Hi Bowling,
Thank you for reaching out to the Microsoft Q&A platform.
Based on your question we understand that you want to know how to use windows license In O365 on Guest VM.Using an Office 365 license, which includes Windows Client Access Licenses (CALs), in a VMware environment is generally legal as long as you maintain specific condition with Microsoft's licensing terms.
Windows CALs included with Office 365 are for accessing Windows Server services, not for licensing Windows operating systems on virtual machines. For running Windows on a VM, you need a separate Windows license,
Check the specific licensing agreement for your Windows version. Some licenses allow for virtualization and Office 365 subscription includes Windows Client Access Licenses (CALs), it may provide some rights for use in virtual environments,
Activating Windows in Guest VM
When installing Windows in the guest VM, you will be prompted to enter your product key. Enter the key associated with your Windows license.
If your Windows license is linked to a Microsoft account, you can activate Windows by signing in with that account after installation.
Please find the below document for your reference:
https://learn.microsoft.com/en-us/windows-server/get-started/automatic-vm-activation?tabs=server2025
I hope this information is helpful. Please feel free to reach out if you have any further questions.
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Thank You.