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How to Fix '401 - Unauthorized: Access is denied due to invalid credentials' error after sharing a folder

This fix works for 2008 R2 servers but is also known to work for 2003.

If you are hosting websites and you share a folder that contains a websites data then a '401 - Unauthorized: Access is denied due to invalid credentials' error is triggered when trying to access the site online. This happens because sharing the folder strips it of all the default user accounts.

The fix:

Open up the folder that you shared and right click to get to its properties. Select the securites tab, click edit and then click add.
This opens up the select users or groups window. In here you want to type IUSR then click check name, this should underline allowing you to click ok which should solve the problem. The IUSR account allows people to access the website data on your server anonymously without having to create them a user account.