I had a hard time finding information on how to do this a few months ago and got it working after testing and asking a bunch of questions... Hopefully this will help anyone that wants to have a TimeMachine backup on a networked drive. I had this saved in a notepad file so I don't remember all the people that helped me sadly. I have this working on a file server running Windows 7 (Networked drive is SMB) and my Macbook Pro running 10.8.2. One thing to note, do NOT use any spaces when naming anything. It caused problems for me Next, you'll want to resize the sparsebundle to w/e your harddrive size is since when making the sparsebundle it won't allow you to make it bigger than your home drive for some reason. Now to tell Time Machine to use the Sparsebundle. After this, do a test backup to ensure that the backup works. Inside the sparsebundle, TimeMachine should've created the folder, "Backups.backupdb" If you want to automatically mount the TimeMachine networked drive when you turn on your Mac, you can do this. Thanks a lot to Weasleboy for providing the solution. Hopefully this will help out a few of you that want a TimeMachine backed up to a networked drive. Any questions or concerns, go ahead and ask!