Step 1: Before you start with the jailbreak process, download the following software:
RedSnow 0.9.9b7 for Mac/Windows
iPhone 4 iOS 5.0 Firmware
Latest version of iTunes
*links available in Download Section below
Step 2: Make sure your iPhone is connected to the computer. Now, launch the RedSnow application. On the RedSnow welcome screen, press the Extras button to continue.
Step 3: In order to jailbreak without updating the baseband, you will have to build a custom firmware file using Apple’s iOS 5. From the available options, press the “Custom IPSW" button to continue to build a custom firmware file for your iPhone.
Step 4: You will now be asked to select the iOS 5 firmware file that you just downloaded. Select the file and click open. RedSnow will now automatically build a custom firmware file for your iPhone 4.
Once the process is complete, redSnow will notify you with a screen that shows the location where the custom ipsw file was saved along with a self explanatory note that says, “Do not use the custom firmware file. Use the file whose name begins with NO__BB".
Click the Ok button to continue.
Step 5: Once you are back at the extras menu, press the Pwned DFU button to continue with the jailbreak process using custom iOS 5 firmware file.
You will now be asked to put your iPhone into DFU mode. Follow the link here.
Step 6: As soon as redSnow detects your iPhone, it will use the LimeRa1n exploit to prepare your iPhone for update to the custom firmware file. Once the process is complete, it will show you a message window that says, “Your iPhone is now in pwned dfu mode and ready for iTunes to accept custom ipsw file."
Step 7: Launch iTunes, while your iPhone is connected to the computer. Cancel the message, if you are asked to update to the new iOS 5. Instead, hold down the Option key and press the Restore button.
Finally, select the custom firmware file whose name starts with “NO_BB" to restore your iPhone with the custom firmware file.
iTunes will now restore your iPhone using the custom ipsw file.
To jailbreak your iPhone 4 with a custom iOS 5 firmware file, follow steps 4-6 from this guide here. Once you complete the steps carefully, you will have a jailbroken iPhone running the new iOS 5.
Since, this is a tethered jailbreak; you will have to use RedSnow to boot your iPhone.
Step 1: Make sure your iPhone is connected to the computer. Now, launch RedSnow and press the Extras button to continue.
Step 2: From the list in the Extras menu, press the “Just boot" button to boot your iPhone. You will now be asked to put your iPhone in DFU mode. Once in DFU mode, RedSnow will upload the LimeRa1n exploit to make sure that your iPhone reboots.