diff --git a/dlls/kernel/process.c b/dlls/kernel/process.c
index a41b74f6d06..f51eb54c465 100644
--- a/dlls/kernel/process.c
+++ b/dlls/kernel/process.c
@@ -617,7 +617,7 @@ static RTL_USER_PROCESS_PARAMETERS *init_user_process_params( size_t info_size )
     params->AllocationSize = size;
 
     /* make sure the strings are valid */
-    fix_unicode_string( &params->CurrentDirectoryName, (char *)info_size );
+    fix_unicode_string( &params->CurrentDirectory.DosPath, (char *)info_size );
     fix_unicode_string( &params->DllPath, (char *)info_size );
     fix_unicode_string( &params->ImagePathName, (char *)info_size );
     fix_unicode_string( &params->CommandLine, (char *)info_size );
@@ -685,13 +685,13 @@ static BOOL process_init( char *argv[], char **environ )
         wine_server_fd_to_handle( 2, GENERIC_WRITE|SYNCHRONIZE, TRUE, &params->hStdError );
 
         /* <hack: to be changed later on> */
-        params->CurrentDirectoryName.Length = 3 * sizeof(WCHAR);
-        params->CurrentDirectoryName.MaximumLength = RtlGetLongestNtPathLength() * sizeof(WCHAR);
-        params->CurrentDirectoryName.Buffer = RtlAllocateHeap( GetProcessHeap(), 0, params->CurrentDirectoryName.MaximumLength);
-        params->CurrentDirectoryName.Buffer[0] = 'C';
-        params->CurrentDirectoryName.Buffer[1] = ':';
-        params->CurrentDirectoryName.Buffer[2] = '\\';
-        params->CurrentDirectoryName.Buffer[3] = '\0';
+        params->CurrentDirectory.DosPath.Length = 3 * sizeof(WCHAR);
+        params->CurrentDirectory.DosPath.MaximumLength = RtlGetLongestNtPathLength() * sizeof(WCHAR);
+        params->CurrentDirectory.DosPath.Buffer = RtlAllocateHeap( GetProcessHeap(), 0, params->CurrentDirectory.DosPath.MaximumLength);
+        params->CurrentDirectory.DosPath.Buffer[0] = 'C';
+        params->CurrentDirectory.DosPath.Buffer[1] = ':';
+        params->CurrentDirectory.DosPath.Buffer[2] = '\\';
+        params->CurrentDirectory.DosPath.Buffer[3] = '\0';
         /* </hack: to be changed later on> */
     }
     else
diff --git a/dlls/kernel/task.c b/dlls/kernel/task.c
index 94844f67afb..b477e9595ae 100644
--- a/dlls/kernel/task.c
+++ b/dlls/kernel/task.c
@@ -442,12 +442,13 @@ static WIN16_SUBSYSTEM_TIB *allocate_win16_tib( TDB *pTask )
     else tib->exe_name = NULL;
 
