A system and method for streaming an install package into a virtual environment. The system includes a server and a client. The server streams an install package to the client as a series of streamlets. The client starts an installer component in a suspended state outside the virtual environment. The client registers the installer component in the virtual environment and initiates execution of the installer component in the virtual environment to receive portions of the install package and install the received portions of the install package in the virtual environment. During package installation, a virtualization manager detects an attempt to execute a call to a file system and confines file system changes resulting from the call to the virtual environment in response to determining that the attempt was made by the installer component and the installer component is registered in the virtual environment.