Hyper-V breaks DHCP

After I added the Hyper-V role to my Windows 2008 server and created a virtual network, my network clients were no longer able to obtain a lease from the DHCP server running on it.

It turns out Hyper-V makes some changes to your network adapter configuration. When you bind a virtual network to a physical adapter, Hyper-V creates a new 'virtual' adapter with the settings of the physical adapter. The physical adapter is re-configured with only the 'Microsoft Virtual Network Switch Protocol'.

If you check the bindings in the DHCP server configuration you will notice that the network adapter you created the virtual network on is no longer listed and of course if you have only one NIC, your DHCP server is no longer servicing clients.

For a quick fix, go into Hyper-V Virtual Network Manager and change the binding from 'External' to 'Internal only' or 'Private virtual machine network'

For a better solution, install a second NIC dedicated to your Hyper-V virtual network switch and leave the original NIC for all of your host OS networking.