diff --git a/apps/menus/playlist_menu.c b/apps/menus/playlist_menu.c
index 26f3b34b4f..a1201d6589 100644
--- a/apps/menus/playlist_menu.c
+++ b/apps/menus/playlist_menu.c
@@ -40,7 +40,6 @@
 #include "splash.h"
 #include "general.h"
 #include "pathfuncs.h"
-#include "dir.h"
 
 /* load a screen to save the playlist passed in (or current playlist if NULL is passed) */
 int save_playlist_screen(struct playlist_info* playlist)
@@ -74,8 +73,7 @@ int save_playlist_screen(struct playlist_info* playlist)
     if (len <= 1) /* root or dynamic playlist */
         create_numbered_filename(temp, directoryonly, PLAYLIST_UNTITLED_PREFIX, ".m3u8",
                                  1 IF_CNFN_NUM_(, NULL));
-    else if (temp[len - 1] == PATH_SEPCH /* dir playlists other than root  */
-              && temp[len] == '\0')
+    else if (temp[len - 1] == PATH_SEPCH) /* dir playlists other than root  */
     {
         temp[len - 1] = '\0';
 
@@ -89,24 +87,19 @@ int save_playlist_screen(struct playlist_info* playlist)
             create_numbered_filename(temp, directoryonly, PLAYLIST_UNTITLED_PREFIX, ".m3u8",
                                      1 IF_CNFN_NUM_(, NULL));
     }
+    else if (!playlist) /* current playlist loaded from a playlist file */
+    {
+        if (!file_exists(temp))
+        {
+            splashf(HZ*2, ID2P(LANG_CATALOG_NO_DIRECTORY), temp);
+            return 0;
+        }
+    }
 
     if (catalog_pick_new_playlist_name(temp, sizeof(temp),
                                        playlist ? playlist->filename :
                                        playlist_get_current()->filename))
     {
-        /* Create dir if necessary */
-        if ((p = strrchr(temp, PATH_SEPCH)) && p != (char *) temp)
-        {
-            *p = '\0';
-
-            if (!dir_exists(temp) && mkdir(temp) < 0)
-            {
-                splashf(HZ, ID2P(LANG_CATALOG_NO_DIRECTORY), temp);
-                return 0;
-            }
-            *p = PATH_SEPCH;
-        }
-
         playlist_save(playlist, temp);
 
         /* reload in case playlist was saved to cwd */
diff --git a/apps/playlist_catalog.c b/apps/playlist_catalog.c
index 44ab6b8bd9..6998bda95e 100644
--- a/apps/playlist_catalog.c
+++ b/apps/playlist_catalog.c
@@ -411,16 +411,33 @@ static int remove_extension(char* path)
 bool catalog_pick_new_playlist_name(char *pl_name, size_t buf_size,
                                     const char* curr_pl_name)
 {
-    char bmark_file[MAX_PATH + 7];
+    char bmark_file[MAX_PATH + 7], *p;
     bool do_save = false;
     while (!do_save && !remove_extension(pl_name) &&
            !kbd_input(pl_name, buf_size - 7, NULL))
     {
-        do_save = true;
+        if (*pl_name == PATH_SEPCH) /* Require absolute filenames */
+        {
+            p = strrchr(pl_name, PATH_SEPCH);
+            do_save = *(p + 1);   /* Disallow empty filename */
+
+            /* prevent illegal characters */
+            fix_path_part(p, 1, strlen(p + 1));
+
+            /* Create dir if necessary */
+            if (do_save && p != (char *) pl_name)
+            {
+                *p = '\0';
+                do_save = dir_exists(pl_name) || mkdir(pl_name) == 0;
+                if (!do_save)
+                    splashf(HZ*2, ID2P(LANG_CATALOG_NO_DIRECTORY), pl_name);
+                *p = PATH_SEPCH;
+            }
+        }
         apply_playlist_extension(pl_name, buf_size);
 
         /* warn before overwriting existing (different) playlist */
-        if (!curr_pl_name || strcmp(curr_pl_name, pl_name))
+        if (do_save && (!curr_pl_name || strcmp(curr_pl_name, pl_name)))
         {
             if (file_exists(pl_name))
                 do_save = yesno_pop(ID2P(LANG_REALLY_OVERWRITE));
diff --git a/manual/main_menu/main.tex b/manual/main_menu/main.tex
index 37cd52332f..f90eb7f70e 100644
--- a/manual/main_menu/main.tex
+++ b/manual/main_menu/main.tex
@@ -172,7 +172,6 @@ The details of this menu are covered in
 specified file. Asks for confirmation whether to remove queued tracks
 from the current playlist, so that bookmarks can be created
 (see \reference{ref:createbookmark}).
-If no path is provided, playlist is saved to the root directory.
 
 \item[Create Playlist:]
   Rockbox will create a playlist with all tracks from the directory that is