diff --git a/src/vs/platform/workspaces/electron-main/workspacesMainService.ts b/src/vs/platform/workspaces/electron-main/workspacesMainService.ts
index f6c6ab6035ab8d9c40453b598ce34e6e128791f6..2428e572c5e3a008e4871e97df0f0ea94c47843c 100644
--- a/src/vs/platform/workspaces/electron-main/workspacesMainService.ts
+++ b/src/vs/platform/workspaces/electron-main/workspacesMainService.ts
@@ -5,7 +5,7 @@
 
 'use strict';
 
-import { IWorkspacesMainService, IWorkspaceIdentifier, IStoredWorkspace, WORKSPACE_EXTENSION, IWorkspaceSavedEvent, UNTITLED_WORKSPACE_NAME, IResolvedWorkspace, IStoredWorkspaceFolder } from 'vs/platform/workspaces/common/workspaces';
+import { IWorkspacesMainService, IWorkspaceIdentifier, IStoredWorkspace, WORKSPACE_EXTENSION, IWorkspaceSavedEvent, UNTITLED_WORKSPACE_NAME, IResolvedWorkspace } from 'vs/platform/workspaces/common/workspaces';
 import { TPromise } from 'vs/base/common/winjs.base';
 import { isParent } from 'vs/platform/files/common/files';
 import { IEnvironmentService } from 'vs/platform/environment/common/environment';
@@ -85,21 +85,17 @@ export class WorkspacesMainService implements IWorkspacesMainService {
 				writeFileSync(path, JSON.stringify(workspace, null, '\t'));
 			}
 
-			let absoluteFolders: IStoredWorkspaceFolder[] = [];
+			// relative paths get resolved against the workspace location
 			workspace.folders.forEach(folder => {
-				if (isAbsolute(folder.path)) {
-					absoluteFolders.push(folder);
-				} else {
-					absoluteFolders.push({
-						path: resolve(dirname(path), folder.path) // relative paths get resolved against the workspace location
-					});
+				if (folder.path && !isAbsolute(folder.path)) {
+					folder.path = resolve(dirname(path), folder.path);
 				}
 			});
 
 			return {
 				id: this.getWorkspaceId(path),
 				configPath: path,
-				folders: absoluteFolders
+				folders: workspace.folders
 			};
 		} catch (error) {
 			this.logService.log(error.toString());
@@ -205,12 +201,14 @@ export class WorkspacesMainService implements IWorkspacesMainService {
 			// is a parent of the location of the workspace file itself. Otherwise keep
 			// using absolute paths.
 			storedWorkspace.folders.forEach(folder => {
-				if (!isAbsolute(folder.path)) {
-					folder.path = resolve(sourceConfigFolder, folder.path); // relative paths get resolved against the workspace location
-				}
-
-				if (isEqualOrParent(folder.path, targetConfigFolder, !isLinux)) {
-					folder.path = relative(targetConfigFolder, folder.path); // absolute paths get converted to relative ones to workspace location if possible
+				if (folder.path) {
+					if (!isAbsolute(folder.path)) {
+						folder.path = resolve(sourceConfigFolder, folder.path); // relative paths get resolved against the workspace location
+					}
+
+					if (isEqualOrParent(folder.path, targetConfigFolder, !isLinux)) {
+						folder.path = relative(targetConfigFolder, folder.path); // absolute paths get converted to relative ones to workspace location if possible
+					}
 				}
 			});
 
diff --git a/src/vs/workbench/services/configuration/common/configurationModels.ts b/src/vs/workbench/services/configuration/common/configurationModels.ts
index a29928f2402b628cbe54c55a6da29eb20eb984bd..dd7f73103ed60c1d88478106156434af30ba1ebe 100644
--- a/src/vs/workbench/services/configuration/common/configurationModels.ts
+++ b/src/vs/workbench/services/configuration/common/configurationModels.ts
@@ -15,7 +15,7 @@ import { IStoredWorkspaceFolder } from 'vs/platform/workspaces/common/workspaces
 export class WorkspaceConfigurationModel<T> extends CustomConfigurationModel<T> {
 
 	private _raw: T;
-	private _folders: string[];
+	private _folders: IStoredWorkspaceFolder[];
 	private _worksapaceSettings: ConfigurationModel<T>;
 	private _tasksConfiguration: ConfigurationModel<T>;
 	private _launchConfiguration: ConfigurationModel<T>;
@@ -27,7 +27,7 @@ export class WorkspaceConfigurationModel<T> extends CustomConfigurationModel<T>
 		this._workspaceConfiguration = this.consolidate();
 	}
 
-	get folders(): string[] {
+	get folders(): IStoredWorkspaceFolder[] {
 		return this._folders;
 	}
 
@@ -38,7 +38,7 @@ export class WorkspaceConfigurationModel<T> extends CustomConfigurationModel<T>
 	protected processRaw(raw: T): void {
 		this._raw = raw;
 
