Gateway connection error

[a-vdarute]

Unable to update connection credentials. The on-premises data gateway's service account failed to impersonate the user.
 Kindly help me resolve this error. 

[a-vdarute]

Hi,
 My machine is Azure AD Joined only (via Intune) – NOT domain joined. now i have NT SERVICE\PBIEgwService account, Gateway is running under NT SERVICE\PBIEgwService, when I tried to connect dataset with windows authentication(with my work account) it is throughing bellow error : 

Unable to create connection for the following reason: There was an error in the data gateway.

Details: Partner_wise_dashboard: The input is not a valid Base-64 string as it contains a non-base 64 character, more than two padding characters, or an illegal character among the padding characters.
kindly suggest a solution.

[v-achippa]

Hi @a-vdarute,

Thank you for the response and clarification. Since your machine is Azure AD joined only, windows authentication is not supported in this configuration. Because windows authentication requires a proper Active Directory domain join to enable user impersonation.

• Switch the data source to use sql authentication instead of windows authentication. This does not require domain join and will work correctly with your current setup.

Thanks and regards,

Anjan Kumar Chippa

[v-achippa]

Hi @a-vdarute,

Thank you for reaching out to Microsoft Fabric Community.

Thank you @rohit1991 for the prompt response. 

As we haven’t heard back from you, we wanted to kindly follow up to check if the solution provided by the user for the issue worked? or let us know if you need any further assistance.

Thanks and regards,

Anjan Kumar Chippa

[v-achippa]

Hi @a-vdarute,

We wanted to kindly follow up to check if the solution provided by the user for the issue worked? or let us know if you need any further assistance.

Thanks and regards,

Anjan Kumar Chippa

[rohit1991]

Hii @a-vdarute 

This error usually occurs when the on-premises data gateway service account does not have permission to impersonate the user credentials used for the data source. Make sure the gateway is running under a domain service account (not Local System), that this account has Log on as a service rights, and that the authentication method matches the data source (for example, use SQL authentication if Kerberos delegation isn’t configured). After updating permissions, restart the gateway service and re-enter the credentials in the Power BI Service.

[a-vdarute]

Thank you for your response, @rohit1991 .

I have followed all the steps you suggested, including granting the required permissions to the gateway service account and restarting the On‑premises Data Gateway service. However, I am still encountering the same error.

[rohit1991 · Accepted solution]

Hii @a-vdarute 

If the error still persists after assigning permissions and restarting the gateway, the most likely cause is a Kerberos / impersonation mismatch between the gateway and the data source. As a next step, try switching the data source to use explicit credentials (for example, SQL authentication instead of Windows), or configure Kerberos delegation (double-hop) correctly if Windows authentication is required. Also verify that the same gateway is mapped to the dataset, the service account password hasn’t changed, and re-add the data source in the gateway cluster before updating credentials again.