Nested Virtualization is the capability to run a hypervisor inside a virtual machine so that the guest VM can itself host further guest VMs; this requires the host to expose hardware virtualization extensions to guests.

Nested Virtualization is characterized by three key components:

• Hardware-assisted extension forwarding: passing VMX/SVM and nested EPT/NPT support to guest hypervisors.
• Hypervisor support & configuration: host and guest hypervisors (KVM, Hyper-V, VMware) must support and be configured for nesting.
• Performance & complexity tradeoffs: adds overhead and requires careful tuning of CPU/memory I/O paths and device passthrough.

Nested Virtualization enables realistic lab, CI, and cloud development scenarios (testing cloud control planes, hypervisor features, or virtual appliances) without dedicated hardware. On Arm-based server platforms (e.g., Ampere Altra), nested virtualization support expands capabilities for multi-layer testing and edge/cloud service deployments.

• Unlocking Layers: Powering Nested Virtualization with Ampere CPUs
• VMware nested virtualization guide