When installing and upgrading to Windows 7 from previous version of operating system such as Windows XP and Windows Vista with an upgrade license, media (either Windows 7 ISO image or DVD disc) and product key, the following error message may be displayed when entering the serial key during setup:

The product key is not valid. Please retype the product key.

Windows 7 Product Key Is Not Valid

The main reason for the above error to occur if mistyping of the product key, or the product key doesn’t match the version of Windows 7 that’s installed on the computer. If indeed the product key is correct and valid for the edition installed, then the error can also happens and stops installation from continue due to Windows 7 upgrade license requirement, when the following conditions are true:

  • An Upgrade version of Windows 7 is used during the install.
  • The computer has been formatted prior to running the install.
  • The install was started by starting the computer with the Windows 7 Upgrade DVD.

The first workaround to solve the problem above is NOT to enter any product key during installation,which automatically install Windows 7 as evaluation or trial version lasts for 30 days. However, if the user skips and bypass the product key validation by not entering the product key so that Windows 7 installation can continue and finalized, Windows 7 will prompt user to input a product key to activate the system when system is booted up. The following error may occur when user enter a Windows 7 upgrade version product key after Windows 7 is installed:

The following failure eccored while trying to use the product key:

Code: 0xC004F061

Description: The Software Licensing Service determined that this specified product key can only be used for upgrading, not for clean installations.

Windows 7 Upgrade License Activation Fail

Officially, Windows 7 Upgrade DVD product key can only be used when the previous qualifying Windows operating system of Windows Vista or Windows XP is currently installed on the hard drive, regardless of activation status. It means that end-user will have to be either running the Windows 7 upgrade from within the operating system or by restarting the computer, booting with the Upgrade DVD and selecting the Custom Install option with existing operating system intact.

For user who has already formatted the hard disk drive and wiped off the existing operating system prior to running the upgrade install of Windows 7, Microsoft recommends one of the following steps to upgrade the computer:

  1. Re-install the previous operating system and then run the install from within the old operating system.
  2. Re-install the previous operating system and then start the computer with the Upgrade DVD and select the Custom (advanced) -> Drive options (advanced) option to perform additional tasks, such as formatting the hard drive or installing to another hard drive.
  3. Proceed with the current installation without entering a product key. This will allow you to finalize the install of Windows 7 on the computer; however, user will not be able to activate the product without contacting Microsoft support.

However, all of the above methods is not a time-saving and easiest way to perform upgrade of Windows 7 though. There is easy hack to perform clean install of Windows 7 upgrade version, which details how to activate Windows after continuing to upgrade Windows 7 without entering a product key as step 3 above.

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  • Stilly

    Without calling MS there is ONE fix for this error. It is very simple to do.
    IF you use the upgrade disk to install windows 7 home premium and you install on a clean HD or boot from the disk and format the HD then when you install you need to ignore putting in a serial that came with the disk. Once installed if you enter your upgrade disk serial and you get the above error, the procedure is this:

    Run CMD as an admin.
    Type regedit
    once in registry editor navigate to the following:
    HKEY_LOCAL_MACHINE/Software/Microsoft/Windows/CurrentVersion/Setup/OOBE

    Look in that folder and look for an entry named MediaBootInstall
    Doubleclick it and change the value from 1 to 0
    Exit out of registry editor and while still in CMD type in the following:
    slmgr /rearm

    After a brief moment it SHOULD tell you that the command was successful
    RESTART the computer then go to your activation screen and choose to ACTIVATE windows.
    Now you should be able to put in your upgrade serial and all should be fine provided that it is legit… ELSE go get DAZ loader.

    Check and MATE a flying finger to MS for this crap and their stupid outsourced tech support.
    Stillyvision on You tube will have a video of this later this year.

  • blake

    Just use Daz boot loader (google search) and install one of its random keys. This will activate windows and require a restart. Run Daz bootloader again and uninstall the key and restart. When your computer is restarted go to control panel -> System and change the product key to your own.

    Problem solved, no need to install windows twice or not format your HDD.

    • Stilly

      You have obviously never had this problem. You can NOT change the key to an upgrade only key EVEN with DAZ 2.0.4. Stupid Win7 gives a VBS error with the same code…

      You can not have DAZ install the new key (upgrade only) with the crack (by choosing custom serial).

      You can not install the key on installation unless it is some sort of damn upgrade. In my case the hd with vista died so we just installed win7 with the new hd… Ignored the product key on install since it gave us crap. We figured we would take care of it later. Now I am trying to finalize it and I can either run a hacked serial or I can let them deal with Ahmediza Mohammad Ackbar at MS support who calls herself Lisa…

      I am going to try some more things now… F***ing MS…

  • Robert

    I had the same problem. My HD crashed so I figured that I'd install Windows 7 for my rebuild instead of reinstalling XP.

    Everything installed great until I clicked activate, at which time I was told this was for UPGRADE only. WTF? I have a legal copy of XP, but was not asked to insert the XP CD, a la how you upgrade MS Office when the older version isn't already installed, so what to do?

    None of these steps in this article worked for me. In fact, it blocked the key from further activation attempts! So I did the telephone activation instead. When Ahmed answered the phone, I explained that I was installing on XP (did not say that I was installing on a blank disk, did not want to engage in that hassle) and read him the numeric codes. He asked a couple of questions then issued the response. Worked fine.

    Now I'm activated. But MS sure made this a lot more difficult than necessary. And in the end, it doesn't prevent wholesale piracy. Just inconveniences the hell out of of honest people.

  • I had the same problem but fixed it by using the Windows 7 activation delay tweak available on Lifehacker.com, after applying the tweak I then re-entered my activation code which worked great. I was doing an upgrade from XP to Win 7 32-bit.It worked like a charm.