diff --git a/spec/project-spec.coffee b/spec/project-spec.coffee
index 0d115f56f..476d731ee 100644
--- a/spec/project-spec.coffee
+++ b/spec/project-spec.coffee
@@ -78,6 +78,20 @@ describe "Project", ->
       expect(directories.length).toBe 1
       expect(directories[0].getPath()).toBe tmp
 
+    it "gets the parent directory from the default directory provider if it's a local directory", ->
+      tmp = temp.mkdirSync()
+      atom.project.setPaths([path.join(tmp, "not-existing")])
+      directories = atom.project.getDirectories()
+      expect(directories.length).toBe 1
+      expect(directories[0].getPath()).toBe tmp
+
+    it "only normalizes the directory path if it isn't on the local filesystem", ->
+      nonLocalFsDirectory = "custom_proto://abc/def"
+      atom.project.setPaths([nonLocalFsDirectory])
+      directories = atom.project.getDirectories()
+      expect(directories.length).toBe 1
+      expect(directories[0].getPath()).toBe path.normalize(nonLocalFsDirectory)
+
     it "tries to update repositories when a new RepositoryProvider is registered", ->
       tmp = temp.mkdirSync('atom-project')
       atom.project.setPaths([tmp])
diff --git a/src/default-directory-provider.coffee b/src/default-directory-provider.coffee
index 7ecdbd354..a05c532a9 100644
--- a/src/default-directory-provider.coffee
+++ b/src/default-directory-provider.coffee
@@ -16,10 +16,10 @@ class DefaultDirectoryProvider
   directoryForURISync: (uri) ->
     projectPath = path.normalize(uri)
 
-    directoryPath = if fs.isDirectorySync(projectPath)
-      projectPath
-    else
+    directoryPath = if !fs.isDirectorySync(projectPath) and fs.isDirectorySync(path.dirname(projectPath))
       path.dirname(projectPath)
+    else
+      projectPath
 
     new Directory(directoryPath)