Issues doing a sysprep (in hyper-v environment)

Question

Installed Windows 11 on a Hyper-V virtual machine (VM) and completed the entire installation process. (host machine is also win11)

1st Boot to Desktop:

I then rebooted the system to initiate the sysprep process; entered Audit mode, rebooted, and confirmed.

Once back on the desktop in Audit mode, I customized the system according to my specifications, including driver installation, debloating, applying updates, installing applications, activating, and configuring settings.

When the system configuration met my requirements, I entered the System Out-of-Box Experience (OOBE); performed a shutdown; and executed the "Generalize" option in sysprep.

Then, I mounted the VHDX file and utilized DISM to create an install.wim file. I then used PowerISO to convert the WIM file into an ESD format. I took the resulting install.esd file and placed it into the 'sources' folder of a clean Windows 11 ISO, removing the original install.wim file.

Now, when I run setup.exe from within a Windows environment (for testing purposes), I encounter an error indicating, "Setup has failed to initialize the working directory."

If I utilize the newly created ISO for a fresh installation in Hyper-V, I am prompted with the 'Select Language Settings' > 'Keyboard Settings' > 'Select Setup Option' > 'Product Key' (I do not have a product key), followed by a 'Getting a few things ready' message and an error: "Windows 11 setup, Setup has failed to validate the product key." Despite using a valid key, the message persists stating, "This product key didn't work.

The same thing happens wheather or not I use install.wim or install.esd during the process.

Am sure there is a better method than the one I used. Any links to tutorials or anything to help?

Any help would be greatly received. Thanks!

*** Moved from Windows / Windows 11 / Recovery and backup ***

Answer 1

Hello  jnewcs，

Thank you for posting in Microsoft Community forum.

Setup Failed to Initialize the Working Directory

This error can sometimes be caused by insufficient space on the C drive or corrupted temporary files. Here are a few steps to try:

1. Check Disk Space:

 Ensure there is at least 20GB of free space on the C drive.

1. Delete Temporary Files:

Open the Run dialog (Win + R), type %TEMP%, and delete all files in the folder.

1. Run SFC Scan:

Open Command Prompt as an administrator and run sfc /scannow to check for and repair any corrupted system files.

Setup Failed to Validate the Product Key

This issue can be caused by various factors, including third-party antivirus software or missing configuration files. Here are some steps to try:

1. Disable Antivirus Software:

Temporarily disable any third-party antivirus software and try the installation again.

1. Run Activation Troubleshooter:

Go to Settings > System > Troubleshoot > Other troubleshooters, find the Activation troubleshooter, and run it.

1. Check for Updates:

Ensure your Windows 11 image has the latest updates installed.

I hope the information above is helpful.

If you have any question or concern, please feel free to let us know.

Best Regards,

Haijian Shan