Fixing "Setup was Unable to Create a New System Partition" Error While Installing Windows 7 via Bootcamp

This is a little bit outside the scope of this blog, but I can't help myself. I recently got a new iMac, and tried to install Windows 7 on it using Bootcamp -- this is usually a painless process, but with the removal of DVD drives on the iMac and USB 3, it's a world of hurt. Here's my rundown of what worked seamlessly for me, after repeated bouts of getting stuck at the error "Setup was Unable to Create a New System Partition" during the Windows 7 install¹.

• If you have any half-completed installs, use the Bootcamp Assistant to remove the broken windows partition (in Bootcamp packaged with Mavericks, that should be checking the last checkbox only, to "remove").

• Forget about installing form a USB thumb drive, and use an external DVD drive with a Windows 7 install disk². (Use the Disk Utility to burn the ISO to the DVD if needed. You can download the ISO file for Windows 7 Ultimate, which will allow you to install Home, Ultimate, etc flavors of 64-bit Windows 7, here.)

• Plug in your USB thumb drive, which we will still use to hold the Apple support files.

• The ordering of things plugged into the USB ports seems to matter. On my iMac, there are four usb ports at the back; facing the back of the iMac from right to left I had: external DVD drive, thumb drive, blank, apple keyboard w/ non-apple mouse plugged into keyboard.

• Use Bootcamp Assistant:

  • Uncheck the option to copy the installation files to a USB thumb drive. We don't need to copy the iso to the thumb drive, since we're using DVD.

  • Check the option to copy the support files to the thumb drive. We need these for Apple hardware drivers.

  • Check the option to install windows. We desperately want to do that!

• If you've been trying to install from a USB thumb drive, you'll probably get a message about making the thumb not bootable. That is correct: we want to make the USB thumb drive not bootable now, as we are booting from the DVD and just using the thumb for support files.

• Now the installation should work. Select the bootcamp partition, choose advanced, choose to format the BOOTCAMP partition as usual. Remember which partition said BOOTCAMP before you partition :)

• Dance around your office (optional, but recommended!)

I believe the root of this issue is a unhappy melding of USB 3.0 issues and having a bootable USB thumb drive be the source of installation.