You cannot install Windows 7 from an ISO image unless you create a bootable DVD or flash drive. The Windows 7 USB/DVD Download Tool, a free utility by Microsoft, automatically formats your USB flash drive and copies ISO image data onto the device. Windows Vista, 8 and 8.1 ISO images are also supported by the Windows 7 USB/DVD Download Tool.
Get the Windows 7 USB/DVD Download Tool from CodePlex, and then double-click the downloaded file to install the application.
Open the Windows 7 USB/DVD Download Tool from the Start menu or Start screen, and then click the Browse button to select the Windows 7 ISO image from your hard drive. After selecting, click Next.
Insert a USB flash drive with a storage capacity of at least 4GB; since the Windows 7 USB/DVD Download Tool erases all data on the device, back up any important data before proceeding. Click USB Device to proceed.
Select your USB flash drive if you have multiple USB devices connected, and then click Begin Copying. If the flash drive doesn't show up on the list, click the Refresh button.
Click Erase USB, and then click Yes to format and copy the files required to create the bootable flash drive.
Close the Winows 7 USB/DVD Download Tool after the process finishes, or click Start Over to create another bootable flash drive.
The Windows 7 USB/DVD Download Tool also lets you create bootable DVDs. Select "DVD" instead of USB Device when prompted, and then enter an empty disc to create the bootable DVD.
To boot from your bootable flash drive, restart your computer, and then open the boot menu at computer startup; depending on type of motherboard, the boot menu may open by pressing "F10," "F12" or "Esc." On the boot menu, select your USB flash drive, and then press "Enter." Alternately, access the flash drive File Explorer, and then double-click the "Setup" file to start installing Windows 7 from within the current operating system.
The Rufus open source utility also lets you create bootable flash drives. Download and open Rufus (link in Resources), select your flash drive, locate the ISO image, and then click "Start" to create the bootable flash drive. Like the Windows 7 USB/DVD Download Tool, Rufus formats the flash drive before copying the ISO image data, so back up any important data in advance.
64-bit versions of Windows 8 and 8.1 ISO images may require flash drives with a storage capacity of over 4GB.