The program w3wp.exe, with the assigned process ID, could not authenticate locally by using the target name HTTP/WEBSITENAME.

You may face this error when you are running your development environment on virtual server where you have also configured alternate access URL-s.The full message is something like this: “The program w3wp.exe, with the assigned process ID, could not authenticate locally by using the target name HTTP/WEBSITENAME. The target name used is not valid. A target name should refer to one of the local computer names, for example, the DNS host name. Try a different target name.”

applocix blog posting w3wp.exe unable to authenticate on target name helps us out:

1. Go to REGEDIT and open the key HKEY_LOCAL_MACHINE\SYSTEM\CurrentControlSet\Control\Lsa\MSV1_0
2. Right click MSV1_0 –> New -> Multi-String Value
3. Type BackConnectionHostNames and click Enter.
4. Right click on newly created value and select Modify.
5. Enter the hostname of the site: WEBSITENAME (and on a new line enter the FQDN, WEBSITENAME.domain.com)
6. Restart IIS

This way I got my internet zone host name work on my virtual server.