For whomever runs across this post, I have replicated the behavior: ICACLS path /SETOWNER DOMAIN\Username DOES NOT WORK on Windows Server 2003 SP2. There MUST be a bug in the application, because I can run the exact same command, logged on as the exact same user, against the same path, from a Windows Vista SP1 system (which has a new version of icacls), and it works. It seems to me that by doing this test I've ruled out user credentials problems, permissions problems, user rights problems... the only "variable" is the version of icacls.exe.