A system and method for on-demand application delivery. A computing system comprises a streaming server and a client computer coupled to one another via a network. In response to a request to install a given application on the client computer, the client computer sends a streaming request to the streaming server for retrieving files from an installation snapshot. The client computer identifies files determined to be utilized during an initial launch and execution of the given application. For these identified files, the client computer creates a corresponding physical file. For other files, the client computer adds corresponding metadata in an index of files and no physical file is created at this time. For file system access requests, the client computer utilizes the metadata stored within the index of files to handle the requests. In response to a request for access to a file not installed on the client, a request is generated to retrieve the file from the server.