I’m in the process of building my own STS implementation(don’t ask why). While testing an Active Federation scenario, I got into trouble and ended with the following error message:
ID1038: The AudienceRestrictionCondition was not valid because the specified Audience is not present in AudienceUris.
Aah, you have to love WIF and it’s wonderful set of error messages...
The problem was that I forgot to add an audienceUri in my client config: