diff --git a/src/atom.coffee b/src/atom.coffee
index d497d1701..4c2da7f8a 100644
--- a/src/atom.coffee
+++ b/src/atom.coffee
@@ -308,6 +308,9 @@ class Atom extends Model
     @themes.loadBaseStylesheets()
     @packages.loadPackages()
     @deserializeEditorWindow()
+
+    @watchProjectPath()
+
     @packages.activate()
     @keymaps.loadUserKeymap()
     @requireUserInitScript()
@@ -347,13 +350,29 @@ class Atom extends Model
         pack.reloadStylesheets?()
       null
 
+  # Notify the browser project of the window's current project path
+  watchProjectPath: ->
+    onProjectPathChanged = =>
+      ipc.send('window-command', 'project-path-changed', @project.getPath())
+    @subscribe @project, 'path-changed', onProjectPathChanged
+    onProjectPathChanged()
+
   # Public: Open a new Atom window using the given options.
   #
   # Calling this method without an options parameter will open a prompt to pick
   # a file/folder to open in the new window.
   #
   # options - An {Object} with the following keys:
-  #   :pathsToOpen -  An {Array} of {String} paths to open.
+  #   :pathsToOpen - An {Array} of {String} paths to open.
+  #   :newWindow   - A {Boolean}, true to always open a new window instead of
+  #                  reusing existing windows depending on the paths to open.
+  #   :devMode     - A {Boolean}, true to open the window in development mode.
+  #                  Development mode loads the Atom source from the locally
+  #                  cloned repository and also loads all the packages in
+  #                  ~/.atom/dev/packages
+  #   :safeMode    - A {Boolean}, true to open the window in safe mode. Safe
+  #                  mode prevents all packages installed to ~/.atom/packages
+  #                  from loading.
   open: (options) ->
     ipc.send('open', options)
 
diff --git a/src/browser/atom-application.coffee b/src/browser/atom-application.coffee
index cc81beef9..69ac398ab 100644
--- a/src/browser/atom-application.coffee
+++ b/src/browser/atom-application.coffee
@@ -103,6 +103,12 @@ class AtomApplication
     window.once 'window:loaded', =>
       @autoUpdateManager.emitUpdateAvailableEvent(window)
 
+    focusHandler = => @lastFocusedWindow = window
+    window.browserWindow.on 'focus', focusHandler
+    window.browserWindow.once 'closed', =>
+      @lastFocusedWindow = null if window is @lastFocusedWindow
+      window.browserWindow.removeListener 'focus', focusHandler
+
   # Creates server to listen for additional atom application launches.
   #
   # You can run the atom command multiple times, but after the first launch
@@ -199,13 +205,15 @@ class AtomApplication
 
     # A request from the associated render process to open a new render process.
     ipc.on 'open', (event, options) =>
+      window = @windowForEvent(event)
       if options?
         if options.pathsToOpen?.length > 0
+          options.window = window
           @openPaths(options)
         else
           new AtomWindow(options)
       else
-        @promptForPath()
+        @promptForPath({window})
 
     ipc.on 'update-application-menu', (event, template, keystrokesByCommand) =>
       @applicationMenu.update(template, keystrokesByCommand)
@@ -281,8 +289,12 @@ class AtomApplication
 
   # Returns the {AtomWindow} for the given path.
   windowForPath: (pathToOpen) ->
-    for atomWindow in @windows
-      return atomWindow if atomWindow.containsPath(pathToOpen)
+    _.find @windows, (atomWindow) -> atomWindow.containsPath(pathToOpen)
+
+  # Returns the {AtomWindow} for the given ipc event.
+  windowForEvent: ({sender}) ->
+    window = BrowserWindow.fromWebContents(sender)
+    _.find @windows, ({browserWindow}) -> window is browserWindow
 
   # Public: Returns the currently focused {AtomWindow} or undefined if none.
   focusedWindow: ->
@@ -296,9 +308,10 @@ class AtomApplication
   #   :newWindow - Boolean of whether this should be opened in a new window.
   #   :devMode - Boolean to control the opened window's dev mode.
   #   :safeMode - Boolean to control the opened window's safe mode.
-  openPaths: ({pathsToOpen, pidToKillWhenClosed, newWindow, devMode, safeMode}) ->
+  #   :window - {AtomWindow} to open file paths in.
+  openPaths: ({pathsToOpen, pidToKillWhenClosed, newWindow, devMode, safeMode, window}) ->
     for pathToOpen in pathsToOpen ? []
-      @openPath({pathToOpen, pidToKillWhenClosed, newWindow, devMode, safeMode})
+      @openPath({pathToOpen, pidToKillWhenClosed, newWindow, devMode, safeMode, window})
 
   # Public: Opens a single path, in an existing window if possible.
   #
@@ -309,12 +322,27 @@ class AtomApplication
   #   :devMode - Boolean to control the opened window's dev mode.
   #   :safeMode - Boolean to control the opened window's safe mode.
   #   :windowDimensions - Object with height and width keys.
-  openPath: ({pathToOpen, pidToKillWhenClosed, newWindow, devMode, safeMode, windowDimensions}={}) ->
+  #   :window - {AtomWindow} to open file paths in.
+  openPath: ({pathToOpen, pidToKillWhenClosed, newWindow, devMode, safeMode, windowDimensions, window}={}) ->
     {pathToOpen, initialLine, initialColumn} = @locationForPathToOpen(pathToOpen)
 
