NTLM
Overview
In a Windows
Microsoft Windows
Microsoft Windows is a series of operating systems produced by Microsoft.Microsoft introduced an operating environment named Windows on November 20, 1985 as an add-on to MS-DOS in response to the growing interest in graphical user interfaces . Microsoft Windows came to dominate the world's personal...

 network, NTLM (NT LAN Manager) is a suite of Microsoft
Microsoft
Microsoft Corporation is an American public multinational corporation headquartered in Redmond, Washington, USA that develops, manufactures, licenses, and supports a wide range of products and services predominantly related to computing through its various product divisions...

 security protocols that provides authentication, integrity, and confidentiality to users.
NTLM is the successor to the authentication protocol in Microsoft LAN Manager
LAN Manager
LAN Manager was a Network Operating System available from multiple vendors and developed by Microsoft in cooperation with 3Com Corporation. It was designed to succeed 3Com's 3+Share network server software which ran atop a heavily modified version of MS-DOS.-Development history:LAN Manager was...

 (LANMAN), an older Microsoft product, and attempts to provide backwards compatibility with LANMAN
LAN Manager
LAN Manager was a Network Operating System available from multiple vendors and developed by Microsoft in cooperation with 3Com Corporation. It was designed to succeed 3Com's 3+Share network server software which ran atop a heavily modified version of MS-DOS.-Development history:LAN Manager was...

 . NTLM version two (NTLMv2), which was introduced in Windows NT 4.0 SP4 (and natively supported in Windows 2000), enhances NTLM security by hardening the protocol against many spoofing attacks, and adding the ability for a server to authenticate to the client.

Microsoft no longer recommends using NTLM in applications:

While Kerberos has replaced NTLM as the default authentication protocol
Authentication protocol
An authentication protocol is a type of cryptographic protocol with the purpose of authenticating entities wishing to communicate securely.There are many different authentication protocols such as:* AKA* CAVE-based_authentication...

 in an Active Directory
Active Directory
Active Directory is a directory service created by Microsoft for Windows domain networks. It is included in most Windows Server operating systems. Server computers on which Active Directory is running are called domain controllers....

 based single sign-on scheme
Single sign-on
Single sign-on is a property of access control of multiple related, but independent software systems. With this property a user logs in once and gains access to all systems without being prompted to log in again at each of them...

, NTLM is still widely used in situations where a domain controller
Domain controller
On Windows Server Systems, a domain controller is a server that responds to security authentication requests within the Windows Server domain...

 is not available or is unreachable.
 
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