Linked Server Authentication Fails

[mjoseph111]

I’m running into an issue where SQL Server linked server queries no longer authenticate in the latest version of Power BI Desktop.

My questions:

1. Is this a known issue with the latest Power BI Desktop?

2. Has Microsoft removed or changed support for linked server authentication in Desktop?

3. Is there an official workaround or timeline for a fix?

4. Are others experiencing the same behavior?

Any updates, insights, or official links would be very helpful.
Thank you!

[mjoseph111 · Accepted solution]

Thank you everyone for your help. I tried all the above solutions, but the problem persisted.
To resolve the issue, I moved all direct SQL connections out of Power BI Desktop and rebuilt them in Power BI Dataflows. so dashboards no longer depend on Power BI Desktop for data access. I then updated each dashboard to use the Dataflow instead of connecting directly to SQL.

[v-hjannapu]

Hi @mjoseph111,

Good to hear that the issue is resolved.

If you face any other problems later, please feel free to reach out here. We will happy to help you.

Regards,
Community Support Team.

[kushanNa]

Hi @mjoseph111 

Some users recently mentioned that they experienced an authentication issue with SQL Server, which turned out to be caused by a DNS resolution problem.

Instead of using the server name, they used the server’s IP address, and that resolved the issue. So, if you're facing a similar problem, give that solution a try.

[mjoseph111]

Yea, im experiancing the same issue. sure , i will give it a try and let you know. Thank you so much!

[v-hjannapu]

Hi @mjoseph111,

Thanks for the update.
Yes, this issue is being seen after recent Power BI Desktop updates, mainly due to changes in connection security. Please try the suggested steps shared above and check if the connection works.

Once you test it, let us know the result. Based on that, we can guide you on the next steps.

Regards,
Community Support Team.

[v-hjannapu]

Hi @mjoseph111,
Have you tried the above steps shared earlier? If you have already checked and are still facing any issues, please let us know here and we will help you further.

Regards,
Community Support Team.

[Ritaf1983]

Hi @mjoseph111 

I haven't seen any widespread reports of a similar issue with the latest version, which suggests the behavior likely stems from local environment configurations or recent security hardening in Power BI Desktop's connection engine.

Below are the recommended technical solutions to address this:

1. Transition to OPENQUERY (Most Reliable)
The most effective way to resolve authentication issues between Power BI and Linked Servers is to use the OPENQUERY function. This forces the local SQL Server to manage the remote connection and credential delegation internally, rather than letting the Power BI engine attempt to negotiate the "Double Hop" to the remote node. Syntax: SELECT * FROM OPENQUERY([RemoteServerName], 'SELECT * FROM Database.Schema.Table')

2. Adjust Data Source Encryption Settings
Power BI Desktop has recently prioritized encrypted connections. If your SQL environment uses self-signed certificates or specific encryption protocols, the handshake may fail.

Go to File > Options and settings > Data Source settings.

Select the SQL Server source and click Edit Permissions.

Toggle the "Encrypt Connections" setting or ensure "Trust Server Certificate" is checked.

3. Verify OLE DB Driver Version
Power BI Desktop relies on the drivers installed on your machine. Ensure you are using the Microsoft OLE DB Driver 19 for SQL Server. Older versions may not be fully compatible with the security protocols enforced in the latest Power BI build.

4. Isolate Authentication Type
To determine if the issue is Kerberos/Double-Hop related, test the Linked Server connection using a SQL Server Login (Username/Password) instead of Windows Authentication. If SQL Authentication works, the issue is likely tied to credential delegation permissions in your network.

Official Support Escalation
If these steps do not resolve the issue, you should open an official support ticket:

Visit the Microsoft Fabric Support Portal.

Provide Trace Logs: Go to File > Options and settings > Options > Diagnostics and click "Enable tracing" before reproducing the error.

Detail whether the failure is exclusive to Power BI Desktop or also occurs when the report is published to the Service via a Gateway.

If this post helps, then please consider Accepting it as the solution and giving Kudos to help the other members find it more quickly

[MohitsinghMS]

Recent Power BI versions default the SQL connection setting Encrypt to True (or Strict). If your SQL Server (or the Linked Server behind it) uses a self-signed certificate, authentication will fail silently or with a generic credential error.

• Fix: In Power BI Desktop, go to File > Options and settings > Data source settings.

• Select your SQL Server data source > Edit Permissions.

• Uncheck "Encrypt connections" (or ensure the optional "Enable SQL Server Failover support" is unchecked if not needed, as it triggers stricter encryption checks).

• Alternative: When connecting, look for the "Trust Server Certificate" option and ensure it is checked.