-    unless devMode
-      existingWindow = @windowForPath(pathToOpen) unless pidToKillWhenClosed or newWindow
-    if existingWindow
+    unless pidToKillWhenClosed or newWindow
+      pathToOpenStat = fs.statSyncNoException(pathToOpen)
+
+      # Default to using the specified window or the last focused window
+      currentWindow = window ? @lastFocusedWindow
+
+      if pathToOpenStat.isFile?()
+        # Open the file in the current window
+        existingWindow = currentWindow
+      else if pathToOpenStat.isDirectory?()
+        # Open the folder in the current window if it doesn't have a path
+        existingWindow = currentWindow unless currentWindow?.hasProjectPath()
+
+      # Don't reuse windows in dev mode
+      existingWindow ?= @windowForPath(pathToOpen) unless devMode
+
+    if existingWindow?
       openedWindow = existingWindow
       openedWindow.openPath(pathToOpen, initialLine)
       openedWindow.restore()
@@ -331,7 +359,7 @@ class AtomApplication
     if pidToKillWhenClosed?
       @pidsToOpenWindows[pidToKillWhenClosed] = openedWindow
 
-    openedWindow.browserWindow.on 'closed', =>
+    openedWindow.browserWindow.once 'closed', =>
       @killProcessForWindow(openedWindow)
 
   # Kill all processes associated with opened windows.
@@ -444,7 +472,8 @@ class AtomApplication
   #              should be in dev mode or not.
   #   :safeMode - A Boolean which controls whether any newly opened windows
   #               should be in safe mode or not.
-  promptForPath: ({type, devMode, safeMode}={}) ->
+  #   :window - An {AtomWindow} to use for opening a selected file path.
+  promptForPath: ({type, devMode, safeMode, window}={}) ->
     type ?= 'all'
     properties =
       switch type
@@ -453,4 +482,4 @@ class AtomApplication
         when 'all' then ['openFile', 'openDirectory']
         else throw new Error("#{type} is an invalid type for promptForPath")
     dialog.showOpenDialog title: 'Open', properties: properties.concat(['multiSelections', 'createDirectory']), (pathsToOpen) =>
-      @openPaths({pathsToOpen, devMode, safeMode})
+      @openPaths({pathsToOpen, devMode, safeMode, window})
diff --git a/src/browser/atom-window.coffee b/src/browser/atom-window.coffee
index ad2b2ce53..4958dd782 100644
--- a/src/browser/atom-window.coffee
+++ b/src/browser/atom-window.coffee
@@ -25,9 +25,9 @@ class AtomWindow
     # Normalize to make sure drive letter case is consistent on Windows
     @resourcePath = path.normalize(@resourcePath) if @resourcePath
 
+    @browserWindow = new BrowserWindow show: false, title: 'Atom', icon: @constructor.iconPath
     global.atomApplication.addWindow(this)
 
-    @browserWindow = new BrowserWindow show: false, title: 'Atom', icon: @constructor.iconPath
     @handleEvents()
 
     loadSettings = _.extend({}, settings)
@@ -49,6 +49,8 @@ class AtomWindow
       @emit 'window:loaded'
       @loaded = true
 
+    @browserWindow.on 'project-path-changed', (@projectPath) =>
+
     @browserWindow.loadUrl @getUrl(loadSettings)
     @browserWindow.focusOnWebView() if @isSpec
 
@@ -66,6 +68,8 @@ class AtomWindow
       slashes: true
       query: {loadSettings: JSON.stringify(loadSettings)}
 
+  hasProjectPath: -> @projectPath?.length > 0
+
   getInitialPath: ->
     @browserWindow.loadSettings.initialPath
 
diff --git a/src/browser/main.coffee b/src/browser/main.coffee
index 7d6d372e3..8955ab0a7 100644
--- a/src/browser/main.coffee
+++ b/src/browser/main.coffee
@@ -63,7 +63,14 @@ parseCommandLine = ->
   options.usage """
     Atom Editor v#{version}
 
-    Usage: atom [options] [file ...]
+    Usage: atom [options] [path ...]
+
+    One or more paths to files or folders to open may be specified.
+
+    File paths will open in the current window.
+
+    Folder paths will open in an existing window if that folder has already been
+    opened or a new window if it hasn't.
   """
   options.alias('d', 'dev').boolean('d').describe('d', 'Run in development mode.')
   options.alias('f', 'foreground').boolean('f').describe('f', 'Keep the browser process in the foreground.')
diff --git a/src/window-event-handler.coffee b/src/window-event-handler.coffee
index bdf50bd4b..5f2b09b62 100644
--- a/src/window-event-handler.coffee
+++ b/src/window-event-handler.coffee
@@ -28,7 +28,9 @@ class WindowEventHandler
     @subscribe $(window), 'blur', -> document.body.classList.add('is-blurred')
 
     @subscribe $(window), 'window:open-path', (event, {pathToOpen, initialLine, initialColumn}) ->
-      unless fs.isDirectorySync(pathToOpen)
+      if fs.isDirectorySync(pathToOpen)
+        atom.project.setPath(pathToOpen) unless atom.project.getPath()
+      else
         atom.workspace?.open(pathToOpen, {initialLine, initialColumn})
 
     @subscribe $(window), 'beforeunload', =>