diff --git a/java/execution/impl/src/com/intellij/execution/application/ApplicationConfiguration.java b/java/execution/impl/src/com/intellij/execution/application/ApplicationConfiguration.java
index f5a1c9f466c9..f37f94d6942b 100644
--- a/java/execution/impl/src/com/intellij/execution/application/ApplicationConfiguration.java
+++ b/java/execution/impl/src/com/intellij/execution/application/ApplicationConfiguration.java
@@ -22,8 +22,10 @@ import com.intellij.openapi.project.Project;
 import com.intellij.openapi.projectRoots.JavaSdkVersion;
 import com.intellij.openapi.projectRoots.JdkUtil;
 import com.intellij.openapi.projectRoots.ex.JavaSdkUtil;
+import com.intellij.openapi.util.Comparing;
 import com.intellij.openapi.util.io.FileUtilRt;
 import com.intellij.openapi.util.text.StringUtil;
+import com.intellij.openapi.vfs.VirtualFileManager;
 import com.intellij.psi.PsiClass;
 import com.intellij.psi.PsiElement;
 import com.intellij.psi.PsiJavaModule;
@@ -184,24 +186,18 @@ public class ApplicationConfiguration extends ModuleBasedConfiguration<JavaRunCo
 
   @Override
   public void setWorkingDirectory(@Nullable String value) {
-    String normalizedValue = StringUtil.isEmptyOrSpaces(value) ? null : FileUtilRt.toSystemIndependentName(value.trim());
-    if (normalizedValue != null && normalizedValue.equals(getProject().getBasePath())) {
-      normalizedValue = null;
-    }
-
+    String normalizedValue = StringUtil.isEmptyOrSpaces(value) ? null : value.trim();
     //noinspection deprecation
-    WORKING_DIRECTORY = normalizedValue;
-    getOptions().setWorkingDirectory(normalizedValue);
+    WORKING_DIRECTORY = PathUtil.toSystemDependentName(normalizedValue);
+
+    String independentValue = PathUtil.toSystemIndependentName(normalizedValue);
+    getOptions().setWorkingDirectory(Comparing.equal(independentValue, getProject().getBasePath()) ? null : independentValue);
   }
 
   @Override
   public String getWorkingDirectory() {
     //noinspection deprecation
-    String workingDirectory = WORKING_DIRECTORY;
-    if (workingDirectory == null) {
-      return PathUtil.toSystemDependentName(getProject().getBasePath());
-    }
-    return ExternalizablePath.localPathValue(workingDirectory);
+    return WORKING_DIRECTORY;
   }
 
   @Override
@@ -293,9 +289,18 @@ public class ApplicationConfiguration extends ModuleBasedConfiguration<JavaRunCo
     super.readExternal(element);
 
     ApplicationConfigurationOptions options = getOptions();
+
+    String workingDirectory = options.getWorkingDirectory();
+    if (workingDirectory == null) {
+      workingDirectory = PathUtil.toSystemDependentName(getProject().getBasePath());
+    }
+    else {
+      workingDirectory = FileUtilRt.toSystemDependentName(VirtualFileManager.extractPath(workingDirectory));
+    }
+
     MAIN_CLASS_NAME = options.getMainClassName();
     PROGRAM_PARAMETERS = options.getProgramParameters();
-    WORKING_DIRECTORY = options.getWorkingDirectory();
+    WORKING_DIRECTORY = workingDirectory;
     ALTERNATIVE_JRE_PATH = options.getAlternativeJrePath();
     ALTERNATIVE_JRE_PATH_ENABLED = options.isAlternativeJrePathEnabled();
     ENABLE_SWING_INSPECTOR = options.isSwingInspectorEnabled();