Physical (or prior virtual) machine volumes can be converted to virtual machines at a virtual machine host while the physical machines are running. In one implementation, a volume shadow copy service can be used to create an application (and/or file system)-consistent snapshot of one or more physical machine volumes while the one or more volumes are running. The snapshot data can then be transferred to a mounted virtual hard disk file (dynamic or fixed) at a virtual machine host. Operational information (e.g., boot record, system registry, drivers, devices, configuration preferences, etc.) associated with the virtual hard disk file and the operating system(s) within the virtual machine can then be modified as appropriate to ensure that the corresponding virtual machine is bootable and functional at the virtual machine host. The virtual hard disk file can then be un-mounted, and used as a new virtual machine.