How-To Personal

VMware vSphere 6.5 Nested Virtualization – Create and Install ESXi 6.5

With vSphere 6.5 and nested ESXi 6.5 hosts I enable myself to get hands on with vSphere advanced features with vCenter without having the physical hardware in my home lab. The advantages to this setup allows me to test out new VMware features or simulate issue that could happen in production.

The term “nested virtualization” is used to describe a hypervisor running under another hypervisor. In this case, I will be installing ESXi 6.5 inside a virtual machine hosted on a physical ESXi 6.5 host.


  • Physical ESXi Host (ESXi 6 – 6.5 – )
  • Physical hardware supporting either Intel EPT or AMD RVI

Steps to setup ESXi 6.5 virtual machine guest:

Log into vCenter or ESXi host with a user with admin credentials. In my case I am using the vSphere web client. *spoiler alert* no more C# (Thick) client for vCenter. However it still works with the ESXi 6.5 hosts.

Switch to the “VMs and Templates” view. Right click a folder and select New Virtual Machine > New Virtual Machine…

Choosing “Custom” configuration select type Other for OS family, doing the same for Guest OS version. *note* Ensure you are choosing 64-bit (Other 64-bit)

Once at the configuration hardware screen; Make a few modifications to the default values.

VM Guest Configuration Settings:

  • Define the CPU to a minimum of 2 or more. This includes cores.
  • Define memory to a minimum of 6GB RAM
  • Define Disk to 2 GB (Thin Disk)
  • Change network adapter type to VMXNET 3
  • Add an addition network adapter (also VMXNET 3)

Additional Configuration Step: Enabling support for 64-bit nested vms

Locate the and expand the CPU properties page and tick the check box next to “Expose hardware assisted virtualization to the guest OS”. This setting will allow you to 64-bit vms inside nested ESXi hosts. Read more about this feature here:

Click next and exit configuration

At this point you are ready to install ESXi 6 – 6.5 as a Guest VM.

I leave you with this video of the full process. Thanks for visiting and I hope this helps any of you looking to do the same.

[youtube id=”oBkzhpcXQ-c” width=”600″ height=”350″]


Originally posted on my LinkedIn Page:

13 replies on “VMware vSphere 6.5 Nested Virtualization – Create and Install ESXi 6.5”

Hey David, Sorry for the delay. You know you have a good idea and I am amazed that I have no done so.
I will do just that and hope to have it posted by week end.


Jermal (#jermsmit)

Hi Jermal,

During the initial setup process for the nested instance, is there a specific reason to select Other instead of ESXi 6.5? Either way I’d assume we would end up selecting the same ISO from the datastore? Sorry for the noob question!

As I recall; selecting the the machine type ESXi did allow for me to install ESXi, however it did not enabled options to run 64bit nested guest. That was the limitation I encountered

Thanks for visiting this blog. If you don’t mind sharing. Why are you nesting in your environment?
** I did as I wanted to get hands on with setting up vSAN **

Thanks for this. The only issue I seem to have is that guest disk information is not available for my nested host nor for the VMs I create on the nested host. Also, I had to select paravirtualization for the nested host’s disk.

I do believe that would be the case. There are a few posts floating around about installing the tools.
I didn’t see this as much of a problem in my env~ as I was just testing

I encountered this issue and needed to enable promiscuous mode and forged transmits.

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