Whenever my system drive reports that there is no space left, my usual suspect is the SharePoint trace log, it is located under the 12 hive folder at LOGS. Clearing this folder up usually frees up a couple of gigabytes but it’s not uncommon to have hundreds of gigs worth of logs on your system drive. Since this folder continually grows, it is a good idea to store it somewhere else, in a different drive or partition.

Below are the steps to change the default SharePoint log directory:

1. Login to Central Administration site
2. Go to Operations tab, and click on Diagnostic Logging.
3. Scroll down the page, under the Trace Log section.

You may also change the number of logs to be kept and how long does each file will be used. Make sure that you have enough space as this folder will keep on growing.

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