1) Make a backup of the Windows NT 4.0.
2) Upgrade the Windows NT 4.0 server to Windows 2000. The result of this will be that the Windows NT 4.0 server and NT 4.0 Domain will become a Windows 2000 Active Directory. There is some prep work involved. Window 2000 Active Directory will require a DNS server that is able to handle dynamic updates and SRV records. Some UNIX system can do this, but Windows servers can do it better. Making your domain controllers DNS servers is a typical technique. Also, make sure that you have the DNS name or fully qualified domain name (FQDN) set appropriately on the Windows NT 4.0 server before you upgrade. For example, if you want you resulting Active Directory FQDN to be MyCompany.com, you need to make sure that the DNS Suffix or FQDN of the NT 4.0 server is MyCompany.com before you upgrade.
3) Run DCPROMO on the Windows 2000 member server to add it as a DC in the newly upgraded Windows 2000 domain.
4) Move all of the Flexible Single Master Operations (FSMO, fizz-mo) Roles over to the Windows 2000 DC that you just promoted. Moving these roles is a little annoying because they are all in different interfaces, there are 5 roles -- RID Master, Schema Master, Domain Naming Master, PDC Emulator, and Infrastructure Master. I like to use the NTDSUTIL command line interface to move the roles. Here is a step-by-step article from Microsoft that shows you how: http://support.microsoft.com/default.aspx?scid=kb;en-us;255504
5) You may now use DCPROMO to demote the upgraded Windows NT 4.0 server to being just a member server. This is an important step to making sure that the integrity of the Active Directory is maintained.
6) Remove the upgraded Windows NT 4.0 server from the domain and retire the system.
7) Install the Windows 2003 server that you will be using for Exchange 2003. I would not make this a domain controller unless it is going to be the only other one in the domain. Exchange is typically exposed to the Internet and that means risk. If the Exchange system is also a Domain Controller your risk is increased -- so you avoid it when you can. Of course, if you are a small or growing company, spending the extra money on another server (as you should have 2 DC's in your network) may not be feasible right now. Keep it in mind for the future.
8) Before you install Exchange, you may wish to consider upgrading the other Windows 2000 machine to Windows 2003. Consistency makes for a more stable environment. Once the upgrade is complete, elevate the Active Directory to running in Windows 2003 Native Mode. This assumes there are no more Windows 2000 Domain controllers and definitely no more Windows NT 4.0 Domain Controllers.
9) Follow the steps for installing Exchange 2003 (Adprep, Forestprep, etc).
This was first published in November 2004