diff --git a/railties/lib/rails/generators/rails/app/app_generator.rb b/railties/lib/rails/generators/rails/app/app_generator.rb
index 96c49a81bb2208ba6fbed6a72418f5afbb7080d0..dd18588b3953f8e57d01d190b9affcbc6ffb5656 100644
--- a/railties/lib/rails/generators/rails/app/app_generator.rb
+++ b/railties/lib/rails/generators/rails/app/app_generator.rb
@@ -356,8 +356,12 @@ def app_name
         @app_name ||= File.basename(destination_root)
       end
 
+      def defined_app_const_base
+        Rails.application.class.name.sub(/::Application$/, "") if Rails.application.instance_of?(Rails::Application)
+      end
+
       def app_const_base
-        @app_const_base ||= app_name.gsub(/\W/, '_').squeeze('_').camelize
+        @app_const_base ||= defined_app_const_base || app_name.gsub(/\W/, '_').squeeze('_').camelize
       end
 
       def app_const
diff --git a/railties/test/generators/app_generator_test.rb b/railties/test/generators/app_generator_test.rb
index 1e0b3bf4c766fb870ba1ca93f22b6a9ff5000153..21725a380c6811cef24b0c3f8d49833d13849d86 100644
--- a/railties/test/generators/app_generator_test.rb
+++ b/railties/test/generators/app_generator_test.rb
@@ -106,6 +106,30 @@ def test_invalid_application_name_is_fixed
     assert_file "things-43/config/application.rb", /^module Things43$/
   end
 
+  def test_application_name_is_detected_if_it_exists_and_app_folder_renamed
+    app_root       = File.join(destination_root, "myapp")
+    app_moved_root = File.join(destination_root, "myapp_moved")
+
+    run_generator [app_root]
+
+    Rails.application.config.root = app_moved_root
+    Rails.application.class.stubs(:name).returns("Myapp")
+    Rails.application.stubs(:instance_of?).returns(Rails::Application)
+
+    FileUtils.mv(app_root, app_moved_root)
+
+    # forces the shell to automatically overwrite all files
+    Thor::Base.shell.send(:attr_accessor, :always_force)
+    shell = Thor::Base.shell.new
+    shell.send(:always_force=, true)
+
+    generator = Rails::Generators::AppGenerator.new ["rails"], { :with_dispatchers => true },
+                                                               :destination_root => app_moved_root, :shell => shell
+    generator.send(:app_const)
+    silence(:stdout){ generator.send(:create_config_files) }
+    assert_file "myapp_moved/config/environment.rb", /Myapp::Application\.initialize!/
+  end
+
   def test_application_names_are_not_singularized
     run_generator [File.join(destination_root, "hats")]
     assert_file "hats/config/environment.rb", /Hats::Application\.initialize!/