diff --git a/daemon/app_supervisor.c b/daemon/app_supervisor.c
index d2616501..d23d9ad2 100644
--- a/daemon/app_supervisor.c
+++ b/daemon/app_supervisor.c
@@ -52,6 +52,7 @@ struct ladish_app_supervisor
 {
   char * name;
   char * opath;
+  char * dir;
   uint64_t version;
   uint64_t next_id;
   struct list_head applist;
@@ -93,6 +94,8 @@ ladish_app_supervisor_create(
     return false;
   }
 
+  supervisor_ptr->dir = NULL;
+
   supervisor_ptr->version = 0;
   supervisor_ptr->next_id = 1;
 
@@ -273,6 +276,12 @@ void ladish_app_supervisor_clear(ladish_app_supervisor_handle supervisor_handle)
   struct list_head * safe_node_ptr;
   struct ladish_app * app_ptr;
 
+  if (supervisor_ptr->dir != NULL)
+  {
+    free(supervisor_ptr->dir);
+    supervisor_ptr->dir = NULL;
+  }
+
   list_for_each_safe(node_ptr, safe_node_ptr, &supervisor_ptr->applist)
   {
     app_ptr = list_entry(node_ptr, struct ladish_app, siblings);
@@ -299,6 +308,30 @@ void ladish_app_supervisor_destroy(ladish_app_supervisor_handle supervisor_handl
   free(supervisor_ptr);
 }
 
+bool
+ladish_app_supervisor_set_directory(
+  ladish_app_supervisor_handle supervisor_handle,
+  const char * dir)
+{
+  char * dup;
+
+  dup = strdup(dir);
+  if (dup == NULL)
+  {
+    log_error("strdup(\"%s\") failed", dir);
+    return false;
+  }
+
+  if (supervisor_ptr->dir != NULL)
+  {
+    free(supervisor_ptr->dir);
+  }
+
+  supervisor_ptr->dir = dup;
+
+  return true;
+}
+
 bool ladish_app_supervisor_child_exit(ladish_app_supervisor_handle supervisor_handle, pid_t pid)
 {
   struct list_head * node_ptr;
@@ -365,7 +398,13 @@ bool ladish_app_supervisor_start_app(ladish_app_supervisor_handle supervisor_han
 
   ASSERT(app_ptr->pid == 0);
 
-  if (!loader_execute(supervisor_ptr->name, app_ptr->name, "/", app_ptr->terminal, app_ptr->commandline, &app_ptr->pid))
+  if (!loader_execute(
+        supervisor_ptr->name,
+        app_ptr->name,
+        supervisor_ptr->dir != NULL ? supervisor_ptr->dir : "/",
+        app_ptr->terminal,
+        app_ptr->commandline,
+        &app_ptr->pid))
   {
     return false;
   }
diff --git a/daemon/app_supervisor.h b/daemon/app_supervisor.h
index bca7d08e..e8ea5066 100644
--- a/daemon/app_supervisor.h
+++ b/daemon/app_supervisor.h
@@ -107,6 +107,18 @@ void
 ladish_app_supervisor_destroy(
   ladish_app_supervisor_handle supervisor_handle);
 
+/**
+ * Set the directory where apps will be started. If never called, apps will be started in the root directory ("/")
+ *
+ * @param[in] supervisor_handle supervisor object handle
+ *
+ * @return success status
+ */
+bool
+ladish_app_supervisor_set_directory(
+  ladish_app_supervisor_handle supervisor_handle,
+  const char * dir);
+
 /**
  * Mark that app has quit
  *
diff --git a/daemon/room.c b/daemon/room.c
index 1e7c95bd..afdf4352 100644
--- a/daemon/room.c
+++ b/daemon/room.c
@@ -5,7 +5,7 @@
  * Copyright (C) 2010 Nedko Arnaudov <nedko@arnaudov.name>
  *
  **************************************************************************
- * This file contains implementation of the room object
+ * This file contains the core parts of room object implementation
  **************************************************************************
  *
  * LADI Session Handler is free software; you can redistribute it and/or modify
@@ -24,7 +24,7 @@
  * 51 Franklin St, Fifth Floor, Boston, MA 02110-1301 USA.
  */
 
-#include "room.h"
+#include "room_internal.h"
 #include "../dbus_constants.h"
 #include "graph_dict.h"
 #include "../lib/wkports.h"
@@ -33,28 +33,6 @@
 #include "cmd.h"
 #include "../dbus/error.h"
 
