diff --git a/AUTHORS b/AUTHORS
index 7a839faf88..f535ddda0f 100644
--- a/AUTHORS
+++ b/AUTHORS
@@ -257,6 +257,7 @@ answer newbie questions, and generally made Django that much better:
     Robin Munn <http://www.geekforgod.com/>
     Robert Myers <myer0052@gmail.com>
     Nebojša Dorđević
+    Doug Napoleone <doug@dougma.com>
     Gopal Narayanan <gopastro@gmail.com>
     Fraser Nevett <mail@nevett.org>
     Sam Newman <http://www.magpiebrain.com/>
diff --git a/django/core/management/__init__.py b/django/core/management/__init__.py
index d78e2eda0b..819b19a366 100644
--- a/django/core/management/__init__.py
+++ b/django/core/management/__init__.py
@@ -243,7 +243,7 @@ def setup_environ(settings_mod):
     # way. For example, if this file (manage.py) lives in a directory
     # "myproject", this code would add "/path/to/myproject" to sys.path.
     project_directory, settings_filename = os.path.split(settings_mod.__file__)
-    if not project_directory:
+    if project_directory == os.curdir or not project_directory:
         project_directory = os.getcwd()
     project_name = os.path.basename(project_directory)
     settings_name = os.path.splitext(settings_filename)[0]