The transaction manager has disabled its support for remote/network transactions

Make sure that the "Distributed Transaction Coordinator" Service is running on both database and client. Also make sure you check "Network DTC Access", "Allow Remote Client", "Allow Inbound/Outbound" and "Enable TIP".

To enable Network DTC Access for MS DTC transactions

1. Open the Component Services snap-in.

   To open Component Services, click Start. In the search box, type dcomcnfg, and then press ENTER.

2. Expand the console tree to locate the DTC (for example, Local DTC) for which you want to enable Network MS DTC Access.

3. On the Action menu, click Properties.

4. Click the Security tab and make the following changes: In Security Settings, select the Network DTC Access check box.

   In Transaction Manager Communication, select the Allow Inbound and Allow Outbound check boxes.

I had a store procedure that call another store Procedure in "linked server".when I execute it in ssms it was ok,but when I call it in application(By Entity Framework),I got this error. This article helped me and I used this script:

EXEC sp_serveroption @server = 'LinkedServer IP or Name',@optname = 'remote proc transaction promotion', @optvalue = 'false' ;

for more detail look at this: Linked server : The partner transaction manager has disabled its support for remote/network transactions

In my scenario, the exception was being thrown because I was trying to create a new connection instance within a TransactionScope on an already existing connection:

Example:

void someFunction()
{
    using (var db = new DBContext(GetConnectionString()))
    {
        using (var transaction = new TransactionScope(TransactionScopeOption.Required, new TransactionOptions { IsolationLevel = System.Transactions.IsolationLevel.ReadUncommitted }))
        {
            someOtherFunction(); // This function opens a new connection within this transaction, causing the exception.
        }
    }
}

void someOtherFunction()
{
    using (var db = new DBContext(GetConnectionString()))
    {
        db.Whatever // <- Exception.
    }
}

I was getting this issue intermittently, I had followed the instructions here and very similar ones elsewhere. All was configured correctly.

This page: http://sysadminwebsite.wordpress.com/2012/05/29/9/ helped me find the problem.

Basically I had duplicate CID's for the MSDTC across both servers. HKEY_CLASSES_ROOT\CID

See: http://msdn.microsoft.com/en-us/library/aa561924.aspx section Ensure that MSDTC is assigned a unique CID value

I am working with virtual servers and our server team likes to use the same image for every server. It's a simple fix and we didn't need a restart. But the DTC service did need setting to Automatic startup and did need to be started after the re-install.

Comment from answer: "make sure you use the same open connection for all the database calls inside the transaction. – Magnus"

Our users are stored in a separate db from the data I was working with in the transactions. Opening the db connection to get the user was causing this error for me. Moving the other db connection and user lookup outside of the transaction scope fixed the error.