Windows XP mode is a pre-prepared and configured image of a 32-bit VM running Windows XP Professional Service Pack 3. This image can be run on Windows Virtual PC, which is an add-on to Windows 7 in Professional, Enterprise and Ultimate versions. Windows XP mode is a full, licensed (for users of the above editions of Windows 7) edition of the system and is used to run applications incompatible with the "Seven".

Integration of Windows Virtual PC with the system also allows to run the application in such a way that it looks and behaves as if it was installed and running on a physical host system - the virtual machine exposes only the application window, without additional interface elements such as the taskbar. Between the virtual application and the host system there are also functions such as copying and pasting, the application can also have access to the physical hard drives of the computer and devices connected to USB ports.