diff --git a/railties/CHANGELOG b/railties/CHANGELOG
index abfb16cf036073728aadbf7ef01bac179e2c4252..9293fc4e71d13defe798942c3149487a54ef3fd7 100644
--- a/railties/CHANGELOG
+++ b/railties/CHANGELOG
@@ -1,5 +1,7 @@
 *SVN*
 
+* Moved generator folder from RAILS_ROOT/generators to RAILS_ROOT/lib/generators [Tobias Luetke]
+
 * Fix rake dev and related commands [Nicholas Seckar]
 
 * The rails command tries to deduce your MySQL socket by running `mysql_config
diff --git a/railties/lib/rails_generator/lookup.rb b/railties/lib/rails_generator/lookup.rb
index 47cf870bd658a69a9893fe1f99d756cb5e4ce5c5..6b40f94638532a0067cf373a6191231868640853 100644
--- a/railties/lib/rails_generator/lookup.rb
+++ b/railties/lib/rails_generator/lookup.rb
@@ -98,7 +98,7 @@ def use_application_sources!
         # 4.  Builtins.  Model, controller, mailer, scaffold.
         def use_component_sources!
           reset_sources
-          sources << PathSource.new(:app, "#{::RAILS_ROOT}/generators") if defined? ::RAILS_ROOT
+          sources << PathSource.new(:app, "#{::RAILS_ROOT}/lib/generators") if defined? ::RAILS_ROOT
           sources << PathSource.new(:user, "#{Dir.user_home}/.rails/generators")
           sources << GemSource.new if Object.const_defined?(:Gem)
           sources << PathSource.new(:builtin, "#{File.dirname(__FILE__)}/generators/components")