Disclaimer: this information is not guaranteed to be correct. When in doubt about licensing, contact Microsoft's activation hotline for assistance. Super User is not responsible for legal repercussions resulting from your choices with licensing and activation. For more official information from Microsoft, see the Microsoft Product Activation Solution Center.
Overview: how can a license be used?
A single Windows 7 license can activate several different types of installations. Here is a quick reference table of what is supported:
License type | OEM | Retail | Upgrade | MSDN | Vol. License
Transferable | NO | YES | YES | YES | YES
between computers | | | | |
| | | | |
Pre-activated | Sometimes | NO | NO | NO | NO
| | | | |
Valid for | Sometimes* | YES | YES | YES | YES
64 and 32-bit | | | | |
| | | | |
Valid for any | Usually | YES | YES | YES | YES
language | | | | |
| | | | |
Permits multiple | NO | NO | NO† | Sometimes | YES
installations | | | | |
| | | | |
Allows copies | NO | NO | NO | Sometimes | Up to 4
in VM | | | | |
* In some cases switching an OEM install from 32 to 64 bit may require contacting Microsoft and requesting a reactivation.
† Except for Windows 7 Family Upgrade Pack, which allows for 3 computers
A Windows license can always be transferred between 64-bit and 32-bit installations and different languages, regardless of the version.
You may only have one copy/version/installation activated with one license key at any given time - even if it is on the same computer. Windows 7 Family Pack allows for you to activate three computers. Exceptions may apply for MSDN and Volume License versions, depending on your agreement with Microsoft.
What are the different types of Windows licenses?
Windows licenses are divided into several categories, as shown in the table above. The type of license affects how you can use and transfer the license.
OEMs (original equipment manufacturer) are computer manufacturers, like HP and Dell, and also includes system builders who make their own computers. An OEM license is sold with the computer, and is pre-installed and pre-activated.
Retail licenses are sold as a stand-alone product without hardware. They can be installed on any computer (incuding OEM computers). An upgrade license is the same as retail license, but requires that you owned a previous version of Windows, which the upgrade must replace.
Microsoft has several programs for developers, IT professionals, and students to buy Windows at a reduced cost through agreements with Microsoft. These licenses are transferable, but there are certain restrictions on their commercial use depending on the agreement.
Large organizations often have volume licensing agreements, which allow them to use any version of Windows on a large number of machines. The licensing terms for volume licenses are specific to each agreement with Microsoft. Starting with Windows Vista, volume licensed copies of Windows require a Key Management Server hosted by the organization owning the licenses. Questions about KMS and volume licensing would usually be better suited for Server Fault.
Components which affect activation
Installation Disk Type
The type of installation disk you use affects activation. Unlike previous versions of Windows, in Windows 7 you can install with any disk which is the right edition (Home/Pro/Ultimate), even if it is a different license type (OEM/Retail/MSDN). You can even alter your installation disk to install any version of Windows (although you'll still need the right key).
When possible, use the proper installation disk for your license type. This is particularly important with OEM installations: OEMs use a technology called System Locked Preactivation. A special encrypted file on the installation disk is checked against a code stored on the motherboard to verify if the computer was manufactured by the same company that provided the installation disk. If so, activation is automatic without even having to be online. If you have an OEM installation, the license key on your COA (certificate of authenticity; the sticker on your computer) is not necessarily the key used to install your computer, since your computer used a SLP key from the manufacturer. If you reinstall with a disk that is not from your manufacturer, use the key on your sticker, but expect that to require a phone activation.
Whenever you activate with a disk type which does not match your license, you will not be able to activate automatically over the internet. You will need to call the Microsoft Activation Hotline to activate via telephone. Activation will still be successful, but will take longer due to this extra step.
Edition: Home, Professional, Ultimate
You may not switch between editions without purchasing an upgrade.
Architecture: 64-bit vs. 32-bit
You are free to switch between a 64-bit and 32-bit version of Windows at any time. This requires a reinstall, but you can use the same license key. Depending on how recently you have reinstalled, reactivation may be possible over the internet, or may require you to call the activation hotline.
If you switch from 32-bit to 64-bit or vice-versa, you will need to do a full reinstall of your operating system. Make sure to do a full backup of all your files first. You should also verify that your processor supports x64. For more info, read the Windows 7 32-bit and 64-bit Frequently Asked Questions from Microsoft.
Windows has two different ways for changing the language. Enterprise and Ultimate versions of Windows 7 can download and install language packs through Windows updates. If you have a different edition, you must reinstall Windows using an installation disk for the new language. You may use the same license, though reactivation by phone may be required.
In some specific cases, license keys may be geographically restricted. For example, Windows 7 Home Basic is only available in certain countries like China. For more information, read "Geographically Restricted Microsoft Software"
OEM licenses are permanently assigned to the computer they were installed on. You can never transfer an OEM license to a different computer. Retail licenses can be moved between your own computers whenever you want, provided they are only installed on one computer at once. Retail licenses are transferable to a third party only once, as explained in the Windows 7 EULA:
The first user of the software may make a one time transfer of the software and this agreement, by transferring the original media, the certificate of authenticity, the product key and the proof of purchase directly to a third party. The first user must remove the software before transferring it separately from the computer. The first user may not retain any copies of the software.
When transferring a license, you may only have it installed on one computer at a time, so make sure to remove Windows from the old computer before installing on the new computer. There is no specific deactivation procedure; you are just required to format the old disk.
When installing the transferred license, depending on how recently you have activated that particular license key, you may not be able to activate automatically over the internet. If this is the case, you will need to call the Microsoft activation hotline and activate by telephone.
When reinstalling, you can back up your activation files. This preserves the activation status from before the reinstall, and should not require calling the activation center or even reactivating online as long as you reinstalled the same version. If you did change the architecture, language, or hardware, you may have to reactivate online or by telephone.
For information about how to back up your activation, read Windows activation with planned reinstall.
While it is technically possible to install one copy of Windows on multiple computers simultaneously, the license agreement for most Windows products allows for only one installation at a time. Exceptions are for Windows 7 Family Pack, some MSDN versions, and Volume Licensing.
Software Assurance customers using Windows 7 Enterprise may install up to four virtualized instances of Windows 7 Enterprise or Ultimate on the machine which has Windows 7 Enterprise installed. Other versions of Windows 7 do not allow for virtualized instances of Windows 7 to run without a separate license.
Changing the license key
To change the license key, if necessary, go to My Computer, click System Properties, and click Change Product Key under the activation section.