diff --git a/platform/platform-resources/src/META-INF/XmlPlugin.xml b/platform/platform-resources/src/META-INF/XmlPlugin.xml
index 6340ee08e1d9..a8236a81ab31 100644
--- a/platform/platform-resources/src/META-INF/XmlPlugin.xml
+++ b/platform/platform-resources/src/META-INF/XmlPlugin.xml
@@ -106,6 +106,7 @@
 
     <applicationService serviceInterface="com.intellij.javaee.ExternalResourceManager"
                         serviceImplementation="com.intellij.javaee.ExternalResourceManagerImpl"/>
+    <project.converterProvider implementation="com.intellij.javaee.DefaultHtmlDoctypeConverter"/>
 
     <standardResourceProvider implementation="com.intellij.javaee.InternalResourceProvider"/>
 
diff --git a/xml/impl/src/com/intellij/javaee/DefaultHtmlDoctypeConverter.java b/xml/impl/src/com/intellij/javaee/DefaultHtmlDoctypeConverter.java
new file mode 100644
index 000000000000..7a5c0244b5c6
--- /dev/null
+++ b/xml/impl/src/com/intellij/javaee/DefaultHtmlDoctypeConverter.java
@@ -0,0 +1,92 @@
+package com.intellij.javaee;
+
+import com.intellij.conversion.*;
+import com.intellij.openapi.util.io.FileUtil;
+import org.jdom.Element;
+import org.jetbrains.annotations.NotNull;
+import org.jetbrains.annotations.Nullable;
+
+import java.io.File;
+import java.util.Collection;
+import java.util.Collections;
+
+/**
+ * @author Eugene.Kudelevsky
+ */
+public class DefaultHtmlDoctypeConverter extends ConverterProvider {
+  protected DefaultHtmlDoctypeConverter() {
+    super("default-html-language-level");
+  }
+
+  @NotNull
+  @Override
+  public String getConversionDescription() {
+    return "Default HTML language level setting will be updated";
+  }
+
+  @NotNull
+  @Override
+  public ProjectConverter createConverter(@NotNull ConversionContext context) {
+    return new MyConverter(context);
+  }
+
+  private static class MyConverter extends ProjectConverter {
+    private final ConversionContext myContext;
+
+    private MyConverter(@NotNull ConversionContext context) {
+      myContext = context;
+    }
+
+    @Override
+    public boolean isConversionNeeded() {
+      return getElementToUpdate() != null;
+    }
+
+    @Override
+    public void preProcessingFinished() throws CannotConvertException {
+      final Element defaultHtmlDoctype = getElementToUpdate();
+
+      if (defaultHtmlDoctype != null) {
+        defaultHtmlDoctype.setText(ExternalResourceManagerImpl.HTML5_DOCTYPE_ELEMENT);
+      }
+    }
+
+    @Nullable
+    private Element getElementToUpdate() {
+      final ComponentManagerSettings settings = myContext.getProjectRootManagerSettings();
+      if (settings == null) {
+        return null;
+      }
+
+      final Element root = settings.getComponentElement("ProjectResources");
+      if (root == null) {
+        return null;
+      }
+
+      Element defaultHtmlDoctype = root.getChild("default-html-language-level");
+      if (defaultHtmlDoctype == null) {
+        return null;
+      }
+
+      String value = defaultHtmlDoctype.getTextTrim();
+      value = value != null ? myContext.expandPath(value) : null;
+      if (value == null) {
+        return null;
+      }
+
+      if (!FileUtil.toSystemIndependentName(value).endsWith("idea.jar!/resources/html5-schema/html5.rnc")) {
+        return null;
+      }
+      return defaultHtmlDoctype;
+    }
+
+    @Override
+    public Collection<File> getAdditionalAffectedFiles() {
+      final ComponentManagerSettings settings = myContext.getProjectRootManagerSettings();
+      final File file = settings != null ? settings.getFile() : null;
+      return file != null
+             ? Collections.singletonList(file)
+             : Collections.<File>emptyList();
+    }
+  }
+}
diff --git a/xml/impl/src/com/intellij/javaee/ExternalResourceManagerImpl.java b/xml/impl/src/com/intellij/javaee/ExternalResourceManagerImpl.java
index be0783628e78..32d1a1be74ec 100644
--- a/xml/impl/src/com/intellij/javaee/ExternalResourceManagerImpl.java
+++ b/xml/impl/src/com/intellij/javaee/ExternalResourceManagerImpl.java
@@ -101,10 +101,12 @@ public class ExternalResourceManagerImpl extends ExternalResourceManagerEx imple
   @NonNls private static final String URL_ATTR = "url";
   @NonNls private static final String LOCATION_ATTR = "location";
   @NonNls private static final String IGNORED_RESOURCE_ELEMENT = "ignored-resource";
-  @NonNls private static final String HTML_DEFAULT_DOCTYPE_ELEMENT = "default-html-doctype";
+  @NonNls private static final String HTML_DEFAULT_DOCTYPE_ELEMENT = "default-html-language-level";
   private static final String DEFAULT_VERSION = null;
   @NonNls public static final String STANDARD_SCHEMAS = "/standardSchemas/";
 
