New transaction cannot enlist in the specified transaction coordinator

I was tying to set up a special feature in the software I work with that involved linked servers. This was test setup so I configured some SQL servers I already had set up and ran into this error.

[OLE/DB provider returned message: New transaction cannot enlist in the specified transaction coordinator. ]
OLE DB error trace [OLE/DB Provider 'SQLOLEDB' ITransactionJoin::JoinTransaction returned 0x8004d00a].
Msg 7391, Level 16, State 1, Line 2
The operation could not be performed because the OLE DB provider 'SQLOLEDB' was unable to begin a distributed transaction.

The only message the application gave me was the first line but I uncovered a sql command that let me test it without the overhead of running my application. Here is that command:


BEGIN DISTRIBUTED TRANSACTION
select * from linkname.databasename.dbo.tablename
COMMIT TRAN

I was able to get the inner command to run on its own. As a distributed transaction, it would fail every time.

I eventualy found this KB from microsoft to get me in the right direction. http://support.microsoft.com/kb/839279

You may receive a 7391 error message in SQL Server 2000 when you run a distributed transaction against a linked server after you install Windows Server 2003 or Windows XP Service Pack 2

It turned out to be a settings issue with the Microsoft Distributed Transation Cordinator (MS DTC). I had no idea what that realy was. It turns out MS DTC should be enabled when SQL is installed but by default its locked down (or is with 2003/xp sp2).

I used dcomcnfg to get to the component services. Console Root -> Component Services -> Computers -> My computer -> Properties . On the Default properties enable distributed COM on the computer. Under MSDTC -> Security Configuration check the option for Network DTC Access.

I did make those changes on both servers, I don't know if that was needed or not. I did the linked server last and it worked as soon as I applied the changes. I know those were the exact changes I made on the 2nd server. The first one prabably has every thing checked or opened up trying to figure it out.

Other thing you may try if having issues it to make sure the Distributed Transaction Coordinator is running as network service and not local system. Reinstalling it as a service and rebooting were a few other tips I read while trouble shooting this problem.