Recently I have started playing around a bit with Windows PCs. I needed to add a Microsoft KM-Loopback adapter on a Virtual Windows 10 Enterprise. As a primary Linux developer I had to faff around a bit before I could actually figure it out. So thought it may be helpful for someone to have it all in one place.
Add as new hardware
Though the loopback adapter is going to be a virtual interface, windows treats it as a new hardware. Hence, we need to add a new hardware in the system. To do that follow the steps described in the following sections.
Bring up the command promopt
Go to Start (Windows 10), type command, let the command prompt appear on the start menu search result (as below):

Run as administrator
Right click on the command prompt and click Run as administrator as below:

At this point it may ask for your admin user and password. Type those in and it should open the command prompt with admin privileges.
Bring up the add hardware wizard
In the command prompt type hdwwiz.exe and press Enter (shown below):

This should open you Add Hardware wizard as below (this how it looks in Windows 10 Enterprise):

Click Next. Then select “Install the hardware that I manually select from a list (Advanced)” as selected below:

Click Next.
Select the Hardware Type
At this point you will see a screen like the below:

Scroll down the list and go till you see “Network adapters” in the list, and when you see, select it as shown below:

Then click Next again.
Select Hardware Manufacturer
Now you should able to see a wizard window like the below:

On the left hand pane (Manufacturer list), scroll down and look out for Microsoft, and once you see it in the list, select it as shown:

Now scroll down the right hand side list and look for “Microsoft KM-TEST Loopback Adapter” in the list. Select it as shown below:

And then press Next. It will ask for a final confirmation as below:

Once you click Next, windows will create the adapter and the finish window will appear as below:

Click Finish in the last window.
Check the interface
Now Click Start > Control Panel:

Click “View network status and tasks” under Network and Internet and you should be able to see a window somewhat like the below:

The highlighted interface is the suspected newly created network adapter interface in the above screenshot.
Configure the interface
Now we need to configure the newly created adapter interface. The network configuration will depend on you and how you want to configure it. As an example I will assign an IP address 192.168.20.2/24 for the interface and will use 192.168.20.1 as the default gateway for the interface.
To configure the IP address we need to now click on the “Change adapter settings” on the left hand pane as shown below:

Once you click on the “Change adapter settings” option you should be able to see the available interfaces in the list. This is what I have in my VM PC at the moment:

Notice the first one in the list is marked as “Unidentified network” as probably because we haven’t configured the interface yet.
Open the properties
Right click on it and you should be able to see Properties in the drop down menu.

Click on the Properties and it will ask for admin user and pass. Type in the admin user and pass and it will present the Properties window for the interface:

Look for Internet Protocol Version 4 (TCP/IPv4), select it and click Properties:

Assign IP address
Click on Properties, select “Use the following IP address” radio button, type in the IP address you would like the interface to have (static IP assignment), type in the Subnet mask (in my case it is 255.255.255.0) and the default Gateway (192.168.20.1):

Type in the DNS server details as well. It will vary from setup to setup and hence I will not fill it in for now. Click Ok and you should have your KM-TEST adapter ready for use.
Hope I haven’t missed anything; however happy to hear from you in case I missed anything.
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