Today I found myself having to configure IIS under Windows Server 2008 and I needed to restrict access to a specific directory by IP address. It was quite tricky to figure out how to do this due to Microsoft's idiotic way of presenting what could easily be a straight forward user interface operation...
What follows are the steps involved to block all IPs in IIS, and granting access to one specific IP. As fa as I can tell this will work both on a site and a directory level (in my case it was a virtual directory that needed restricting).
Step 1: Click the 'Add Allow entry' option
Step 2: Add the IP address you wish to allow access
Step 3: Select the IP entry in the list (there's only one in this case) and then click the 'Edit Feature Settings' option
Step 4: Select 'Deny' in the dropdown menu - this blocks all IPs that are not listed
Hope this helps someone.

#1 by Houston Runion on 11/21/12 - 12:39 AM
#2 by Lee on 1/3/13 - 6:51 PM
#3 by vignesh on 1/13/13 - 10:57 AM
#4 by IP on 2/7/13 - 10:14 PM
#5 by Barry on 4/6/13 - 1:30 AM