diff --git a/awx/api/views.py b/awx/api/views.py
index a7bc27a927..cc8288a1f7 100644
--- a/awx/api/views.py
+++ b/awx/api/views.py
@@ -2443,7 +2443,7 @@ class InventoryScriptView(RetrieveAPIView):
                 for host in obj.hosts.filter(**hosts_q):
                     data['_meta']['hostvars'][host.name] = host.variables_dict
                     if towervars:
-                        tower_dict = dict(remote_tower_enabled=host.enabled,
+                        tower_dict = dict(remote_tower_enabled=str(host.enabled).lower(),
                                           remote_tower_id=host.id)
                         data['_meta']['hostvars'][host.name].update(tower_dict)
 
diff --git a/awx/main/managers.py b/awx/main/managers.py
index 4825b33231..69d4a24b6b 100644
--- a/awx/main/managers.py
+++ b/awx/main/managers.py
@@ -7,7 +7,7 @@ import logging
 
 from django.db import models
 from django.utils.timezone import now
-from django.db.models import Sum
+from django.db.models import Sum, Q
 from django.conf import settings
 
 from awx.main.utils.filters import SmartFilter
@@ -21,9 +21,9 @@ class HostManager(models.Manager):
     """Custom manager class for Hosts model."""
 
     def active_count(self):
-        """Return count of active, unique hosts for licensing."""
+        """Return count of active, unique hosts for licensing. Exclude ones source from another Tower"""
         try:
-            return self.order_by('name').distinct('name').count()
+            return self.filter(~Q(inventory_sources__source='tower')).order_by('name').distinct('name').count()
         except NotImplementedError: # For unit tests only, SQLite doesn't support distinct('name')
             return len(set(self.values_list('name', flat=True)))
 
diff --git a/awx/main/tasks.py b/awx/main/tasks.py
index c3adb98a07..e284aee63d 100644
--- a/awx/main/tasks.py
+++ b/awx/main/tasks.py
@@ -1914,6 +1914,7 @@ class RunInventoryUpdate(BaseTask):
                     env[str(env_k)] = unicode(inventory_update.source_vars_dict[env_k])
         elif inventory_update.source == 'tower':
             env['TOWER_INVENTORY'] = inventory_update.instance_filters
+            env['TOWER_LICENSE_TYPE'] = get_licenser().validate()['license_type']
         elif inventory_update.source == 'file':
             raise NotImplementedError('Cannot update file sources through the task system.')
         # add private_data_files
diff --git a/awx/main/tests/functional/test_credential.py b/awx/main/tests/functional/test_credential.py
index 9bcf23e198..d69ee9ce37 100644
--- a/awx/main/tests/functional/test_credential.py
+++ b/awx/main/tests/functional/test_credential.py
@@ -29,6 +29,7 @@ def test_default_cred_types():
         'satellite6',
         'scm',
         'ssh',
+        'tower',
         'vault',
         'vmware',
     ]
diff --git a/awx/plugins/inventory/tower.py b/awx/plugins/inventory/tower.py
index 0fae0865b2..1de920728f 100755
--- a/awx/plugins/inventory/tower.py
+++ b/awx/plugins/inventory/tower.py
@@ -56,6 +56,7 @@ def parse_configuration():
     password = os.environ.get("TOWER_PASSWORD", None)
     ignore_ssl = os.environ.get("TOWER_IGNORE_SSL", "1").lower() in ("1", "yes", "true")
     inventory = os.environ.get("TOWER_INVENTORY", None)
+    license_type = os.environ.get("TOWER_LICENSE_TYPE", "enterprise")
 
     errors = []
     if not host_name:
@@ -74,14 +75,30 @@ def parse_configuration():
                 tower_user=username,
                 tower_pass=password,
                 tower_inventory=inventory,
+                tower_license_type=license_type,
                 ignore_ssl=ignore_ssl)
 
 
-def read_tower_inventory(tower_host, tower_user, tower_pass, inventory, ignore_ssl=False):
+def read_tower_inventory(tower_host, tower_user, tower_pass, inventory, license_type, ignore_ssl=False):
     if not re.match('(?:http|https)://', tower_host):
         tower_host = "https://{}".format(tower_host)
-    inventory_url = urljoin(tower_host, "/api/v2/inventories/{}/script/?hostvars=1&towervars=1".format(inventory))
+    inventory_url = urljoin(tower_host, "/api/v2/inventories/{}/script/?hostvars=1&towervars=1&all=1".format(inventory.replace('/', '')))
+    config_url = urljoin(tower_host, "/api/v2/config/")
     try:
+        if license_type != "open":
+            config_response = requests.get(config_url,
+                                           auth=HTTPBasicAuth(tower_user, tower_pass),
+                                           verify=not ignore_ssl)
+            if config_response.ok:
+                source_type = config_response.json()['license_info']['license_type']
+                if not source_type == license_type:
+                    print("Tower server licenses must match: source: {} local: {}".format(source_type,
+                                                                                          license_type))
+                    sys.exit(1)
+            else:
+                print("Failed to validate the license of the remote Tower: {}".format(config_response.data))
+                sys.exit(1)
+
         response = requests.get(inventory_url,
                                 auth=HTTPBasicAuth(tower_user, tower_pass),
                                 verify=not ignore_ssl)
@@ -101,6 +118,7 @@ def main():
                                            config['tower_user'],
                                            config['tower_pass'],
                                            config['tower_inventory'],
+                                           config['tower_license_type'],
                                            ignore_ssl=config['ignore_ssl'])
     print(
         json.dumps(