The solution is to modify the registry to disable the Loopback check as per Microsoft knowledge base article KB896861.
The loopback check security feature is designed to help prevent reflection attacks on a computer. Therefore, authentication fails if the FQDN or the custom host header that you use does not match the local computer name. Basically this is by design and you will need apply this “fix” if you want to access SharePoint from the server.
The knowledge base article has two methods in it to address the issue, I personally use Method 2 when related to SharePoint:
- Click Start, click Run, type regedit, and then click OK.
- In Registry Editor, locate and then click the following registry key:
- Right-click Lsa, point to New, and then click DWORD Value.
- Type DisableLoopbackCheck, and then press ENTER.
- Right-click DisableLoopbackCheck, and then click Modify.
- In the Value data box, type 1, and then click OK.
- Quit Registry Editor, and then restart your computer.
Warning: Please be careful when editing the registry.