Mac OS: "Startup Disk no longer has a valid System Folder"

If the Mac OS 9 System Folder becomes unblessed and you choose Restart from the Special menu, an alert message appears that the "Startup Disk no longer has a valid System Folder."
Symptom

When you try to restart the computer, an alert box appears with the following message:

You may also find that some fonts displayed on screen have jagged edges, and the items in the Apple menu after "About this application..." may not be present.


Solution

Important: This solution deals with the Mac OS 9 "System Folder". When Mac OS 9 and Mac OS X are installed on the same computer, there is another folder at the top (root) level of the hard drive named just "System". The System Folder contains Mac OS 9 software components, and the System folder contains Mac OS X software components. Do not confuse the two folders.

The symptom can happen if:

Choose a set of steps to match your situation (A or B):

A. Use these steps if you are starting up alternatively from Mac OS 9 and Mac OS X and your System Folder otherwise appears to be intact.

You should no longer see the alert message when restarting.

B. Use these steps if you are not using Mac OS X or if you suspect your System Folder is not intact.
Replacing the files in the System Folder or double-clicking the System file should re-bless (reactivate) the System Folder. You can tell a System Folder is blessed when the Mac OS logo badge appears on the folder. If the System Folder is not re-blessed by this point, you may start up from a Mac OS 9 CD-ROM and use Disk First Aid to verify and repair the hard disk. You may also need to reinstall the core Mac OS 9 operating system.

Note: A Mac OS 9 System Folder used for the Classic environment must be reinstalled by the clean installation method. See technical document 106294: "Mac OS X 10.0: How to Reinstall Mac OS 9 or Recover From a Software Restore"
Published Date: Feb 18, 2012