Setup fails to install Windows 7 or Server 2008 R2 if cluster size > 4K for the System/Boot volume


Windows 7 and Windows Server 2008 R2 setup will fail to install to a partition that has been formatted with a NTFS cluster size that is greater than 4096 bytes (4K). The following error message is displayed.

"Setup was unable to create a new system partition or locate an existing system partition."


BOOTMGR, which resides on the system volume, cannot be placed on a volume that has been formatted with a NTFS cluster size that is greater than 4096 bytes (4K).


Option 1: Create separate system and boot volumes. This should be used in scenarios where NTFS cluster sizes greater than 4096 bytes (4K) are needed or desired.

System volume: Create a small volume to hold the BOOTMGR files (100MB is sufficient). Format the volume with a cluster size less than or equal to 4K

Boot volume: Create a second volume to hold the Windows operating system files. The cluster size can be greater than 4K (NOTE: File compression is not supported on volumes with NTFS cluster sizes greater than 4K)

Boot from Windows installation media.
Press Shift+F10 at the first setup screen to open a command prompt.
Run the following commands to create the partitions: 

select disk 0
create partition primary size=400   [this will be the system volume and will be formatted with a cluster size <= 4K]
format fs=ntfs label=”System Reserve” quick
create partition primary  [this will be the boot volume, of any size, and formatted with the desired cluster size (8K in this example)]
format fs=ntfs label=OS_8k unit=8192 

Then complete setup, deploying the Windows operation system to the second partition (not the 400mb partition)

Option 2: Choose the cluster size that is less than or equal to 4K if you want to have system/boot volumes on the same physical volume.