You can make a copy of an existing VM by cloning from a template. Templates are just ordinary VMs which are intended to be used as master copies to instantiate copies from. A VM can be customized and converted into a template, but be sure to follow the appropriate preparation procedure for the VM (see Section 3.4, “Preparing to clone a Windows VM” for Windows and Section 4.5, “Preparing to clone a Linux VM” for Linux). Templates cannot be used as normal VMs without first cloning them.

XenServer has two mechanisms for cloning VMs: a full copy, or a faster "Copy-on-Write" (CoW) mode which only writes modified blocks to disk. The CoW mode is only supported for file-backed VMs. CoW is designed to save disk space and allow fast clones, but will slightly slow down normal disk performance. A template can be fast-cloned multiple times without slowdown, but if a template is cloned into a VM and the clone converted back into a template, disk performance can linearly decrease depending on the number of times this has happened. In this event, the vm-copy CLI command can be used to perform a full copy of the disks and restore expected levels of disk performance.