Proxmox for Beginners: Your First Virtual Machine

This page may contain affiliate links.

If you have ever priced up a cloud VPS for a side project and quietly closed the tab, Proxmox is the answer you have been circling around. Proxmox Virtual Environment (VE) is a free, open-source hypervisor — the software layer that lets one physical machine pretend to be several. Install it on an old desktop, a mini PC, or a retired office workstation, and you suddenly have your own little data centre humming away under the stairs. This guide walks you through installing Proxmox and creating your first virtual machine, without assuming you have ever touched a hypervisor before.

What you actually need before you start

Proxmox runs on bare metal, which means it wipes whatever is on the drive you install it to. Do not install it on your daily driver. A dedicated machine is strongly preferred.

On the hardware side, the practical minimum is a 64-bit CPU with virtualisation extensions enabled in the BIOS (Intel VT-x or AMD-V), 8GB of RAM, and a 128GB SSD. You can technically run it on 4GB, but you will feel the squeeze the moment you boot a second VM. A second small SSD for VM storage is a nice upgrade but not essential to get going.

On the software side you need the Proxmox VE ISO, which you download free from the official Proxmox site, and a tool to write it to a USB stick. Balena Etcher is the least fussy option on Windows and macOS. A 4GB or larger USB stick is plenty.

One genuinely useful bit of kit: a cheap USB-to-Ethernet adapter. If your chosen machine only has one network port and you later want to experiment with pfSense or OPNsense as a virtual router, having a second NIC saves you a world of pain. A basic USB 3.0 gigabit adapter is a sensible thing to have in a drawer — you can browse options here: USB 3.0 to Gigabit Ethernet adapter.

Installing Proxmox VE

Boot from your USB stick. The installer is text-based and refreshingly quick. The prompts that matter:

• Target hard disk: pick your SSD. Everything on it goes.
• Country and timezone: United Kingdom, and your local timezone.
• Password and email: use a strong root password. The email is only used for alerts.
• Management network: this is the important one. Give the machine a static IP on your LAN, for example 192.168.1.50, with a subnet mask of 255.255.255.0 and your router as the gateway. Set the hostname to something memorable like pve.shed.lan.

When it finishes, reboot, unplug the USB, and from another computer on the same network open a browser and go to https://192.168.1.50:8006. You will get a certificate warning — that is normal, accept it. Log in as root with the password you set.

First job after login: head to your node in the left panel, then Updates, and run a refresh and upgrade. Proxmox ships with an enterprise repository enabled that will throw errors without a subscription. Disable the enterprise repo in the shell by editing /etc/apt/sources.list.d/pve-enterprise.list and commenting out the single line inside, then add the free no-subscription repo instead. After that, updates flow normally.

Uploading an ISO and creating your first VM

You need an operating system to install into your VM. For a first attempt, Ubuntu Server LTS is a good choice — small, well documented, and free. Download the ISO on your laptop, then in the Proxmox web interface click your storage (usually local), choose ISO Images, and upload the file.

Now click Create VM in the top right. Work through the wizard:

• General: give it a name like ubuntu-test and a VM ID (the default is fine).
• OS: select your uploaded ISO, and set Guest OS type to Linux with the matching kernel version.
• System: leave defaults. If you plan to run Docker inside, enable QEMU Agent later.
• Disks: 32GB is generous for a test VM. Enable Discard if your storage supports it.
• CPU: 2 cores is plenty to start.
• Memory: 2048MB. Leave Ballooning enabled so Proxmox can reclaim RAM when the VM is idle.
• Network: leave the default bridge, vmbr0, with the VirtIO model.

Click Finish, then hit Start. Open the Console tab and you will see the Ubuntu installer. The install itself is standard — pick your language, accept defaults, set a username and password, and let it finish.

One thing that catches almost everyone: after installation, Ubuntu will not boot because it is still trying to boot from the ISO. Go to the VM's Hardware tab, select the CD/DVD drive, click Edit, and detach the ISO. Reboot and you are in.

Getting the most out of it

Once your first VM is running, a few habits make life much easier. Take a snapshot before you make any significant change — right-click the VM, Snapshots, Take Snapshot. If you break something, roll back in seconds. This is the single best reason to run a home lab instead of tinkering on your main machine.

Install the QEMU guest agent inside the VM (sudo apt install qemu-guest-agent on Ubuntu) so Proxmox can shut the VM down cleanly and report its IP address.

Set up automatic backups to a separate drive or a network share. Even a weekly backup to a USB disk attached to the host is better than nothing, and it has saved more home labs than any amount of clever configuration.

If you would rather skip the trial-and-error phase, the Home Lab & Automation Pack is a set of ready-made AI prompts for exactly this kind of work — scripting your backups, troubleshooting boot failures, and writing documentation as you go. It is the done-for-you version of the notes most people end up compiling themselves, from £9.

From here, the natural next steps are containers. Proxmox ships with LXC, which runs lightweight Linux containers alongside your VMs with far less overhead. A Pi-hole container for network-wide ad blocking is a classic first project, and it will run happily in 512MB of RAM.

Where to go next

You now have a working hypervisor and a virtual machine you built from scratch. That is the hard part done. Everything else — clustering, ZFS storage, PCIe passthrough for a graphics card, running Home Assistant — is incremental from here.

The real value of Proxmox is not the software itself. It is that it gives you permission to break things. Snapshots mean mistakes are cheap, and cheap mistakes are how you actually learn. Start with one VM, back it up, snapshot it, and then deliberately ruin it just to prove you can roll back. Do that once and you will never be nervous about your home lab again.