-struct ladish_room
-{
-  struct list_head siblings;
-  uuid_t uuid;
-  char * name;
-  bool template;
-
-  /* these are not valid for templates */
-  uuid_t template_uuid;
-  ladish_graph_handle owner;
-  unsigned int index;
-  char * object_path;
-  dbus_object_path dbus_object;
-  ladish_graph_handle graph;
-  ladish_app_supervisor_handle app_supervisor;
-  ladish_client_handle client;
-  bool started;
-
-  char * project_dir;
-  char * project_name;
-};
-
 extern const struct dbus_interface_descriptor g_interface_room;
 
 /* implemented in studio.c */
@@ -690,112 +668,6 @@ fail:
   return NULL;
 }
 
-bool
-ladish_room_save_project(
-  ladish_room_handle room_handle,
-  const char * project_dir_param,
-  const char * project_name_param)
-{
-  bool first_time;
-  bool dir_supplied;
-  bool name_supplied;
-  char * project_dir;
-  char * project_name;
-  bool ret;
-
-  ret = false;
-  project_name = NULL;
-  project_dir = NULL;
-
-  /* project has either both name and dir no none of them */
-  ASSERT((room_ptr->project_dir == NULL && room_ptr->project_name == NULL) || (room_ptr->project_dir != NULL && room_ptr->project_name != NULL));
-  first_time = room_ptr->project_dir == NULL;
-
-  dir_supplied = strlen(project_dir_param) != 0;
-  name_supplied = strlen(project_name_param) != 0;
-
-  if (first_time)
-  {
-    if (!dir_supplied && !name_supplied)
-    {
-      log_error("Cannot save unnamed project in room '%s'", room_ptr->name);
-      goto exit;
-    }
-
-    if (dir_supplied && name_supplied)
-    {
-      project_dir = strdup(project_dir_param);
-      project_name = strdup(project_name_param);
-    }
-    else if (dir_supplied)
-    {
-      ASSERT(!name_supplied);
-      /* TODO */
-      log_error("Deducing project name from project dir is not implemented yet");
-      goto exit;
-    }
-    else if (name_supplied)
-    {
-      ASSERT(!dir_supplied);
-      /* TODO */
-      log_error("Deducing project dir from project name is not implemented yet");
-      goto exit;
-    }
-    else
-    {
-      ASSERT_NO_PASS;
-      goto exit;
-    }
-  }
-  else
-  {
-    ASSERT(room_ptr->project_name != NULL);
-    ASSERT(room_ptr->project_dir != NULL);
-
-    project_name = name_supplied ? strdup(project_name_param) : room_ptr->project_name;
-    project_dir = dir_supplied ? strdup(project_dir_param) : room_ptr->project_dir;
-  }
-
-  if (project_name == NULL || project_dir == NULL)
-  {
-    log_error("strdup() failed for project name or dir");
-    goto exit;
-  }
-
-  log_info("Saving project '%s' in room '%s' to '%s'", project_name, room_ptr->name, project_dir);
-  log_error("NOT IMPLEMENTED YET");
-  ret = true;
-
-exit:
-  if (ret)
-  {
-    ASSERT(project_name != NULL);
-    if (project_name != room_ptr->project_name)
-    {
-      free(room_ptr->project_name);
-      room_ptr->project_name = project_name;
-    }
-    ASSERT(project_dir != NULL);
-    if (project_dir != room_ptr->project_dir)
-    {
-      free(room_ptr->project_dir);
-      room_ptr->project_dir = project_dir;
-    }
-  }
-
-  /* free strings that are allocated and stored only in the stack */
-  if (project_name != NULL && project_name != room_ptr->project_name)
-  {
-    free(project_name);
-  }
-  if (project_dir != NULL && project_dir != room_ptr->project_dir)
-  {
-    free(project_dir);
-  }
-
-  return ret;
-}
-
 #undef room_ptr
 
