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Create file encountered operating system error 3

Applying SQL Server 2005 SP4 may fail with error like below:-

In bootstrap log you will see below message –

Product                   : Database Services (MSSQLSERVER)

Product Version (Previous): 4060

Product Version (Final)   : 

Status                    : Failure

Log File                  : C:\Program Files\Microsoft SQL Server\90\Setup Bootstrap\LOG\Hotfix\SQL9_Hotfix_KB2463332_sqlrun_sql.msp.log

Error Number              : 29537

Error Description         : MSP Error: 29537  SQL Server Setup has encountered the following problem: [Microsoft][SQL Native Client][SQL Server]CREATE DATABASE failed. Some file names listed could not be created. Check related errors.. To continue, correct the problem, and then run SQL Server Setup again. 


     One or more products failed to install, see above for details

     Exit Code Returned: 29537

Also you will see below error message in windows event viewer under application Log:-

CREATE FILE encountered operating system error 3(The system cannot find the path specified.) while attempting to open or create the physical file ‘F:\MSSQL.1\MSSQL\DATA\temp_MS_AgentSigningCertificate_database_log.LDF’.


You will see below error when the default database data and log file path (mentioned under SQL Server instance properties –> Database Settings) does not exist at OS level. Possibly after installation some one have moved the data and log files to new location and have deleted the old folder structure, but forgot to update the default data and log file path.

To resolve the issue, just update the default database data and log file path under  SQL Server instance properties –> Database Settings and prove a valid path. Then try running your installer again.