Nested VMs with KVM | Build a Hypervisor Lab

You will turn one Linux server into a hypervisor that runs guest VMs, letting you build multi-node clusters on a single machine. By the end you will boot a nested guest and manage it entirely from the command line.

Learning Objectives

Enable nested virtualization in the KVM kernel module.
Provision a guest VM with libvirt and virt-install.
Manage VM lifecycle with virsh.
Time: ~3 hours · Difficulty: Advanced · Prereqs: a Linux host with CPU virtualization extensions and 8GB+ RAM.

Architecture Overview

Environment Setup

You will need: a Linux server with KVM (kvm-ok passes), libvirt, and virtinst installed.

Before you begin: confirm CPU extensions with egrep -c '(vmx|svm)' /proc/cpuinfo (must be > 0).

Step-by-Step Execution

Install the virtualization stack

These packages provide the KVM hypervisor, the libvirt management API, and the virt-install provisioning tool.

sudo apt install -y qemu-kvm libvirt-daemon-system virtinst

[ROOT REQUIRED] Installs KVM, libvirtd, and virt-install.

Enable nested virtualization

Nesting exposes virtualization extensions to guests so an L1 VM can itself run VMs.

echo 'options kvm_intel nested=1' | sudo tee /etc/modprobe.d/kvm.conf && sudo modprobe -r kvm_intel; sudo modprobe kvm_intel

Provision a guest with virt-install

This creates and boots a guest from a cloud image, scripted and repeatable.

virt-install --name node1 --memory 2048 --vcpus 2 --disk size=10 --osinfo ubuntu22.04 --import --noautoconsole

Manage the guest with virsh

$ virsh list --all

Id Name State 1 node1 running

Progress So Far

graph LR A[01 Install KVM] -->|done| B[02 Enable nesting] B -->|done| C[03 Provision guest] C -->|done| D[04 Manage with virsh] style A fill:#1a4a1a,stroke:#00ff00,color:#fff style B fill:#1a4a1a,stroke:#00ff00,color:#fff style C fill:#1a4a1a,stroke:#00ff00,color:#fff style D fill:#1a4a1a,stroke:#00ff00,color:#fff

Testing & Validation

cat /sys/module/kvm_intel/parameters/nested && virsh domstate node1

You should see Y for nesting and running for the guest. If both pass, your nested hypervisor lab works.

Troubleshooting

nested reads N: reload the module after adding the modprobe option; persist via /etc/modprobe.d.
Guest has no virtualization: set the L1 CPU mode to host-passthrough.
libvirtd not running: sudo systemctl enable --now libvirtd.

Extension Ideas

Boot two guests and build the Kubernetes Basics lab across them.
Compare with the Proxmox Homelab approach.
Automate guest creation with cloud-init user-data.

Key Results

Enabled nested KVM and booted a guest inside a VM.
Provisioned guests reproducibly with one virt-install command.
Built multi-node topologies on a single physical host.
Managed full VM lifecycle through virsh.

Build a Nested KVM Hypervisor Lab with libvirt