In IIS, here’s how to troubleshoot the following error:
401 – Unauthorized: Access is denied due to invalid credentials
First check the NTFS permissions on the file that you’re trying to server from IIS. It should at least have read permissions for the type of authentication you are trying to use to connect to the website. Next, check the Basic Settings, Connect As properties of the website in IIS. If an account is specified, does that account have read access in NTFS? Is the account disabled or password expired, etc? If the Application Pool is selected, check the Advanced Settings of the application pool running the IIS website. What Identity is the application pool running as? If the application pool identity isn’t running as a specified user, then it’s just whatever account is used to run the World Wide Web Publishing service (check services.msc to see the log on account). Does the account that’s running the application pool (or service) have at least read access?
Failing all the above, if you still get 401 – Unauthorized: Access is denied due to invalid credentials, then go to the website in IIS and click on the type of access you are trying to connect with (typically anonymous access if you don’t expect users of the website to enter a username / password to view the website). Click Edit (just below the Disable link) and check the account running it has at least read access.