diff --git a/src/app/qgsbrowserdockwidget.cpp b/src/app/qgsbrowserdockwidget.cpp
index 33f2f20..4b87a88 100644
--- a/src/app/qgsbrowserdockwidget.cpp
+++ b/src/app/qgsbrowserdockwidget.cpp
@@ -287,9 +287,12 @@ void QgsBrowserDockWidget::showEvent( QShowEvent * e )
         mBrowserView->expand( index );
     }
 
-    connect( QgsProject::instance(), SIGNAL( readProject( const QDomDocument & ) ), mModel, SLOT( reload() ) );
-    connect( QgsProject::instance(), SIGNAL( writeProject( QDomDocument & ) ), mModel, SLOT( reload() ) );
-    connect( QgisApp::instance(), SIGNAL( newProject() ), mModel, SLOT( reload() ) );
+    // connect( QgsProject::instance(), SIGNAL( readProject( const QDomDocument & ) ), mModel, SLOT( reload() ) );
+    // connect( QgsProject::instance(), SIGNAL( writeProject( QDomDocument & ) ), mModel, SLOT( reload() ) );
+    // connect( QgisApp::instance(), SIGNAL( newProject() ), mModel, SLOT( reload() ) );
+    connect( QgsProject::instance(), SIGNAL( readProject( const QDomDocument & ) ), this, SLOT( setProjectHome() ) );
+    connect( QgsProject::instance(), SIGNAL( writeProject( QDomDocument & ) ), this, SLOT( setProjectHome() ) );
+    connect( QgisApp::instance(), SIGNAL( newProject() ), this, SLOT( setProjectHome() ) );
   }
 
   QDockWidget::showEvent( e );
@@ -425,7 +428,7 @@ void QgsBrowserDockWidget::refreshModel( const QModelIndex& index )
     QgsDataItem *item = mModel->dataItem( index );
     if ( item )
     {
-      QgsDebugMsg( "path = " + item->path() );
+      QgsDebugMsg( QString( "path %1 has %2 children" ).arg( item->path() ).arg( mModel->rowCount( index ) ) );
     }
     else
     {
@@ -663,3 +666,9 @@ void QgsBrowserDockWidget::setFilterSyntax( QAction * action )
     return;
   mProxyModel->setFilterSyntax(( QRegExp::PatternSyntax ) action->data().toInt() );
 }
+
+void QgsBrowserDockWidget::setProjectHome()
+{
+  mModel->setProjectHome();
+  refresh();
+}
diff --git a/src/app/qgsbrowserdockwidget.h b/src/app/qgsbrowserdockwidget.h
index 2e7a87b..5ae8afb 100644
--- a/src/app/qgsbrowserdockwidget.h
+++ b/src/app/qgsbrowserdockwidget.h
@@ -67,6 +67,10 @@ class QgsBrowserDockWidget : public QDockWidget, private Ui::QgsBrowserDockWidge
     QgsBrowserTreeView* mBrowserView;
     QgsBrowserModel* mModel;
     QgsBrowserTreeFilterProxyModel* mProxyModel;
+
+  protected slots:
+    void setProjectHome();
+
 };
 
 #endif // QGSBROWSERDOCKWIDGET_H
diff --git a/src/core/qgsbrowsermodel.cpp b/src/core/qgsbrowsermodel.cpp
index 334bc00..d33a827 100644
--- a/src/core/qgsbrowsermodel.cpp
+++ b/src/core/qgsbrowsermodel.cpp
@@ -43,13 +43,12 @@ void QgsBrowserModel::addRootItems()
 {
   QgsDirectoryItem *item;
 
+  // project home, default is current path (where application was started)
   QString home = QgsProject::instance()->homePath();
-
-  if ( !home.isNull() )
-  {
-    item = new QgsDirectoryItem( NULL, tr( "Project home" ), home );
-    mRootItems << item;
-  }
+  if ( home.isNull() )
+    home = QDir::currentPath();
+  item = new QgsDirectoryItem( NULL, tr( "Project home" ), home );
+  mRootItems << item;
 
   // give the home directory a prominent second place
   item = new QgsDirectoryItem( NULL, tr( "Home" ), QDir::homePath() );
@@ -261,11 +260,42 @@ QModelIndex QgsBrowserModel::findPath( QString path )
 
 void QgsBrowserModel::reload()
 {
+  QgsDebugMsg( "entered" );
   removeRootItems();
   addRootItems();
   reset(); // Qt4.6 brings better methods beginResetModel + endResetModel
 }
 
+void QgsBrowserModel::setProjectHome()
+{
+  // project home, default is current path (where application was started)
+  QString home = QgsProject::instance()->homePath();
+  if ( home.isNull() )
+    home = QDir::currentPath();
+
+  // search for project home item and replace it with new item
+  // if old home is same as new home, do nothing
+  // if not found something is broken because it should be created in addRootItems()
+  for( int i=0; i<mRootItems.count(); i++ )
+  {
+    QgsDataItem* item = mRootItems[i];
+    if ( item && item->name() == tr( "Project home" ) )
+    {
+      QgsDebugMsg( QString( "found project home item (%1), new home (%2)" ).arg( item->path() ).arg( home ) );
+      if ( item->path() != home )
+      {
+        delete item;
+        item = new QgsDirectoryItem( NULL, tr( "Project home" ), home );
+        mRootItems[i] = item;
+        item->refresh();
+        QgsDebugMsg( QString( "new project item has %1 children" ).arg( item->rowCount() ) );
+      }
+      break;
+    }
+  }
+
+}
+
 /* Refresh dir path */
 void QgsBrowserModel::refresh( QString path )
 {
diff --git a/src/core/qgsbrowsermodel.h b/src/core/qgsbrowsermodel.h
index b0ef32f..e5807ef 100644
--- a/src/core/qgsbrowsermodel.h
+++ b/src/core/qgsbrowsermodel.h
@@ -92,6 +92,7 @@ class CORE_EXPORT QgsBrowserModel : public QAbstractItemModel
   public slots:
     // Reload the whole model
     void reload();
+    void setProjectHome();
 
     void beginInsertItems( QgsDataItem *parent, int first, int last );
     void endInsertItems();