You need to download the iPhone firmware 3. Create Custom Firmware 3. You will see the following warning message, click OK. Please select the Expert Mode from the menu bar in the next screen. Then select iPhone 3GS from the options presented and then click on the blue arrow button to continue. If PwnageTool doesn't automatically find the ipsw file you can click Browse and select the file.
Then click the blue arrow button to continue. In the next screen, select General and then click on the blue arrow button to continue. The General settings allows you to decide the partition size you have to increase the size of the root partition to MB. Keep "Activate the phone" option checked if you want to unlock your iPhone or deselect it if you are using an official iPhone carrier.
Click the blue arrow button to continue. In the next screen, you will see the Bootneuter settings greyed out for iPhone 3GS. In the next Cydia settings screen; you can pre-install the packages in the custom firmware so you don't have to manually install them later. Select the packages and click the blue arrow button to continue.
The Custom Logos Settings screen allows you to change the boot and restore logos. Once you have selected the boot and restore logos, click the blue arrow button to continue. In the next screen, select Build and then click on the blue arrow button to continue. While building the custom firmware, you will be prompted to enter a password.
Enter your administrator password and then click OK. Click the Ok button to continue. Disconnect your iPhone 3GS from your computer. Turn off your iPhone 3GS. Continue holding the Home button while your iPhone starts up.
While starting up, you will see the Apple logo. When you see "Connect to iTunes" on the screen, you can release the Home button and iTunes will display the recovery mode message as seen below: You can now use the custom iPhone firmware created using the PwnageTool 3. If you are using Windows hold down Shift and press the Restore button. Once your iPhone 3GS is restored, it will be jailbroken and updated with iPhone firmware 3.
The last step is to set up your iPhone 3GS from a backup. Updated the instructions for putting iPhone 3GS in recovery mode thanks to feedback from our readers. As always, don't forget to drop us a line to tell us how it goes.