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LSA required for impersonation has failed to initialize error in trace logs when using Windows Impersonation

Symptom:

I configured Windows Impersonation for my Agent for SharePoint, but it is not working. The following message appears in the Agent for SharePoint trace log file:

LSA required for impersonation has failed to initialize. No impersonation is being performed.

Solution:

Verify that Integrated Windows Authentication is disabled in the IIS Manager for each SharePoint Web Application that you want to protect with Windows Impersonation.