Hello Prasanna, I am Henry and I'd like to share some insights regarding the issue.
Since the issue started immediately after patching, it’s almost always related to CredSSP / NLA changes. You’re already reaching the credential prompt, which means networking and RDP listener are fine — the failure happens during session setup.
Step 1 – Client-Side Workaround (Most Common Fix)
Run this on your local machine (as Admin PowerShell/Command Prompt): REG ADD HKLM\SOFTWARE\Microsoft\Windows\CurrentVersion\Policies\System\CredSSP\Parameters /v AllowEncryptionOracle /t REG_DWORD /d 2 /f
This lowers the CredSSP enforcement level and usually restores connectivity.
Try reconnecting. If it works, plan to patch both client and server properly and later reset/remove this key.
Step 2 – Console Access to the VM
If Step 1 fails, log into the VM via your cloud provider/virtualization console.
Check Services: Remote Desktop Services (TermService) and dependencies are running.
Check Event Viewer: Look under
-
Windows Logs > System (TermDD/TermService errors)
-
Applications and Services Logs > Microsoft > Windows > TerminalServices-LocalSessionManager > Admin
This will usually show why the session setup fails.
Step 3 – Disable NLA Temporarily
On the VM:
- Right-click This PC > Properties > Remote settings.
- Uncheck "Allow connections only from computers running Remote Desktop with NLA".
- Apply, then retry RDP.
- If this works, it’s an NLA/CredSSP mismatch. Re-enable after fixing.
Step 4 – Rollback Problem Patch
If nothing else works:
- Go to Control Panel > Programs and Features > Installed updates.
- Uninstall the most recent patch.
- Reboot and retest RDP. (This restores access but weakens security until clients/servers are patched consistently.)
I hope you’ll give my recommendation a try and let me know how it goes.