Nested virtualization refers to the capability of running a virtual machine (VM) inside another VM. This technology has become increasingly important for developers testing cloud environments, sandboxing applications, or building multi-tiered lab setups.

Not all hypervisors support nested virtualization equally. Here's a breakdown of major platforms:

// Checking nested virtualization support in KVM
$ cat /sys/module/kvm_intel/parameters/nested
Y // Returns Y if supported

// Enabling nested virt in VMware ESXi
esxcli system settings kernel set -s vhv.enable -v TRUE

While technically possible, nested VMs typically suffer from:

• 20-30% performance overhead for CPU-bound workloads
• Higher memory pressure due to duplicated virtualization layers
• Potential I/O bottlenecks

Despite performance costs, nested virtualization shines for:

# Example: Creating nested VM in Azure (requires specific VM sizes)
az vm create \
  --resource-group myResourceGroup \
  --name myNestedVM \
  --image UbuntuLTS \
  --size Standard_D4s_v3 \
  --admin-username azureuser \
  --generate-ssh-keys

When nested virtualization fails, check:

1. BIOS settings for VT-x/AMD-V enablement
2. Hypervisor-specific configuration flags
3. Resource allocation to the parent VM

For better performance in development environments, consider:

• Containerization (Docker/podman)
• Lightweight VMs (Firecracker, gVisor)
• Cloud-based nested virtualization solutions

Running a virtual machine inside another virtual machine (nested virtualization) is indeed possible on modern hypervisors, though with important caveats. I've personally implemented this in both development and testing environments using KVM/QEMU on Linux and Hyper-V on Windows Server 2019.

Your host CPU must support VT-x (Intel) or AMD-V (AMD) with nested virtualization extensions. For Intel processors, you'll need:

# Check Intel VT-x and EPT support
grep -E 'vmx|ept' /proc/cpuinfo

# For AMD processors
grep -E 'svm|npt' /proc/cpuinfo

In BIOS, ensure:

1. Virtualization Technology is enabled
2. VT-d or AMD-Vi is enabled for IOMMU
3. Execute Disable Bit is enabled

On Linux with KVM, enable nested virtualization first:

# For Intel processors
echo "options kvm-intel nested=Y" > /etc/modprobe.d/kvm-intel.conf
modprobe -r kvm-intel
modprobe kvm-intel

# For AMD processors
echo "options kvm-amd nested=1" > /etc/modprobe.d/kvm-amd.conf

Then launch your nested VM with proper CPU flags:

qemu-system-x86_64 \
    -enable-kvm \
    -cpu host,migratable=off \
    -smp 4 \
    -m 4096 \
    -drive file=nested_vm.qcow2,format=qcow2

On Windows Server 2019/2022 or Windows 10/11 Pro:

# Enable nested virtualization for a VM
Set-VMProcessor -VMName "ParentVM" -ExposeVirtualizationExtensions $true

Then inside the parent VM, enable Hyper-V role and create child VMs normally.

Expect significant performance overhead (15-30% slower than native virtualization) due to:

• Double translation of virtual addresses
• Nested page table walks
• Additional context switches

For better performance:

# Use huge pages in KVM
echo 1024 > /proc/sys/vm/nr_hugepages
qemu-system-x86_64 -mem-path /dev/hugepages ...

I've used nested virtualization for:

1. Testing hypervisor configurations safely
2. Developing cloud orchestration tools
3. Creating portable development environments
4. Security research on VM escape vulnerabilities

If you encounter "kvm: disabled by bios" errors:

# Check nested virtualization status
cat /sys/module/kvm_intel/parameters/nested  # Should return 'Y'

For Hyper-V, ensure you're not running in Azure (nested virtualization isn't supported in most Azure VM sizes).