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From the author of Step 3: Configure MS-CHAP on the Client

Step 3: Configure MS-CHAP on the Client

Let’s configure your client to connect to the VPN server using a more complex level of authentication—user name and password verification. This will be MS-CHAP II.

  1. Go to the Windows XP computer
  2. Right-click My Network Places and select Properties to find your VPN adapter. If it is not there, create a new one, and point it towards your existing VPN server.
  3. Right-click the VPN adapter and select Properties.
  4. Click the Security tab and select Advanced (Custom Settings).
  5. Click the Settings button. This opens the Advanced Security Settings dialog box.
  6. Make sure that Require Encryption is selected in the Data Encryption drop-down list, and that the Microsoft CHAP (MS-CHAP) and Microsoft CHAP Version 2 (MS-CHAP v2) check boxes are selected, as shown in Figure 3. MS-CHAPII is already accepted by the server. MS-CHAPII will now be your challenge authentication scheme; it will work automatically.

Figure 3 The Advanced Security Settings dialog box.

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