Xen FAQ Nesting

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Can I run Xen within Xen?

Yes, You can install Xen on the base system, create a HVM domain, and install Xen in that guest domain. Note that the inner Xen system will not (yet) support HVM again.

What is the status of Nested Virtualization in Xen?

See this XenSummit presentation outlining the status from Intel - applies to Xen 4.2 (and 4.3): Nested Virtualitaion Update from Intel