diff --git a/platform/platform-impl/src/com/intellij/idea/StartupUtil.java b/platform/platform-impl/src/com/intellij/idea/StartupUtil.java
index d144ba429f34..5412e6e1f3eb 100644
--- a/platform/platform-impl/src/com/intellij/idea/StartupUtil.java
+++ b/platform/platform-impl/src/com/intellij/idea/StartupUtil.java
@@ -99,6 +99,26 @@ public class StartupUtil {
     return true;
   }
 
+  private synchronized static boolean checkSystemFolders() {
+    final String configPath = PathManager.getConfigPath();
+    if (configPath == null || !new File(configPath).isDirectory()) {
+      showError("Invalid config path", "Config path '" + configPath + "' is invalid.\n" +
+                                       "If you have modified the 'idea.config.path' property please make sure it is correct,\n" +
+                                       "otherwise please re-install the IDE.");
+      return false;
+    }
+
+    final String systemPath = PathManager.getSystemPath();
+    if (systemPath == null || !new File(systemPath).isDirectory()) {
+      showError("Invalid system path", "System path '" + systemPath + "' is invalid.\n" +
+                                       "If you have modified the 'idea.system.path' property please make sure it is correct,\n" +
+                                       "otherwise please re-install the IDE.");
+      return false;
+    }
+
+    return true;
+  }
+
   private synchronized static boolean lockSystemFolders(String[] args) {
     if (ourLock == null) {
       ourLock = new SocketLock();
@@ -169,12 +189,14 @@ public class StartupUtil {
       return false;
     }
 
-
     return true;
   }
 
   static boolean checkStartupPossible(String[] args) {
-    return checkJdkVersion() && lockSystemFolders(args) && checkTmpIsAccessible();
+    return checkJdkVersion() &&
+           checkTmpIsAccessible() &&
+           checkSystemFolders() &&
+           lockSystemFolders(args);
   }
 
   static void runStartupWizard() {
diff --git a/platform/util/src/com/intellij/openapi/application/PathManager.java b/platform/util/src/com/intellij/openapi/application/PathManager.java
index c053d8f6b176..d9ef319b731f 100644
--- a/platform/util/src/com/intellij/openapi/application/PathManager.java
+++ b/platform/util/src/com/intellij/openapi/application/PathManager.java
@@ -1,5 +1,5 @@
 /*
- * Copyright 2000-2009 JetBrains s.r.o.
+ * Copyright 2000-2012 JetBrains s.r.o.
  *
  * Licensed under the Apache License, Version 2.0 (the "License");
  * you may not use this file except in compliance with the License.
@@ -156,11 +156,11 @@ public class PathManager {
   public static boolean ensureConfigFolderExists(final boolean createIfNotExists) {
     getConfigPathWithoutDialog();
 
-    File file = new File(ourConfigPath);
+    final File file = new File(ourConfigPath);
     if (createIfNotExists && !file.exists()) {
-      file.mkdirs();
-      return true;
+      return file.mkdirs();  // shouldn't copy configs if failed to create new directory
     }
+
     return false;
   }