     RtlAcquirePebLock();
-    curdir = &NtCurrentTeb()->Peb->ProcessParameters->CurrentDirectoryName;
-    tib->curdir.MaximumLength = sizeof(tib->curdir_buffer);
-    tib->curdir.Length = min( curdir->Length, tib->curdir.MaximumLength-sizeof(WCHAR) );
-    tib->curdir.Buffer = tib->curdir_buffer;
-    memcpy( tib->curdir_buffer, curdir->Buffer, tib->curdir.Length );
-    tib->curdir_buffer[tib->curdir.Length/sizeof(WCHAR)] = 0;
+    curdir = &NtCurrentTeb()->Peb->ProcessParameters->CurrentDirectory.DosPath;
+    tib->curdir.DosPath.MaximumLength = sizeof(tib->curdir_buffer);
+    tib->curdir.DosPath.Length = min( curdir->Length, tib->curdir.DosPath.MaximumLength-sizeof(WCHAR) );
+    tib->curdir.DosPath.Buffer = tib->curdir_buffer;
+    tib->curdir.Handle = 0;
+    memcpy( tib->curdir_buffer, curdir->Buffer, tib->curdir.DosPath.Length );
+    tib->curdir_buffer[tib->curdir.DosPath.Length/sizeof(WCHAR)] = 0;
     RtlReleasePebLock();
     return tib;
 }
diff --git a/dlls/ntdll/env.c b/dlls/ntdll/env.c
index fa80374a2be..a5d56aadf22 100644
--- a/dlls/ntdll/env.c
+++ b/dlls/ntdll/env.c
@@ -348,7 +348,7 @@ PRTL_USER_PROCESS_PARAMETERS WINAPI RtlNormalizeProcessParams( RTL_USER_PROCESS_
 {
     if (params && !(params->Flags & PROCESS_PARAMS_FLAG_NORMALIZED))
     {
-        normalize( params, &params->CurrentDirectoryName.Buffer );
+        normalize( params, &params->CurrentDirectory.DosPath.Buffer );
         normalize( params, &params->DllPath.Buffer );
         normalize( params, &params->ImagePathName.Buffer );
         normalize( params, &params->CommandLine.Buffer );
@@ -374,7 +374,7 @@ PRTL_USER_PROCESS_PARAMETERS WINAPI RtlDeNormalizeProcessParams( RTL_USER_PROCES
 {
     if (params && (params->Flags & PROCESS_PARAMS_FLAG_NORMALIZED))
     {
-        denormalize( params, &params->CurrentDirectoryName.Buffer );
+        denormalize( params, &params->CurrentDirectory.DosPath.Buffer );
         denormalize( params, &params->DllPath.Buffer );
         denormalize( params, &params->ImagePathName.Buffer );
         denormalize( params, &params->CommandLine.Buffer );
@@ -425,7 +425,7 @@ NTSTATUS WINAPI RtlCreateProcessParameters( RTL_USER_PROCESS_PARAMETERS **result
     RtlAcquirePebLock();
     cur_params = NtCurrentTeb()->Peb->ProcessParameters;
     if (!DllPath) DllPath = &cur_params->DllPath;
-    if (!CurrentDirectoryName) CurrentDirectoryName = &cur_params->CurrentDirectoryName;
+    if (!CurrentDirectoryName) CurrentDirectoryName = &cur_params->CurrentDirectory.DosPath;
     if (!CommandLine) CommandLine = ImagePathName;
     if (!Environment) Environment = cur_params->Environment;
     if (!WindowTitle) WindowTitle = &empty_str;
@@ -456,7 +456,7 @@ NTSTATUS WINAPI RtlCreateProcessParameters( RTL_USER_PROCESS_PARAMETERS **result
         /* all other fields are zero */
 
         ptr = params + 1;
-        append_unicode_string( &ptr, CurrentDirectoryName, &params->CurrentDirectoryName );
+        append_unicode_string( &ptr, CurrentDirectoryName, &params->CurrentDirectory.DosPath );
         append_unicode_string( &ptr, DllPath, &params->DllPath );
         append_unicode_string( &ptr, ImagePathName, &params->ImagePathName );
         append_unicode_string( &ptr, CommandLine, &params->CommandLine );
diff --git a/dlls/ntdll/path.c b/dlls/ntdll/path.c
index 85392842d2c..1db4cef1513 100644
--- a/dlls/ntdll/path.c
+++ b/dlls/ntdll/path.c
@@ -29,6 +29,7 @@
 #include "winbase.h"
 #include "winreg.h"
 #include "winternl.h"
+#include "winioctl.h"
 #include "wine/unicode.h"
 #include "wine/debug.h"
 #include "wine/library.h"
@@ -542,9 +543,9 @@ static ULONG get_full_path_helper(LPCWSTR name, LPWSTR buffer, ULONG size)
     RtlAcquirePebLock();
 
     if (NtCurrentTeb()->Tib.SubSystemTib)  /* FIXME: hack */
-        cd = &((WIN16_SUBSYSTEM_TIB *)NtCurrentTeb()->Tib.SubSystemTib)->curdir;
+        cd = &((WIN16_SUBSYSTEM_TIB *)NtCurrentTeb()->Tib.SubSystemTib)->curdir.DosPath;
     else
-        cd = &NtCurrentTeb()->Peb->ProcessParameters->CurrentDirectoryName;
+        cd = &NtCurrentTeb()->Peb->ProcessParameters->CurrentDirectory.DosPath;
 
     switch (type = RtlDetermineDosPathNameType_U(name))
     {
@@ -855,9 +856,9 @@ NTSTATUS WINAPI RtlGetCurrentDirectory_U(ULONG buflen, LPWSTR buf)
     RtlAcquirePebLock();
 