 ladish_room_handle ladish_room_from_list_node(struct list_head * node_ptr)
diff --git a/daemon/room_internal.h b/daemon/room_internal.h
new file mode 100644
index 00000000..7126f82b
--- /dev/null
+++ b/daemon/room_internal.h
@@ -0,0 +1,57 @@
+/* -*- Mode: C ; c-basic-offset: 2 -*- */
+/*
+ * LADI Session Handler (ladish)
+ *
+ * Copyright (C) 2010 Nedko Arnaudov <nedko@arnaudov.name>
+ *
+ **************************************************************************
+ * This file contains internal declarations used by the room object implementation
+ **************************************************************************
+ *
+ * LADI Session Handler is free software; you can redistribute it and/or modify
+ * it under the terms of the GNU General Public License as published by
+ * the Free Software Foundation; either version 2 of the License, or
+ * (at your option) any later version.
+ *
+ * LADI Session Handler is distributed in the hope that it will be useful,
+ * but WITHOUT ANY WARRANTY; without even the implied warranty of
+ * MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+ * GNU General Public License for more details.
+ *
+ * You should have received a copy of the GNU General Public License
+ * along with LADI Session Handler. If not, see <http://www.gnu.org/licenses/>
+ * or write to the Free Software Foundation, Inc.,
+ * 51 Franklin St, Fifth Floor, Boston, MA 02110-1301 USA.
+ */
+
+#ifndef ROOM_INTERNAL_H__FAF5B68F_E419_442A_8F9B_C729BAC00422__INCLUDED
+#define ROOM_INTERNAL_H__FAF5B68F_E419_442A_8F9B_C729BAC00422__INCLUDED
+
+#include "room.h"
+
+#define LADISH_PROJECT_FILENAME "/ladish-project.xml"
+
+struct ladish_room
+{
+  struct list_head siblings;
+  uuid_t uuid;
+  char * name;
+  bool template;
+
+  /* these are not valid for templates */
+  uuid_t template_uuid;
+  ladish_graph_handle owner;
+  unsigned int index;
+  char * object_path;
+  dbus_object_path dbus_object;
+  ladish_graph_handle graph;
+  ladish_app_supervisor_handle app_supervisor;
+  ladish_client_handle client;
+  bool started;
+
+  uuid_t project_uuid;
+  char * project_dir;
+  char * project_name;
+};
+
+#endif /* #ifndef ROOM_INTERNAL_H__FAF5B68F_E419_442A_8F9B_C729BAC00422__INCLUDED */
diff --git a/daemon/room_save.c b/daemon/room_save.c
new file mode 100644
index 00000000..25d5d070
--- /dev/null
+++ b/daemon/room_save.c
@@ -0,0 +1,298 @@
+/* -*- Mode: C ; c-basic-offset: 2 -*- */
+/*
+ * LADI Session Handler (ladish)
+ *
+ * Copyright (C) 2010 Nedko Arnaudov <nedko@arnaudov.name>
+ *
+ **************************************************************************
+ * This file contains the parts of room object implementation
+ * that are related to project save functionality
+ **************************************************************************
+ *
+ * LADI Session Handler is free software; you can redistribute it and/or modify
+ * it under the terms of the GNU General Public License as published by
+ * the Free Software Foundation; either version 2 of the License, or
+ * (at your option) any later version.
+ *
+ * LADI Session Handler is distributed in the hope that it will be useful,
+ * but WITHOUT ANY WARRANTY; without even the implied warranty of
+ * MERCHANTABILITY or FITNESS FOR A PARTICULAR PURPOSE.  See the
+ * GNU General Public License for more details.
+ *
+ * You should have received a copy of the GNU General Public License
+ * along with LADI Session Handler. If not, see <http://www.gnu.org/licenses/>
+ * or write to the Free Software Foundation, Inc.,
+ * 51 Franklin St, Fifth Floor, Boston, MA 02110-1301 USA.
+ */
+
+#include <sys/types.h>
+#include <sys/stat.h>
+#include <fcntl.h>
+#include <unistd.h>
+
+#include "room_internal.h"
+#include "../catdup.h"
+#include "save.h"
+
+#define PROJECT_HEADER_TEXT BASE_NAME " Project.\n"
+
+static bool ladish_room_save_project_do(struct ladish_room * room_ptr)
+{
+  bool ret;
+  time_t timestamp;
+  char timestamp_str[26];
+  char uuid_str[37];
+  char * filename;
+  char * bak_filename;
+  int fd;
+
+  log_info("Saving project '%s' in room '%s' to '%s'", room_ptr->project_name, room_ptr->name, room_ptr->project_dir);
+
+  time(&timestamp);
+  ctime_r(&timestamp, timestamp_str);
+  timestamp_str[24] = 0;
+
+  ret = false;
+
+  uuid_generate(room_ptr->project_uuid); /* TODO: the uuid should be changed on "save as" but not on "rename" */
+  uuid_unparse(room_ptr->project_uuid, uuid_str);
+
+  filename = catdup(room_ptr->project_dir, LADISH_PROJECT_FILENAME);
+  if (filename == NULL)
+  {
+    log_error("catdup() failed to compose project xml filename");
+    goto exit;
+  }
+
+  bak_filename = catdup(filename, ".bak");
+  if (bak_filename == NULL)
+  {
+    log_error("catdup() failed to compose project xml backup filename");
+    goto free_filename;
+  }
+
+  fd = open(filename, O_WRONLY | O_TRUNC | O_CREAT, 0666);
+  if (fd == -1)
+  {
+    log_error("open(%s) failed: %d (%s)", filename, errno, strerror(errno));
