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Remote Desktop Connection ‘Internal Error has occurred’

These applies to Windows 2012/2012R2 systems with previously working remote desktop connection where error started to appear without any configuration changes.
The error could be caused by mismatched security levels between RDP client and server after Windows security updates.


Try installing the latest security updates on the client and the VPS. 

If it didn’t help you may consider backing up data from you VPS and re-imaging your server with newer Operating system.  Proceeding to the next step will make your system vulnerable to attacks and should be considered as a temporary option.

Disabling RDP security

Disabling Network Level Authentication on your VPS

1. Login into your VPS using our built in Web console
2. Open ‘Control Panel -> System’ and click on ‘Change Settings’.
3. Click on ‘Remote’ tab.
4. Under Remote Desktop, un-tick the ‘Allow connections only from computers running Remote Desktop with Network Level Authentication’ box.
5. Click Apply and then hit OK.

See if it isolates the issue. If not proceed to the next step

Setting client connection encryption level

1. On your local machine, Go to the Start Menu, search for Local Group Policy and open up ‘Edit group policy’.
2. Navigate to the following directory: Computer Configuration > Administrative Templates > Windows Components > Remote Desktop Services > Remote Desktop Session Host > Security
3. Click on ‘Set client connection encryption level’ and enable it.
4. In the ‘Encryption level’ drop down box choose low level and click apply.

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