+  public static String HTML5_DOCTYPE_ELEMENT = "HTML5";
+
   public ExternalResourceManagerImpl(PathMacrosImpl pathMacros) {
     myPathMacros = pathMacros;
   }
@@ -361,7 +363,14 @@ public class ExternalResourceManagerImpl extends ExternalResourceManagerEx imple
 
     Element child = element.getChild(HTML_DEFAULT_DOCTYPE_ELEMENT);
     if (child != null) {
-      myDefaultHtmlDoctype = child.getText();
+      final String text = child.getText();
+
+      if (HTML5_DOCTYPE_ELEMENT.equals(text)) {
+        myDefaultHtmlDoctype = Html5SchemaProvider.HTML5_SCHEMA_LOCATION;
+      }
+      else {
+        myDefaultHtmlDoctype = text;
+      }
     }
     Element catalogElement = element.getChild(CATALOG_PROPERTIES_ELEMENT);
     if (catalogElement != null) {
@@ -392,7 +401,14 @@ public class ExternalResourceManagerImpl extends ExternalResourceManagerEx imple
 
     if (myDefaultHtmlDoctype != null) {
       final Element e = new Element(HTML_DEFAULT_DOCTYPE_ELEMENT);
-      e.setText(myDefaultHtmlDoctype);
+
+      if (Html5SchemaProvider.HTML5_SCHEMA_LOCATION.equals(myDefaultHtmlDoctype)) {
+        // do not store the path to html5 schema in project settings
+        e.setText(HTML5_DOCTYPE_ELEMENT);
+      }
+      else {
+        e.setText(myDefaultHtmlDoctype);
+      }
       element.addContent(e);
     }
     if (myCatalogPropertiesFile != null) {
diff --git a/xml/impl/src/com/intellij/xml/Html5SchemaProvider.java b/xml/impl/src/com/intellij/xml/Html5SchemaProvider.java
index 729c9395a61f..218498bfc497 100644
--- a/xml/impl/src/com/intellij/xml/Html5SchemaProvider.java
+++ b/xml/impl/src/com/intellij/xml/Html5SchemaProvider.java
@@ -3,8 +3,9 @@ package com.intellij.xml;
 import com.intellij.javaee.ExternalResourceManagerImpl;
 import com.intellij.openapi.diagnostic.Logger;
 import com.intellij.openapi.extensions.ExtensionPointName;
-import com.intellij.openapi.util.io.FileUtil;
 import com.intellij.openapi.vfs.VfsUtil;
+import com.intellij.openapi.vfs.VfsUtilCore;
+import com.intellij.util.io.URLUtil;
 import org.jetbrains.annotations.NotNull;
 
 import java.net.URL;
@@ -46,12 +47,12 @@ public abstract class Html5SchemaProvider {
       xhtmlSchemaLocationURL = htmlSchemaLocationURL;
     }
 
-    HTML5_SCHEMA_LOCATION =
-      VfsUtil.urlToPath(VfsUtil.fixURLforIDEA(FileUtil.unquote(htmlSchemaLocationURL.toExternalForm())));
+    HTML5_SCHEMA_LOCATION = VfsUtilCore.urlToPath(VfsUtil.fixURLforIDEA(
+      URLUtil.unescapePercentSequences(htmlSchemaLocationURL.toExternalForm())));
     LOG.info("HTML5_SCHEMA_LOCATION = " + HTML5_SCHEMA_LOCATION);
 
-    XHTML5_SCHEMA_LOCATION =
-      VfsUtil.urlToPath(VfsUtil.fixURLforIDEA(FileUtil.unquote(xhtmlSchemaLocationURL.toExternalForm())));
+    XHTML5_SCHEMA_LOCATION = VfsUtilCore.urlToPath(VfsUtil.fixURLforIDEA(
+      URLUtil.unescapePercentSequences(xhtmlSchemaLocationURL.toExternalForm())));
     LOG.info("XHTML5_SCHEMA_LOCATION = " + XHTML5_SCHEMA_LOCATION);
   }