+    goto free_bak_filename;
+  }
+
+  if (!ladish_write_string(fd, "<?xml version=\"1.0\"?>\n"))
+  {
+    goto close;
+  }
+
+  if (!ladish_write_string(fd, "<!--\n"))
+  {
+    goto close;
+  }
+
+  if (!ladish_write_string(fd, PROJECT_HEADER_TEXT))
+  {
+    goto close;
+  }
+
+  if (!ladish_write_string(fd, "-->\n"))
+  {
+    goto close;
+  }
+
+  if (!ladish_write_string(fd, "<!-- "))
+  {
+    goto close;
+  }
+
+  if (!ladish_write_string(fd, timestamp_str))
+  {
+    goto close;
+  }
+
+  if (!ladish_write_string(fd, " -->\n"))
+  {
+    goto close;
+  }
+
+  if (!ladish_write_string(fd, "<project name=\""))
+  {
+    goto close;
+  }
+
+  if (!ladish_write_string(fd, room_ptr->project_name)) /* TODO: escaping */
+  {
+    return false;
+  }
+
+  if (!ladish_write_string(fd, "\" uuid=\""))
+  {
+    return false;
+  }
+
+  if (!ladish_write_string(fd, uuid_str))
+  {
+    return false;
+  }
+
+  if (!ladish_write_string(fd, "\">\n"))
+  {
+    goto close;
+  }
+
+  if (!ladish_write_indented_string(fd, 1, "<room>\n"))
+  {
+    goto close;
+  }
+
+  if (!ladish_write_room_link_ports(fd, 2, (ladish_room_handle)room_ptr))
+  {
+    log_error("ladish_write_room_link_ports() failed");
+    return false;
+  }
+
+  if (!ladish_write_indented_string(fd, 1, "</room>\n"))
+  {
+    goto close;
+  }
+
+  if (!ladish_write_vgraph(fd, 1, room_ptr->graph, room_ptr->app_supervisor))
+  {
+    log_error("ladish_write_vgraph() failed for studio");
+    goto close;
+  }
+
+  if (!ladish_write_dict(fd, 1, ladish_graph_get_dict(room_ptr->graph)))
+  {
+    goto close;
+  }
+
+  if (!ladish_write_string(fd, "</project>\n"))
+  {
+    goto close;
+  }
+
+  ret = true;
+
+close:
+  close(fd);
+free_bak_filename:
+  free(bak_filename);
+free_filename:
+  free(filename);
+exit:
+  return ret;
+}
+
+#define room_ptr ((struct ladish_room *)room_handle)
+
+bool
+ladish_room_save_project(
+  ladish_room_handle room_handle,
+  const char * project_dir_param,
+  const char * project_name_param)
+{
+  bool first_time;
+  bool dir_supplied;
+  bool name_supplied;
+  char * project_dir;
+  char * project_name;
+  char * old_project_dir;
+  char * old_project_name;
+  bool ret;
+
+  ret = false;
+  project_name = NULL;
+  project_dir = NULL;
+
+  /* project has either both name and dir no none of them */
+  ASSERT((room_ptr->project_dir == NULL && room_ptr->project_name == NULL) || (room_ptr->project_dir != NULL && room_ptr->project_name != NULL));
+  first_time = room_ptr->project_dir == NULL;
+
+  dir_supplied = strlen(project_dir_param) != 0;
+  name_supplied = strlen(project_name_param) != 0;
+
+  if (first_time)
+  {
+    if (!dir_supplied && !name_supplied)
+    {
+      log_error("Cannot save unnamed project in room '%s'", room_ptr->name);
+      goto exit;
+    }
+
+    if (dir_supplied && name_supplied)
+    {
+      project_dir = strdup(project_dir_param);
+      project_name = strdup(project_name_param);
+    }
+    else if (dir_supplied)
+    {
+      ASSERT(!name_supplied);
+      /* TODO */
+      log_error("Deducing project name from project dir is not implemented yet");
+      goto exit;
+    }
+    else if (name_supplied)
+    {
+      ASSERT(!dir_supplied);
+      /* TODO */
+      log_error("Deducing project dir from project name is not implemented yet");
+      goto exit;
+    }
+    else
+    {
+      ASSERT_NO_PASS;
+      goto exit;
+    }
+
+    ladish_app_supervisor_set_directory(room_ptr->app_supervisor, project_dir);
+  }
+  else
+  {
+    ASSERT(room_ptr->project_name != NULL);
+    ASSERT(room_ptr->project_dir != NULL);
+
+    project_name = name_supplied ? strdup(project_name_param) : room_ptr->project_name;
+    project_dir = dir_supplied ? strdup(project_dir_param) : room_ptr->project_dir;
+  }
+
+  if (project_name == NULL || project_dir == NULL)
+  {
+    log_error("strdup() failed for project name or dir");
+    goto exit;
+  }
+
+  old_project_dir = room_ptr->project_dir;
+  old_project_name = room_ptr->project_name;
+  room_ptr->project_name = project_name;
+  room_ptr->project_dir = project_dir;
+  ret = ladish_room_save_project_do(room_ptr);
+  if (!ret)
+  {
+    room_ptr->project_name = old_project_name;
+    room_ptr->project_dir = old_project_dir;
+  }
+
+exit:
+  if (project_name != NULL && project_name != room_ptr->project_name)
+  {
+    free(room_ptr->project_name);
+  }
+
+  if (project_dir != NULL && project_dir != room_ptr->project_dir)
+  {
+    free(room_ptr->project_dir);
+  }
+
+  /* free strings that are allocated and stored only in the stack */
+  if (project_name != NULL && project_name != room_ptr->project_name)
+  {
+    free(project_name);
+  }
+  if (project_dir != NULL && project_dir != room_ptr->project_dir)
+  {
+    free(project_dir);
+  }
+
+  return ret;
+}
+
+#undef room_ptr
diff --git a/daemon/save.c b/daemon/save.c
index 8fb45b2b..b82a10e7 100644
--- a/daemon/save.c
+++ b/daemon/save.c
@@ -28,6 +28,7 @@
 
