401 - Unauthorized: Access is denied error from web app running in IIS 7.5 using App Pool Identity

Posted by Eric Gatesman on Server Fault See other posts from Server Fault or by Eric Gatesman
Published on 2011-03-24T18:50:26Z Indexed on 2012/06/06 4:42 UTC
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I have an ASP.NET app on a Windows 2008 server, IIS 7.5.

When I try to access web site, I get a login popup. If I click "cancel" I get a 401 - Unauthorized: Access is denied due to invalid credentials. The app is using Windows authentication (anonymous is disabled).
The app has it's own app pool, running under the App Pool Identity. If I change the app pool to run under the NetworkService account, my website functions just fine.

I'm guessing that this is just a permissions issue, but can't figure out what permissions I need to change.
I gave the App Pool Identity permissions on the physical directory of the app, but that didn't solve the problem.

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