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The domain functional levels are the various states of a domain, which enable domain-wide Active Directory features within a network environment. Domain levels are the same as domain modes in Windows 2000. Windows supports four types of functional levels:
1.Windows 2000 Mixed: This is the default domain functional level. When a first domain controller is installed or upgraded to Windows 2003, the domain controller is configured to run in the Windows 2000 mixed functional level. In this mode, domain controllers running the following operating systems are supported:
◦Windows NT Server 4.0

◦Windows 2000 Server

◦Windows Server 2003

2.Windows 2000 Native: In this level, domain controllers running Windows 2000 and Windows 2003 can interact with each other. No domain controller running a pre-Windows 2000 version is supported in this functional level of the domain.

3.Windows Server 2003 Interim: This functional level allows a Windows Server 2003 domain controller to interact with domain controllers in the domain running Windows NT 4.0 or Windows Server 2003. This functional level is used to upgrade the first Windows NT domain to a new forest.

Note: Windows Server 2003 interim functional level does not support domain controllers running Windows 2000.

4.Windows Server 2003:This functional level of domain allows a Windows Server 2003 domain controller to interact only with the domain controllers running Windows 2003 in the domain. A domain level can be raised to Windows Server 2003 only when all the domain controllers in the domain are running Windows Server 2003.
Note: Once a domain functional level is raised, it cannot be changed.