Apple TV: How to perform a factory restore
Summary
You can restore Apple TV's software from the main menu by selecting Settings > General > Reset Settings > Factory Restore.
Products Affected
Apple TV
An Apple logo appears with a progress indicator underneath it. Do not unplug the power cable from your Apple TV during the restore process. Your Apple TV will automatically restart when the restore process is complete.
You can also access the restore option and diagnostic software from the Apple TV Recovery screen. See "Apple TV: How to run diagnostics" for steps to access this.
Note: Using the Factory Restore will erase the network settings and any video, music, and photos stored on your Apple TV. You will need to set up a network connection and resync with iTunes to restore your content after the Factory Restore has completed.