 #include "save.h"
 #include "escape.h"
+#include "studio.h"
 
 bool ladish_write_string(int fd, const char * string)
 {
@@ -182,11 +183,18 @@ static bool ladish_get_vgraph_port_uuids(ladish_graph_handle vgraph, ladish_port
 {
   bool link;
 
-  link = ladish_port_is_link(port);
-  if (link)
+  if (vgraph != ladish_studio_get_studio_graph())
   {
-    /* get the generated port uuid that is used for identification in the virtual graph */
-    ladish_graph_get_port_uuid(vgraph, port, uuid);
+    link = false;               /* room ports are saved using their fixed uuids */
+  }
+  else
+  {
+    link = ladish_port_is_link(port);
+    if (link)
+    {
+      /* get the generated port uuid that is used for identification in the virtual graph */
+      ladish_graph_get_port_uuid(vgraph, port, uuid);
+    }
   }
 
   if (!link || link_uuid != NULL)
@@ -483,7 +491,7 @@ ladish_write_room_port(
   ASSERT(!(midi && type == JACKDBUS_PORT_TYPE_AUDIO)); /* but not both */
   type_str = midi ? "midi" : "audio";
 
-  log_info("saving studio room %s %s port '%s' (%s)", direction_str, type_str, name, str);
+  log_info("saving room %s %s port '%s' (%s)", direction_str, type_str, name, str);
 
   if (!ladish_write_indented_string(fd, indent, "<port name=\""))
   {
diff --git a/daemon/studio.c b/daemon/studio.c
index f459e077..32aae5f3 100644
--- a/daemon/studio.c
+++ b/daemon/studio.c
@@ -736,6 +736,11 @@ ladish_graph_handle ladish_studio_get_jack_graph(void)
   return g_studio.jack_graph;
 }
 
+ladish_graph_handle ladish_studio_get_studio_graph(void)
+{
+  return g_studio.studio_graph;
+}
+
 struct ladish_studio_app_supervisor_match_context
 {
   const char * opath;
diff --git a/daemon/studio.h b/daemon/studio.h
index 80daa0aa..4cf55da9 100644
--- a/daemon/studio.h
+++ b/daemon/studio.h
@@ -63,6 +63,7 @@ ladish_app_supervisor_handle ladish_studio_find_app_supervisor(const char * opat
 struct ladish_cqueue * ladish_studio_get_cmd_queue(void);
 ladish_virtualizer_handle ladish_studio_get_virtualizer(void);
 ladish_graph_handle ladish_studio_get_jack_graph(void);
+ladish_graph_handle ladish_studio_get_studio_graph(void);
 bool ladish_studio_has_rooms(void);
 
 unsigned int ladish_studio_get_room_index(void);
diff --git a/wscript b/wscript
index 38f467cf..9a3079d9 100644
--- a/wscript
+++ b/wscript
@@ -272,6 +272,7 @@ def build(bld):
         'cqueue.c',
         'app_supervisor.c',
         'room.c',
+        'room_save.c',
         ]:
         daemon.source.append(os.path.join("daemon", source))