Microsoft Virtual Server 2005 R2 is the highly cost-effective virtual machine solution designed for Windows Server 2003 to increase operational efficiency in software testing and development, server consolidation scenarios, and application.

The last version using this name was Microsoft Virtual Server 2005 R2 SP1. New features in R2 SP1 include Linux guest operating system support, Virtual Disk Precompactor, SMP (but not for the guest OS), x64 host operating system support, the ability to mount virtual hard drives on the host machine and additional operating systems support, including Windows Vista. It also provides a Volume Shadow Copy writer which enables live backups of the Guest OS on a Windows Server 2003 or Windows Server 2008 host. A utility to mount VHD images has also been included since SP1. Virtual Machine Additions for Linux are available as a free download. Officially supported Linux guest operating systems include Red Hat Enterprise Linux versions 2.1-5.0, Red Hat Linux 9.0, SUSE Linux and SUSE Linux Enterprise Server versions 9 and 10.