Excahnge 2013 setup fails with error local domain needs to be prepared.  Have run domain prepare and it completes succesfully but server install still fails with this error message.

Post the complete and exact error message you receive, and all the steps you've taken up to the error.

[09/07/2013 01:14:15.0950] [1] Evaluated [Rule:SendConnectorException] [HasException:False] [Value:"False"] [ParentValue:"System.DirectoryServices.ResultPropertyCollection"] [Thread:54] [Duration:00:00:05.6318898]
[09/07/2013 01:14:15.0950] [1] Finished [Rule:SendConnectorException] [Duration:00:00:05.6318898]
[09/07/2013 01:14:15.0965] [1] Finished [Analysis:Prereq] [Duration:00:00:05.8035036]
[09/07/2013 01:14:15.0965] [1] Failed [Rule:DomainPrepRequired] [Message:The local domain needs to be prepared using Setup /PrepareDomain before server roles can be installed.]
[09/07/2013 01:14:16.0059] [1] [REQUIRED] The local domain needs to be prepared using Setup /PrepareDomain before server roles can be installed.

[09/07/2013 01:14:16.0059] [1] Ending processing test-SetupPrerequisites
[09/07/2013 01:14:16.0074] [0] The Exchange Server setup operation didn't complete.  More details can be found in ExchangeSetup.log located in the <SystemDrive>:\ExchangeSetupLogs folder.

I have run .\setup /preparead /iaccecptexchangeserverlicenseterms

.\setup /prepareschema /iacceptexchangeserverlicenseterms

on our top level domain

thne ran .\setup /preparedomain .iacceptexchangeserverlicenseterms on the sub domain where the exchange servers are installed.

then ran setup on the exchange server and received the above message.

Are you sure all the pre-requisites are installed and also check if you are getting any errors on the application/system event logs on the server.

This error message simply means you have to run the commands in the order

1. setup /PrepareSchema 

Connects to the schema master and imports LDAP Data Interchange Format (LDIF) files to update the schema with Exchange 2013 specific attributes

Sets the schema version

2. setup /PrepareAllDomains

prepare all domains in your organization

How many domains do you have?  Try running setup /preparealldomains.

Already tried that to.

Did you ever resolve this?

What ended up being the solution?  I'm having the same issue.