How to reset your Xbox One console to factory defaults using a USB flash drive
Note If the console is experiencing an issue that requires you to Restore Factory Defaults, but you can’t access the Settings hub on your Xbox One console, use this process.
Warning Using this method to restore your console to the factory default settings erases all accounts, apps, games, saved games, and settings. Anything not synchronized with Xbox Live will be lost. Your console syncs with Xbox Live automatically when it’s connected with the service.
To use the USB flash drive to restore your console to factory defaults, you'll need:
A Windows-based PC with an Internet connection and a USB port.
A USB flash drive with a minimum 4 GB of space formatted as NTFS.
Click Save to save the console update .zip file to your computer.
To unzip the compressed file, right-click on the file and then select Extract all from the pop-up menu.
Copy the $SystemUpdate file from the .zip file to your USB flash drive.
Note The files should be copied to the root directory, and there shouldn't be any other files on the flash drive.
Unplug the flash drive from your computer.
Step 2: On your Xbox One console
Unplug the network cable if you're using a wired network connection.
Power off your console, and then unplug the power cord to ensure that the console is completely powered off.
Wait 30 seconds.
Plug the power cord back in.
Plug the flash drive into a USB port on your console.
Press and hold the BIND button (located on the left side of the console) and the EJECT button (located on the front of the console), and then press the Xbox button on the console.
Continue holding the BIND and EJECT buttons for 10-15 seconds.
Listen for two “power-up” tones a couple of seconds apart.
Note If you don't hear two power-up tones after 15 seconds, it means this failed. Likewise, if you hear any “power-down” chirps, that also means this failed.
You can release the BIND and EJECT buttons after the second power-up tone.
When the console restarts, remove the flash drive.
Once the console restarts, you should see the digital setup experience to guide you through resetting your console. For additional help, see Set up your Xbox One console.
Note The console restart may take several minutes. If you’re using a wired connection, plug your network cable back into the console. If you have never connected your console to the Internet, you will need to connect at least once during the system setup process.
About the buttons and beeps
Pressing the BIND and EJECT buttons at the same time forces the console to look for the USB drive update, as the console will not look for a USB drive unless it needs it. This helps to decrease console start times for all startups when this step is not needed.
The first power-up tone will occur approximately 10 seconds after powering up. This indicates that a USB update has been detected. The second power-up tone indicates that the update file has been copied and mounted. This is important, as it confirms you have successfully initiated the process.