windows 2003 expands on the mixed mode/native mode functionality of Windows 2000 with functional levels. Windows 2000 included the ability to run NT4 BDCs in a Windows 2000 AD domain if it was in mixed mode. Windows 2003 includes this and expands on it to include forests. There are 3 forest functional levels and 4 domain functional levels.
The 4 domain functional levels are:
Windows 2000 Mixed
This is the default mode for new 2003 domains as well as those upgraded from Windows 2000 (unless the 2000 domain was in Native mode). This mode allows for Windows NT4 BDCs, and Windows 2000 and 2003 DCs. This mode is not able to take advantage of any of the new 2003 domain-wide features with the exception of universal distribution groups and distribution group nesting.
Windows 2000 Native
This is the default if you upgraded from a Windows 2000 domain that was in Native mode. This mode allows for Windows 2000 and 2003 domain controllers This mode can take advantage of a few more 2003 domain wide features including Universal Security groups, Security group nesting and group conversion. Group conversion allows you to convert a security group to a distribution group and back. This mode also allows for SID History which allows the migration of SID from one domain to another.
Windows 2003 Interim
This is the default mode if you are upgrading from NT4 domain to a Windows 2003 AD domain. It allows you to run NT4 BDCs along side your 2003 DCs. This mode has the same feature limitations as Windows 2000 Mixed mode.
Windows Server 2003
This mode requires all DCs to be running Windows Server 2003. You can still operate NT4 and 2000 member servers. This mode allows full use of all the new domain-wide features including Update logon timestamp and a password on the InetOrgPerson object. Along with those features, and all others already mentioned, you also have the ability to rename a domain controller.
To raise the domain functional level you need to ensure that all DCs are running Windows Server 2003 and that you have no plans to add NT4 BDCs or 2000 DCs to the domain. Raising the functional level is a one shot deal and you cannot go back. Once you have verified this, open up the Active Directory Domains and Trusts MMC and drill down to the domain. Right-click the domain name and select Raise Domain Functional Level.
Verify the domain name and the current functional level. Select the Windows Server 2003 level and click Raise.
The change will be made and replicated to all other DCs in the domain. You can verify the change was successful with the Support Tool LDP.EXE. From a command prompt run LDP.exe. Click Connection and then Connect, and click OK leaving all info as default. In the right pane look for the following section, I have highlighted it
1> domainFunctionality: 0 = Windows 2000 Mixed
1> domainFunctionality: 1 = Windows 2000 Native
1> domainFunctionality: 2 = Windows 2003 Interim
1> domainFunctionality: 3 = Windows 2003
For more information see:
Windows 2003 Functional Levels - Forest
Jan mailed me: she had her finger on the button, about to make the switch from mixed mode to native...
Tracked: Feb 20, 13:01