When you use Lion Internet Recovery to reinstall Lion, your Mac contacts Apples servers, identifies itself, and requests the appropriate Lion-install data. Apples servers verify the Mac model and then, assuming its a Mac compatible with Lion Internet Recovery, provide the roughly 4GB of data for download. Once that data has been downloaded, Lion Recovery restarts your Mac, immediately installs the OS, and then deletes the installer data. The trick is to interrupt that processsafelyso you can grab the installer data and keep it. Here are the steps to take:
The Mac OS X Utilities window you see when you boot into Lion Recovery and Lion Internet Recovery
Boot into recovery mode by holding down Command+R at startup; youll eventually see a Mac OS X Utilities window. (If this doesnt work, restart and hold down Command+Option+R, which should force your Mac into Lion Internet Recovery.)
Connect a drivea hard drive, a thumb drive, or the likewith at least 12GB of free space. The drive must be formatted as Mac OS Extended (Journaled), and must have a GUID Partition Table. Follow Steps 1 through 4 in this slideshow to properly format the drive.
In the Mac OS X Utilities window, click Reinstall Mac OS X and click Continue.
On the Mac OS X Lion screen, click Continue. Youll see the message, To download and restore Mac OS X, your computers eligibility will be verified with Apple. Click Continue, then click Agree (twice) on the next screen to agree to the Lion license agreement.
Select the drive onto which you want to install Lion. The important thing here is to select your external drive.
Click Install to begin the download. Depending on your Internet connection, the download can take anywhere from under an hour to several hours (or even, if youre unfortunate enough to be on a very slow connection, considerably longer).
IMPORTANT: Monitor the downloads progress. As the progress bar gets near the end, get ready, because once the status reads About 0 seconds remaining, the progress bar will disappear, the installer will spend a minute or two cleaning up, and then your Mac will restart. As soon as the screen goes dark, unplug your external drive. If you wait too long, your Mac will boot into the Mac OS X installer on that drive, starting the installation process. Interrupting that process can leave your Mac unable to install OS X unless you restart it andIm not jokingzap PRAM.
Once your Mac has booted from its normal startup volume, reconnect the external drive. Alternatively, you can connect the drive to another Mac and proceed with the following steps using that Mac.
Open the external drive, and youll find a folder called Mac OS X Install Data. The important file is the one called InstallESD.dmg, just under 4GB in size, which is a bootable disk image containing the Lion installer. (If the Mac OS X Install Data folder has a no access icon, select the external drive in the Finder, choose File -> Get Info, and expand the Sharing & Permissions folder in the Info window. Click the padlock icon at the bottom of the window, provide an admin-level username and password, and then uncheck the box next to Ignore Ownership On This Volume.)
If you plan to use the same hard drive for your bootable installer drive that you used to download the installer, youll need to copy the InstallESD.dmg disk image to your Macs internal drive, or another drive, before proceeding. Use that copy in Step 12, below.
Launch Disk Utility (in /Applications/Utilities).
Drag the InstallESD.dmg disk image into Disk Utilitys left-hand sidebar.
Now youve got the latest Lion-installer disk image, and youre ready to use that image to create a bootable installer drive or disc. As a bonus, the resulting Lion-installer drive should boot and support any current Lion-capable Mac. However, be aware that when Apple releases new Mac models, those models will come pre-installed with a newer version of Lion, so your installer drive wont work with them. (At some point, Apple will update the Lion installer on the Mac App Store to support those newer Macs, so you can then download the updated installer and make an updated installer drive that supports even those Macs. And so on
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The next steps depend on whether you want to create a bootable hard drive or flash drive, or a bootable DVD. I recommend a hard drive or flash drive; a DVD will work, but it will take a long time to boot and install. And, of course, depending on your particular Mac modelIm looking at you, MacBook Air and recent Mac miniyou may not have an optical drive.
To create a bootable hard drive or flash drive
In Disk Utility, select InstallESD.dmg in the sidebar, and then click the Open button in the toolbar. This mounts the disk images volume in the Finder. The mounted volume is called Mac OS X Install ESD.
Click Mac OS X Install ESD in Disk Utilitys sidebar, then click the Restore button in the main part of the window.
Drag the Mac OS X Install ESD icon into the Source field on the right (if it isnt already there).
Connect to your Mac the hard drive or flash drive you want to use for your bootable Lion installer. This drive must be at least 5GB in size (an 8GB flash drive works well), and it must be formatted with a GUID Partition Table.
In Disk Utility, find this destination drive in the sidebar and then drag it into the Destination field on the right; if the destination drive has multiple partitions, just drag the partition you want to use as your bootable installer volume. Warning: The next step will erase the destination drive or partition, so make sure it doesnt contain any valuable data.
Click Restore and, if prompted, enter an admin-level username and password. The restore procedure will take anywhere from five to 15 minutes, depending on your Mac and the speed of your drive.
Note: In versions of the Lion installer prior to 10.7.4, you didnt need to first mount the InstallESD.dmg imageyou could simply drag the image itself into the Source field. However, with the 10.7.4 installer, you must use the mounted Mac OS X Install ESD volume or you will get an error at the end of the restore procedure and the newly created bootable drive may not function properly.
You use Disk Utilitys Restore screen to create a bootable flash drive or hard drive.
To create a bootable DVD
In Disk Utility, select InstallESD.dmg in the sidebar
Click the Burn button in the toolbar.
When prompted, insert a blank DVD (a single-layer disc should work, although you can use a dual-layer disc instead), choose your burn options, and click Burn.
You can now boot any Lion-compatible Mac from this drive or DVD and install Lion. You can also use any of the Lion installers special recovery and restore featuresin fact, when you boot from this drive or DVD, youll see the same Mac OS X Utilities screen you get when you boot into Lion Recovery.
(Thanks to reader Jameel Morrison for confirming this procedure and for prodding me to finally write this article.)
UPDATED 2/13/2012, 9:29am, to make it even more clear that this article is aimed at owners of Macs that shipped after Lion.
UPDATED 2/14/2012, 9:40an, to correct the size of the drive onto which you want to download the Lion installer.
Updated 6/27/2012, 9pm, to add note about Disk Utility error message introduced with the 10.7.4 installer, and 6/29/2012, 8:20am, to correct instructions when creating a drive using the 10.7.4 installer.
