The WiX toolset is released under the Microsoft Reciprocal License (MS-RL). 
A reciprocal license is used to ensure that others who build on the effort of the WiX community give back to the WiX community. 
Specifically the license requires that fixes and improvements to the WiX toolset must be published using the same license.

Sometimes the reciprocal license is incorrectly interpreted to also apply to bundles, packages, and custom actions built using the WiX toolset. 
The Outercurve Foundation has previously provided this statement below to clarify which now the .NET Foundation reaffirms:

The WiX toolset (WiX) is licensed under the Microsoft Reciprocal License (MS-RL). 
The MS-RL governs the distribution of the software licensed under it, as well as derivative works, 
and incorporates the definition of a derivative work provided in U.S. copyright law. 
OuterCurve Foundation (and the .NET Foundation) does not view the installer packages generated by 
WiX as falling within the definition of a derivative work, merely because they are produced using WiX. 
Thus, the installer packages generated by WiX will normally fall outside the scope of the MS-RL, 
and any of your source code, binaries, libraries, routines or other software components 
that are incorporated in installer packages generated by WiX can be governed by other licensing terms.

The full text of the MS-RL license is reproduced below. 
It can also be found in the LICENSE.TXT file included with the source code.

Microsoft Reciprocal License (MS-RL)
This license governs use of the accompanying software. 
If you use the software, you accept this license. 
If you do not accept the license, do not use the software.

Definitions

The terms "reproduce," "reproduction," "derivative works," and 
"distribution" have the same meaning here as under U.S. copyright law.

A "contribution" is the original software, or any additions or changes to the software.

A "contributor" is any person that distributes its contribution under this license.

"Licensed patents" are a contributor's patent claims that read directly on its contribution.

Grant of Rights

(A) Copyright Grant- Subject to the terms of this license, 
including the license conditions and limitations in section 3, 
each contributor grants you a non-exclusive, worldwide, 
royalty-free copyright license to reproduce its contribution, 
prepare derivative works of its contribution, 
and distribute its contribution or any derivative works that you create.

(B) Patent Grant- Subject to the terms of this license, 
including the license conditions and limitations in section 3, 
each contributor grants you a non-exclusive, worldwide, 
royalty-free license under its licensed patents to make, have made, use, sell, offer for sale, import, 
and/or otherwise dispose of its contribution in the software or derivative works of the contribution in the software.

Conditions and Limitations

(A) Reciprocal Grants- For any file you distribute that contains code from the software (in source code or binary format), 
you must provide recipients the source code to that file along with a copy of this license, 
which license will govern that file. 
You may license other files that are entirely your own work and do not contain code from the software under any terms you choose.

(B) No Trademark License- This license does not grant you rights to use any contributors' name, logo, or trademarks.

(C) If you bring a patent claim against any contributor over patents 
that you claim are infringed by the software, your patent license from such contributor to the software ends automatically.

(D) If you distribute any portion of the software, you must retain all copyright, 
patent, trademark, and attribution notices that are present in the software.

(E) If you distribute any portion of the software in source code form, you may do 
so only under this license by including a complete copy of this license with your distribution. 
If you distribute any portion of the software in compiled or object code form, you may only do so under a license that complies with this license.

(F) The software is licensed "as-is." You bear the risk of using it. 
The contributors give no express warranties, guarantees or conditions. 
You may have additional consumer rights under your local laws which this license cannot change. 
To the extent permitted under your local laws, the contributors exclude the implied warranties of merchantability, 
fitness for a particular purpose and non-infringement.