diff --git a/java/idea-ui/src/com/intellij/ide/projectWizard/ProjectSettingsStep.java b/java/idea-ui/src/com/intellij/ide/projectWizard/ProjectSettingsStep.java
index b964013d274d..3c9af05e10c5 100644
--- a/java/idea-ui/src/com/intellij/ide/projectWizard/ProjectSettingsStep.java
+++ b/java/idea-ui/src/com/intellij/ide/projectWizard/ProjectSettingsStep.java
@@ -88,6 +88,7 @@ public class ProjectSettingsStep extends ModuleWizardStep implements SettingsSte
 
     myFormatPanel = new ProjectFormatPanel();
     myNamePathComponent = NamePathComponent.initNamePathComponent(context);
+    myNamePathComponent.setShouldBeAbsolute(true);
     if (context.isCreatingNewProject()) {
       mySettingsPanel.add(myNamePathComponent, BorderLayout.NORTH);
       addExpertPanel(myModulePanel);
diff --git a/java/idea-ui/src/com/intellij/ide/util/projectWizard/NamePathComponent.java b/java/idea-ui/src/com/intellij/ide/util/projectWizard/NamePathComponent.java
index 66020534bab6..d76fa7437167 100644
--- a/java/idea-ui/src/com/intellij/ide/util/projectWizard/NamePathComponent.java
+++ b/java/idea-ui/src/com/intellij/ide/util/projectWizard/NamePathComponent.java
@@ -59,6 +59,7 @@ public class NamePathComponent extends JPanel{
   private JLabel myNameLabel;
   private JLabel myPathLabel;
   private boolean myForceSync;
+  private boolean myShouldBeAbsolute;
 
   public NamePathComponent(String nameLabelText, String pathLabelText, char nameMnemonic, char locationMnemonic, final String pathChooserTitle, final String pathChooserDescription) {
     this(nameLabelText, pathLabelText, pathChooserTitle, pathChooserDescription, true);
@@ -159,7 +160,9 @@ public class NamePathComponent extends JPanel{
     if (projectFileDirectory.length() == 0) {
       throw new ConfigurationException(IdeBundle.message("prompt.enter.project.file.location", context.getPresentationName()));
     }
-
+    if (myShouldBeAbsolute && !new File(projectFileDirectory).isAbsolute()) {
+      throw new ConfigurationException(StringUtil.capitalize(IdeBundle.message("file.location.should.be.absolute", context.getPresentationName())));
+    }
     final boolean shouldPromptCreation = isPathChangedByUser();
     if (!ProjectWizardUtil
       .createDirectoryIfNotExists(IdeBundle.message("directory.project.file.directory", context.getPresentationName()),
@@ -297,6 +300,10 @@ public class NamePathComponent extends JPanel{
     myTfPath.getDocument().addDocumentListener(adapter);
   }
 
+  public void setShouldBeAbsolute(boolean shouldBeAbsolute) {
+    myShouldBeAbsolute = shouldBeAbsolute;
+  }
+
   private class NameFieldDocument extends PlainDocument {
     public NameFieldDocument() {
       addDocumentListener(new DocumentAdapter() {
diff --git a/platform/platform-resources-en/src/messages/IdeBundle.properties b/platform/platform-resources-en/src/messages/IdeBundle.properties
index a107fc3bd42c..af0753197a74 100644
--- a/platform/platform-resources-en/src/messages/IdeBundle.properties
+++ b/platform/platform-resources-en/src/messages/IdeBundle.properties
@@ -764,6 +764,7 @@ progress.searching.for.sources=Searching for sources in {0}. Please wait.
 prompt.select.source.directory=Select Source Directory
 prompt.new.project.file.name=Enter a file name to create a new {0} {1}
 prompt.enter.project.file.location=Enter {0} file location
+file.location.should.be.absolute={0} location path should be absolute
 directory.project.file.directory=The {0} file directory\n
 prompt.overwrite.project.file=The {1} file \n''{0}''\nalready exists.\nWould you like to overwrite it?
 prompt.overwrite.project.folder={0} folder already exists in {1}.\nIts content may be overwritten.\nContinue?