How to Install an Operating System on an External USB Hard Drive
You may have an external hard drive you want to use for more than just document backup. In this situation, you can install an operating system onto your external hard drive. By doing so, you will be able to run your external hard drive as a fully functional operating system. If your primary hard drive ever crashes, you will have a backup option unavailable to those who simply use their external hard drives as file and document backup.
Plug your external hard drive into your computer using the USB cable. Insert the installation disk for your operating system into the CD/DVD drive. Turn on or restart your computer.
Boot from the installation disk. You may have to press a key once prompted to boot from the installation disk.
Accept the license terms and conditions. Read through these carefully if you wish to understand your legal rights as a user. If you disagree with these terms and conditions, you may want to purchase a different operating system.
Choose your destination drive. Your external hard drive will likely be the E: or F: drive. By default, the C: will represent your main hard drive and the D: will usually represent your CD/DVD drive.
Begin the installation. Your external hard drive will install the operating system. You will now be able to run that operating system off of your external hard drive.