Nested Group membership in Active Directory

Sometimes when you first install Windows server 2003 and active directory, you are unable to add a group to be a member of another group. In order to solve that problem just raise the domain functional level to Windows server 2003.

1- Right click the domain root node from the management console.

2- select “Raise Domain functional Level …

3- Choose Windows server 2003 under the current domain functional level.