This is a Canonical Question about Active Directory DNS Settings.
Related:
Assuming an environment with multiple domain controllers (assume that they all run DNS as well):
- in what order should the DNS servers be listed in the network adapters for each domain controller?
- Should 127.0.0.1 be used as the primary DNS server for each domain controller?
- Does it make any difference, if so what versions are affected and how?
According to this link and the Windows Server 2008 R2 Best Practices Analyzer, the loopback address should be in the list, but never as the primary DNS server. In certain situations like a topology change, this could break replication and cause a server to be "on an island" as far as replication is concerned.
Say that you have two servers: DC01 (10.1.1.1) and DC02 (10.1.1.2) that are both domain controllers in the same domain and both hold copies of the ADI zones for that domain. They should be configured as follows:
From http://technet.microsoft.com/en-us/library/ff807362%28v=ws.10%29.aspx
I also want to share this snippet from the book Windows Server 2008 R2 Unleashed:
However, even if you are never affected by the "island" problem, your DC will still reboot much faster and with fewer errors if it uses another already up and running DC as its primary DNS resolver.
Never, ever have a DC use itself as Primary DNS.
All sorts of havoc can (and Murphy dictates: will) happen if the AD services become online before the DNS service is live after a reboot. (Or DNS crashes, gets DOSsed, whatever.)
There is also interaction between DHCP (with dynamic DNS updates) and DNS which depends heavily upon DNS working properly.
Always put 127.0.0.1 last. Also: Don't be tempted to use the real LAN ip-address of the server either.
Dynamic DNS updates from DHCP are very sensitive to this.
(127.0.0.1 always exist and can be accessed faster. The real ip-address might not always be available/be busy. In some scenarios the dynamic DNS updates can actually DOS the LAN adapter if there is a high amount of simultaneous DHCP requests combined with sub-par NIC/drivers.)