-		this._folders = ((this._raw['folders'] || []) as IStoredWorkspaceFolder[]).map(folder => folder.path);
+		this._folders = (this._raw['folders'] || []) as IStoredWorkspaceFolder[];
 		this._worksapaceSettings = this.parseConfigurationModel('settings');
 		this._tasksConfiguration = this.parseConfigurationModel('tasks');
 		this._launchConfiguration = this.parseConfigurationModel('launch');
diff --git a/src/vs/workbench/services/configuration/node/configuration.ts b/src/vs/workbench/services/configuration/node/configuration.ts
index 7f445cf4f768c09b14e046cda241c5367f01336f..0f45a64cd69a5bc3689dbbbae9fc7ff6efa54143 100644
--- a/src/vs/workbench/services/configuration/node/configuration.ts
+++ b/src/vs/workbench/services/configuration/node/configuration.ts
@@ -9,7 +9,7 @@ import * as paths from 'vs/base/common/paths';
 import { TPromise } from 'vs/base/common/winjs.base';
 import Event, { Emitter } from 'vs/base/common/event';
 import { StrictResourceMap } from 'vs/base/common/map';
-import { equals } from 'vs/base/common/arrays';
+import { equals, coalesce } from 'vs/base/common/arrays';
 import * as objects from 'vs/base/common/objects';
 import * as errors from 'vs/base/common/errors';
 import * as collections from 'vs/base/common/collections';
@@ -33,7 +33,7 @@ import { Registry } from 'vs/platform/registry/common/platform';
 import { ExtensionsRegistry, ExtensionMessageCollector } from 'vs/platform/extensions/common/extensionsRegistry';
 import { IConfigurationNode, IConfigurationRegistry, Extensions, editorConfigurationSchemaId, IDefaultConfigurationExtension, validateProperty, ConfigurationScope, schemaId } from 'vs/platform/configuration/common/configurationRegistry';
 import { createHash } from 'crypto';
-import { getWorkspaceLabel, IWorkspacesService, IWorkspaceIdentifier, ISingleFolderWorkspaceIdentifier, isSingleFolderWorkspaceIdentifier } from 'vs/platform/workspaces/common/workspaces';
+import { getWorkspaceLabel, IWorkspacesService, IWorkspaceIdentifier, ISingleFolderWorkspaceIdentifier, isSingleFolderWorkspaceIdentifier, IStoredWorkspaceFolder } from 'vs/platform/workspaces/common/workspaces';
 
 interface IStat {
 	resource: URI;
@@ -436,26 +436,32 @@ export class WorkspaceServiceImpl extends WorkspaceService {
 		return this.workspaceConfiguration.load(this.workspaceConfigPath)
 			.then(() => {
 				const workspaceConfigurationModel = this.workspaceConfiguration.workspaceConfigurationModel;
-				if (!workspaceConfigurationModel.folders.length) {
+				const workspaceFolders = this.parseWorkspaceFolders(workspaceConfigurationModel.folders);
+				if (!workspaceFolders.length) {
 					return TPromise.wrapError<void>(new Error('Invalid workspace configuraton file ' + this.workspaceConfigPath));
 				}
 				const workspaceId = (this.workspaceIdentifier as IWorkspaceIdentifier).id;
 				const workspaceName = getWorkspaceLabel({ id: workspaceId, configPath: this.workspaceConfigPath.fsPath }, this.environmentService);
-				this.workspace = new Workspace(workspaceId, workspaceName, this.parseWorkspaceFolders(workspaceConfigurationModel.folders), this.workspaceConfigPath);
+				this.workspace = new Workspace(workspaceId, workspaceName, workspaceFolders, this.workspaceConfigPath);
 				this.legacyWorkspace = new LegacyWorkspace(this.workspace.roots[0]);
 				this._register(this.workspaceConfiguration.onDidUpdateConfiguration(() => this.onWorkspaceConfigurationChanged()));
 				return null;
 			});
 	}
 
-	private parseWorkspaceFolders(configuredFolders: string[]): URI[] {
-		return configuredFolders.map(configuredFolder => {
-			if (paths.isAbsolute(configuredFolder)) {
-				return URI.file(configuredFolder);
+	private parseWorkspaceFolders(configuredFolders: IStoredWorkspaceFolder[]): URI[] {
+		return coalesce(configuredFolders.map(configuredFolder => {
+			const path = configuredFolder.path;
+			if (!path) {
+				return void 0;
 			}
 
-			return URI.file(paths.join(paths.dirname(this.workspaceConfigPath.fsPath), configuredFolder));
-		});
+			if (paths.isAbsolute(path)) {
+				return URI.file(path);
+			}
+
+			return URI.file(paths.join(paths.dirname(this.workspaceConfigPath.fsPath), path));
+		}));
 	}
 
 	private registerWorkspaceConfigSchema(): void {