diff --git a/spec/atom-portable-spec.coffee b/spec/atom-portable-spec.coffee
new file mode 100644
index 000000000..f5b24a4a1
--- /dev/null
+++ b/spec/atom-portable-spec.coffee
@@ -0,0 +1,52 @@
+path = require "path"
+fs = require 'fs-plus'
+temp = require "temp"
+rimraf = require "rimraf"
+AtomPortable = require "../src/browser/atom-portable"
+
+fdescribe "Portable Mode", ->
+  describe "Windows", ->
+    platform = "win32"
+
+    describe "with ATOM_HOME environment variable", ->
+      environmentAtomHome = "C:\\some\\path"
+      it "returns false", ->
+        expect(AtomPortable.isPortableInstall(platform, environmentAtomHome)).toBe false
+
+    describe "without ATOM_HOME environment variable", ->
+      environmentAtomHome = undefined
+      portableAtomHomePath = path.join(path.dirname(process.execPath), "../.atom").toString()
+      portableAtomHomeNaturallyExists = fs.existsSync(portableAtomHomePath)
+      portableAtomHomeBackupPath = portableAtomHomePath + ".temp"
+
+      beforeEach ->
+        fs.renameSync(portableAtomHomePath, portableAtomHomeBackupPath) if fs.existsSync(portableAtomHomePath)
+
+      afterEach ->
+        if portableAtomHomeNaturallyExists
+          fs.renameSync(portableAtomHomeBackupPath, portableAtomHomePath) if not fs.existsSync(portableAtomHomePath)
+        else
+          rimraf.sync(portableAtomHomePath) if fs.existsSync(portableAtomHomePath)
+        rimraf.sync(portableAtomHomeBackupPath) if fs.existsSync(portableAtomHomeBackupPath)
+
+      describe "with .atom directory sibling to exec", ->
+        beforeEach ->
+          fs.mkdirSync(portableAtomHomePath) if not fs.existsSync(portableAtomHomePath)
+        it "returns true", ->
+          expect(AtomPortable.isPortableInstall(platform, environmentAtomHome)).toBe true
+
+      describe "without .atom directory sibling to exec", ->
+        beforeEach ->
+          rimraf.sync(portableAtomHomePath) if fs.existsSync(portableAtomHomePath)
+        it "returns false", ->
+          expect(AtomPortable.isPortableInstall(platform, environmentAtomHome)).toBe false
+
+  describe "Mac", ->
+    platform = "darwin"
+    it "returns false", ->
+      expect(AtomPortable.isPortableInstall(platform, platform)).toBe false
+
+  describe "Linux", ->
+    platform = "linux"
+    it "returns false", ->
+      expect(AtomPortable.isPortableInstall(platform, platform)).toBe false
diff --git a/src/browser/atom-portable.coffee b/src/browser/atom-portable.coffee
new file mode 100644
index 000000000..2a8e4d7a0
--- /dev/null
+++ b/src/browser/atom-portable.coffee
@@ -0,0 +1,15 @@
+fs = require 'fs-plus'
+path = require 'path'
+
+module.exports =
+class AtomPortable
+  @portableAtomHomePath: ->
+    execDirectoryPath = path.dirname(process.execPath)
+    return path.join(execDirectoryPath, "../.atom")
+  @isPortableInstall: (platform, environmentAtomHome) ->
+    return false unless platform is 'win32'
+    return false if environmentAtomHome
+
+    # currently checking only that the directory exists, probably want to do
+    # some integrity checks on contents and make sure it's writable in future
+    return fs.existsSync(@portableAtomHomePath())
diff --git a/src/browser/main.coffee b/src/browser/main.coffee
index cfac6f34c..1db0b87e7 100644
--- a/src/browser/main.coffee
+++ b/src/browser/main.coffee
@@ -57,23 +57,13 @@ handleStartupEventWithSquirrel = ->
 setupCrashReporter = ->
   crashReporter.start(productName: 'Atom', companyName: 'GitHub')
 
-isPortableInstall = (args) ->
-  return false unless process.platform is 'win32'
-  return false unless (process and process.type)
-  return false if args.devMode or args.testMode
-
-  ourPath = process.execPath.toLowerCase()
-  return (ourPath.indexOf(process.env.LOCALAPPDATA.toLowerCase()) is 0)
-
 setupAtomHome = (args) ->
   return if process.env.ATOM_HOME
-
   atomHome = path.join(app.getHomeDir(), '.atom')
-  try
-    atomHome = fs.realpathSync(atomHome)
-    fs.statSync(atomHome)
-  catch
-    atomHome = path.join(path.dirname(process.execPath), '.atom') if isPortableInstall(args)
+  AtomPortable = require './atom-portable'
+  atomHome = AtomPortable.portableAtomHomePath() if AtomPortable.isPortableInstall process.platform, process.env.ATOM_HOME
+  atomHome = fs.realpathSync(atomHome)
+  fs.statSync(atomHome)
 
   process.env.ATOM_HOME = atomHome