Recently I restored a database onto my SQL Server 2008 server. When I tried to create a database diagram for the restored DB then I observed the below mentioned error.

“Database diagram support objects cannot be installed because this database does not have a valid owner. To continue, first use the Files page of the Database Properties dialog box or the ALTER AUTHORIZATION statement to set the database owner to a valid login, then add the database diagram support objects”

Scenarios 1:
When a DB that that is inherited from previous version of SQL Server having the database owner as a login that has been changed or not having any permission on this new instance
– Change the owner of the DB to SQL Authentication and then start creating DB Diagrams. Go to DB Properties –> Files –> Update Owner field and click OK

Scenario 2:
This error also occurs when the user has initiated the SQL Server Express on top of an MSDE 2000 instance.
– User must check the database compatability level set when it is restored/upgarded on to SQL Express instance
– Change the compatibility of the DB. Go To DB Properties –> Options –> Set Compatibility level as to an earlier version