     if (NtCurrentTeb()->Tib.SubSystemTib)  /* FIXME: hack */
-        us = &((WIN16_SUBSYSTEM_TIB *)NtCurrentTeb()->Tib.SubSystemTib)->curdir;
+        us = &((WIN16_SUBSYSTEM_TIB *)NtCurrentTeb()->Tib.SubSystemTib)->curdir.DosPath;
     else
-        us = &NtCurrentTeb()->Peb->ProcessParameters->CurrentDirectoryName;
+        us = &NtCurrentTeb()->Peb->ProcessParameters->CurrentDirectory.DosPath;
 
     len = us->Length / sizeof(WCHAR);
     if (us->Buffer[len - 1] == '\\' && us->Buffer[len - 2] != ':')
@@ -884,66 +885,68 @@ NTSTATUS WINAPI RtlGetCurrentDirectory_U(ULONG buflen, LPWSTR buf)
  */
 NTSTATUS WINAPI RtlSetCurrentDirectory_U(const UNICODE_STRING* dir)
 {
-    UNICODE_STRING*     curdir;
-    NTSTATUS            nts = STATUS_SUCCESS;
-    ULONG               size;
-    PWSTR               buf = NULL;
+    FILE_FS_DEVICE_INFORMATION device_info;
+    OBJECT_ATTRIBUTES attr;
+    UNICODE_STRING newdir;
+    IO_STATUS_BLOCK io;
+    CURDIR *curdir;
+    HANDLE handle;
+    NTSTATUS nts;
+    ULONG size;
+    PWSTR ptr;
 
-    TRACE("(%s)\n", debugstr_w(dir->Buffer));
+    newdir.Buffer = NULL;
 
     RtlAcquirePebLock();
 
     if (NtCurrentTeb()->Tib.SubSystemTib)  /* FIXME: hack */
         curdir = &((WIN16_SUBSYSTEM_TIB *)NtCurrentTeb()->Tib.SubSystemTib)->curdir;
     else
-        curdir = &NtCurrentTeb()->Peb->ProcessParameters->CurrentDirectoryName;
+        curdir = &NtCurrentTeb()->Peb->ProcessParameters->CurrentDirectory;
 
-    size = curdir->MaximumLength;
-
-    buf = RtlAllocateHeap(GetProcessHeap(), 0, size);
-    if (buf == NULL)
-    {
-        nts = STATUS_NO_MEMORY;
-        goto out;
-    }
-
-    size = RtlGetFullPathName_U(dir->Buffer, size, buf, 0);
-    if (!size)
+    if (!RtlDosPathNameToNtPathName_U( dir->Buffer, &newdir, NULL, NULL ))
     {
         nts = STATUS_OBJECT_NAME_INVALID;
         goto out;
     }
 
-    switch (RtlDetermineDosPathNameType_U(buf))
+    attr.Length = sizeof(attr);
+    attr.RootDirectory = 0;
+    attr.Attributes = OBJ_CASE_INSENSITIVE;
+    attr.ObjectName = &newdir;
+    attr.SecurityDescriptor = NULL;
+    attr.SecurityQualityOfService = NULL;
+
+    nts = NtOpenFile( &handle, 0, &attr, &io, 0, FILE_DIRECTORY_FILE );
+    if (nts != STATUS_SUCCESS) goto out;
+
+    /* don't keep the directory handle open on removable media */
+    if (!NtQueryVolumeInformationFile( handle, &io, &device_info,
+                                       sizeof(device_info), FileFsDeviceInformation ) &&
+        (device_info.Characteristics & FILE_REMOVABLE_MEDIA))
     {
-    case ABSOLUTE_DRIVE_PATH:
-    case UNC_PATH:
-        break;
-    default:
-        FIXME("Don't support those cases yes\n");
-        nts = STATUS_NOT_IMPLEMENTED;
-        goto out;
+        NtClose( handle );
+        handle = 0;
     }
 
-    /* FIXME: should check that the directory actually exists,
-     * and fill CurrentDirectoryHandle accordingly 
-     */
+    if (curdir->Handle) NtClose( curdir->Handle );
+    curdir->Handle = handle;
 
