Question: running the following command

```
virtualenv -p /usr/local/bin/pypy pypy

```

exits with error like

```
Running virtualenv with interpreter /usr/local/bin/pypy
New pypy executable in pypy/bin/pypy
debug: WARNING: Library path not found, using compiled-in sys.path.
debug: WARNING: 'sys.prefix' will not be set.
debug: WARNING: Make sure the pypy binary is kept inside its tree of files.
debug: WARNING: It is ok to create a symlink to it from somewhere else.
'import site' failed
AttributeError: 'module' object has no attribute 'prefix'
ERROR: The executable pypy/bin/pypy is not functioning
ERROR: It thinks sys.prefix is u'/Users/myname' (should be u'/Users/myname/pypy')
ERROR: virtualenv is not compatible with this system or executable

```

I'm running Mac OS X 10.8.1 (Mountain Lion) with CPython 2.7.3 and installed pypy 1.9 using Brew. virtualenv's version is 1.8.4

Using pre-built pypy binary for Mac OS X downloaded directly from pypy's website doesn't make any difference

Answer: 
This appears to be a regression in 1.8.4. While trying this out on my system everything worked fine with virtualenv 1.8.2, then I upgraded and now I get the same error as you.
I got the same error on Windows using virtualenv 1.8.2. Also similar problems with 1.9 and 1.10. What worked for me was to run it once to make the directory, copy missing files, then run again to complete it.

```
virtualenv -p c:\bin\pypy\pypy.exe pypy
copy c:\bin\pypy\lib_pypy \virtualenvs\pypy
copy c:\bin\pypy\lib-python \virtualenvs\pypy
virtualenv -p c:\bin\pypy\pypy.exe pypy

```