diff --git a/django/conf/project_template/manage.py b/django/conf/project_template/manage.py
index 2568a324b1..391dd88ba4 100755
--- a/django/conf/project_template/manage.py
+++ b/django/conf/project_template/manage.py
@@ -1,5 +1,6 @@
 #!/usr/bin/env python
-import os, sys
+import os
+import sys
 
 if __name__ == "__main__":
     os.environ.setdefault("DJANGO_SETTINGS_MODULE", "{{ project_name }}.settings")
diff --git a/django/core/management/templates.py b/django/core/management/templates.py
index 5e7e5741b7..9a4b2c1723 100644
--- a/django/core/management/templates.py
+++ b/django/core/management/templates.py
@@ -89,8 +89,10 @@ class TemplateCommand(BaseCommand):
                     message = e
                 raise CommandError(message)
         else:
-            top_dir = path.expanduser(target)
-
+            top_dir = os.path.abspath(path.expanduser(target))
+            if not os.path.exists(top_dir):
+                raise CommandError("Destination directory '%s' does not "
+                                   "exist, please create it first." % top_dir)
 
         extensions = tuple(
             handle_extensions(options.get('extensions'), ignored=()))
diff --git a/tests/regressiontests/admin_scripts/custom_templates/project_template/manage.py b/tests/regressiontests/admin_scripts/custom_templates/project_template/manage.py
index ad8aafe233..d9843c433f 100755
--- a/tests/regressiontests/admin_scripts/custom_templates/project_template/manage.py
+++ b/tests/regressiontests/admin_scripts/custom_templates/project_template/manage.py
@@ -1 +1,6 @@
-# The manage.py of the {{ project_name }} test project
\ No newline at end of file
+# The manage.py of the {{ project_name }} test project
+
+# template context:
+project_name = '{{ project_name }}'
+project_directory = '{{ project_directory }}'
+secret_key = '{{ secret_key }}'
diff --git a/tests/regressiontests/admin_scripts/tests.py b/tests/regressiontests/admin_scripts/tests.py
index 74fb20f892..669c6e8258 100644
--- a/tests/regressiontests/admin_scripts/tests.py
+++ b/tests/regressiontests/admin_scripts/tests.py
@@ -1534,3 +1534,32 @@ class StartProject(LiveServerTestCase, AdminScriptTestCase):
             with open(os.path.join(base_path, f)) as fh:
                 self.assertEqual(fh.read(),
                     '# some file for customtestproject test project')
+
+    def test_custom_project_template_context_variables(self):
+        "Make sure template context variables are rendered with proper values"
+        template_path = os.path.join(test_dir, 'admin_scripts', 'custom_templates', 'project_template')
+        args = ['startproject', '--template', template_path, 'another_project', 'project_dir']
+        testproject_dir = os.path.join(test_dir, 'project_dir')
+        os.mkdir(testproject_dir)
+        out, err = self.run_django_admin(args)
+        self.addCleanup(shutil.rmtree, testproject_dir)
+        self.assertNoOutput(err)
+        test_manage_py = os.path.join(testproject_dir, 'manage.py')
+        with open(test_manage_py, 'r') as fp:
+            content = fp.read()
+            self.assertIn("project_name = 'another_project'", content)
+            self.assertIn("project_directory = '%s'" % testproject_dir, content)
+
+    def test_custom_project_destination_missing(self):
+        """
+        Make sure an exception is raised when the provided
+        destination directory doesn't exist
+        """
+        template_path = os.path.join(test_dir, 'admin_scripts', 'custom_templates', 'project_template')
+        args = ['startproject', '--template', template_path, 'yet_another_project', 'project_dir2']
+        testproject_dir = os.path.join(test_dir, 'project_dir2')
+        out, err = self.run_django_admin(args)
+        self.assertNoOutput(out)
+        self.assertOutput(err, "Destination directory '%s' does not exist, please create it first." % testproject_dir)
+        self.assertFalse(os.path.exists(testproject_dir))
+