     /* append trailing \ if missing */
-    if (buf[size / sizeof(WCHAR) - 1] != '\\')
-    {
-        buf[size / sizeof(WCHAR)] = '\\';
-        buf[size / sizeof(WCHAR) + 1] = '\0';
-        size += sizeof(WCHAR);
-    }
+    size = newdir.Length / sizeof(WCHAR);
+    ptr = newdir.Buffer;
+    ptr += 4;  /* skip \??\ prefix */
+    size -= 4;
+    if (size && ptr[size - 1] != '\\') ptr[size++] = '\\';
 
-    memmove(curdir->Buffer, buf, size + sizeof(WCHAR));
-    curdir->Length = size;
+    memcpy( curdir->DosPath.Buffer, ptr, size * sizeof(WCHAR));
+    curdir->DosPath.Buffer[size] = 0;
+    curdir->DosPath.Length = size * sizeof(WCHAR);
+
+    TRACE( "curdir now %s %p\n", debugstr_w(curdir->DosPath.Buffer), curdir->Handle );
 
  out:
-    if (buf) RtlFreeHeap(GetProcessHeap(), 0, buf);
-
+    RtlFreeUnicodeString( &newdir );
     RtlReleasePebLock();
-
     return nts;
 }
diff --git a/include/thread.h b/include/thread.h
index 9c2ae9fa3ee..335e364a12f 100644
--- a/include/thread.h
+++ b/include/thread.h
@@ -143,7 +143,7 @@ typedef struct
 
     /* the following fields do not exist under Windows */
     UNICODE_STRING  exe_str;    /* exe name string pointed to by exe_name */
-    UNICODE_STRING  curdir;     /* current directory */
+    CURDIR          curdir;     /* current directory */
     WCHAR           curdir_buffer[MAX_PATH];
 } WIN16_SUBSYSTEM_TIB;
 
diff --git a/include/winternl.h b/include/winternl.h
index e526678338b..19e497dfd20 100644
--- a/include/winternl.h
+++ b/include/winternl.h
@@ -106,8 +106,7 @@ typedef struct _RTL_USER_PROCESS_PARAMETERS
     HANDLE              hStdInput;
     HANDLE              hStdOutput;
     HANDLE              hStdError;
-    UNICODE_STRING      CurrentDirectoryName;
-    HANDLE              CurrentDirectoryHandle;
+    CURDIR              CurrentDirectory;
     UNICODE_STRING      DllPath;
     UNICODE_STRING      ImagePathName;
     UNICODE_STRING      CommandLine;
diff --git a/server/trace.c b/server/trace.c
index 3d9d7b905ce..4d6c4230784 100644
--- a/server/trace.c
+++ b/server/trace.c
@@ -329,7 +329,7 @@ static void dump_varargs_startup_info( size_t size )
     fprintf( stderr, "hStdInput=%p,", params.hStdInput );
     fprintf( stderr, "hStdOutput=%p,", params.hStdOutput );
     fprintf( stderr, "hStdError=%p,", params.hStdError );
-    fprintf( stderr, "CurrentDirectoryHandle=%p,", params.CurrentDirectoryHandle );
+    fprintf( stderr, "CurrentDirectory.Handle=%p,", params.CurrentDirectory.Handle );
     fprintf( stderr, "dwX=%ld,", params.dwX );
     fprintf( stderr, "dwY=%ld,", params.dwY );
     fprintf( stderr, "dwXSize=%ld,", params.dwXSize );
@@ -339,8 +339,8 @@ static void dump_varargs_startup_info( size_t size )
     fprintf( stderr, "dwFillAttribute=%lx,", params.dwFillAttribute );
     fprintf( stderr, "dwFlags=%lx,", params.dwFlags );
     fprintf( stderr, "wShowWindow=%lx,", params.wShowWindow );
-    fprintf( stderr, "CurrentDirectoryName=L\"" );
-    dump_inline_unicode_string( &params.CurrentDirectoryName, cur_data, size );
+    fprintf( stderr, "CurrentDirectory.DosPath=L\"" );
+    dump_inline_unicode_string( &params.CurrentDirectory.DosPath, cur_data, size );
     fprintf( stderr, "\",DllPath=L\"" );
     dump_inline_unicode_string( &params.DllPath, cur_data, size );
     fprintf( stderr, "\",ImagePathName=L\"" );