Now that Greenpois0n RC5 finally provides the long awaited iOS 4.2.1 untethered jailbreak (without the need of SHSH Blobs), many iPhone 4 owners with unlocked iPhones’ have been told to hold off upgrading to 4.2.1 as you will lose the ability to unlock (for now).

But thanks to TinyUmbrella developer @notcom, there is now a way to upgrade to iOS 4.2.1 without upgrading your baseband. Unfortunately, currently you will only be able to unlock your iPhone 4 on the older 1.59.00 baseband (modem firmware). So if you are not on the older baseband, you will not be able to unlock your iPhone 4.

For those of you with the older 1.59.00 baseband, follow the guide below to preserve your iPhone 4 baseband and unlock and jailbreak your iPhone 4 on iOS 4.2.1…

Note: If you are unsure as to what baseband your iPhone 4 is on, launch Settings > General > About  > Modem Firmware.

Step 1: Download TinyUmbrella from here

Step 2: Connect your iPhone 4 & Launch TinyUmbrella

Step 3: Click On the “Save SHSH” button

Step 4: Now, Click on start the “TSS Server” button

Step 5: While the TSS server is running, Launch iTunes

Step 6: Now, Click on Restore in iTunes (Don’t Click on Update)

Step 7: During the Restore Process, iTunes will give you Error 1013. Don’t panic, this is good. This error means your baseband has been preserved. Exit out of iTunes.

Step 8: Next, jailbreak your iPhone 4 with Greenpois0n RC5 (follow our tutorial here). This will jailbreak your iPhone 4 as well as kick it out of Recovery Mode.

Step 9: Because Greenpois0n does not support hacktivation, you will need to find an official SIM card (doesn’t need to be activated), insert it in the iPhone 4 and connect to iTunes. This will bring you to the homescreen. Once you are on the homescreen, you will no longer need the official SIM card.

Step 10: Follow our tutorial here to unlock your iPhone 4 on baseband 1.59.00.

All done! Enjoy your unlocked and jailbroken iPhone 4 on iOS 4.2.1!