diff --git a/wp-admin/includes/schema.php b/wp-admin/includes/schema.php
index cc2f08be6..bebbb0a81 100644
--- a/wp-admin/includes/schema.php
+++ b/wp-admin/includes/schema.php
@@ -189,12 +189,10 @@ function populate_options() {
 	do_action('populate_options');
 
 	if ( ini_get('safe_mode') ) {
-		// Safe mode screws up mkdir(), so we must use a flat structure.
+		// Safe mode can break mkdir() so use a flat structure by default.
 		$uploads_use_yearmonth_folders = 0;
-		$upload_path = WP_CONTENT_DIR;
 	} else {
 		$uploads_use_yearmonth_folders = 1;
-		$upload_path = WP_CONTENT_DIR . '/uploads';
 	}
 
 	$options = array(
@@ -265,7 +263,7 @@ function populate_options() {
 
 	// 2.0.1
 	'uploads_use_yearmonth_folders' => $uploads_use_yearmonth_folders,
-	'upload_path' => $upload_path,
+	'upload_path' => '',
 
 	// 2.0.3
 	'secret' => wp_generate_password(64),
diff --git a/wp-admin/options-misc.php b/wp-admin/options-misc.php
index 9e2253670..73575a4e8 100644
--- a/wp-admin/options-misc.php
+++ b/wp-admin/options-misc.php
@@ -30,7 +30,7 @@ include('admin-header.php');
 <table class="form-table">
 <tr valign="top">
 <th scope="row"><label for="upload_path"><?php _e('Store uploads in this folder'); ?></label></th>
-<td><input name="upload_path" type="text" id="upload_path" value="<?php echo esc_attr(str_replace(ABSPATH, '', get_option('upload_path'))); ?>" class="regular-text code" />
+<td><input name="upload_path" type="text" id="upload_path" value="<?php echo esc_attr(get_option('upload_path')); ?>" class="regular-text code" />
 <span class="description"><?php _e('Default is <code>wp-content/uploads</code>'); ?></span>
 </td>
 </tr>
diff --git a/wp-includes/functions.php b/wp-includes/functions.php
index 19ac29c94..5446f3e84 100644
--- a/wp-includes/functions.php
+++ b/wp-includes/functions.php
@@ -2035,16 +2035,20 @@ function wp_upload_dir( $time = null ) {
 	$siteurl = get_option( 'siteurl' );
 	$upload_path = get_option( 'upload_path' );
 	$upload_path = trim($upload_path);
-	if ( empty($upload_path) )
+	if ( empty($upload_path) ) {
 		$dir = WP_CONTENT_DIR . '/uploads';
-	else
+	} else {
 		$dir = $upload_path;
-
-	// $dir is absolute, $path is (maybe) relative to ABSPATH
-	$dir = path_join( ABSPATH, $dir );
+		if ( 'wp-content/uploads' == $upload_path ) {
+			$dir = WP_CONTENT_DIR . '/uploads';
+		} elseif ( 0 !== strpos($dir, ABSPATH) ) {
+			// $dir is absolute, $upload_path is (maybe) relative to ABSPATH
+			$dir = path_join( ABSPATH, $dir );
+		}
+	}
 
 	if ( !$url = get_option( 'upload_url_path' ) ) {
-		if ( empty($upload_path) or ( $upload_path == $dir ) )
+		if ( empty($upload_path) || ( 'wp-content/uploads' == $upload_path ) || ( $upload_path == $dir ) )
 			$url = WP_CONTENT_URL . '/uploads';
 		else
 			$url = trailingslashit( $siteurl ) . $upload_path;