Three possibilities come to mind:
(But I seriously doubt number three applies to you)
1. There may be coding errors in your database. The database cannot be converted to an MDE file if
there are any coding errors. Open any code module and, from the VBA menu, select Debug, then
Compile. If there are any errors, you will see an error message and the problem line of code will be
highlighted. You will need to correct any problems the compiler finds. Continue compiling until the
compile process completes with no error messages at all. Then try making an MDE file from the
database. Always keep lots of backup copies of the original MDB file.
2. If you are using Access 2002 or 2003, the default database format is Access 2000 unless you have
changed this. Unfortunately, if you use the Access 2000 database format in Access 2002 or 2003, you
cannot create an MDE. You may only create an MDE of an Access 2000-format database using Access
2000. So to make a 2002 MDE file, you must convert it to 2002 format and use 2002 to make the MDE
file. The same is true for 2003: you need to convert the file to 2003 format and use 2003 to make an
MDE in 2003 format.
3. See this link for another possibility:
ACC2002: Error Message: "Microsoft Access Was Unable to Create an MDE Database"
http://support.microsoft.com/?id=289686