diff --git a/core/org.eclipse.cdt.core.tests/model/org/eclipse/cdt/core/settings/model/ExternalSettingsProviderTests.java b/core/org.eclipse.cdt.core.tests/model/org/eclipse/cdt/core/settings/model/ExternalSettingsProviderTests.java
index 76a6b0195a9..aeb0616159a 100644
--- a/core/org.eclipse.cdt.core.tests/model/org/eclipse/cdt/core/settings/model/ExternalSettingsProviderTests.java
+++ b/core/org.eclipse.cdt.core.tests/model/org/eclipse/cdt/core/settings/model/ExternalSettingsProviderTests.java
@@ -27,7 +27,7 @@ import org.eclipse.core.runtime.Path;
 
 public class ExternalSettingsProviderTests extends BaseTestCase{
 	private static final String PROJ_NAME_PREFIX = "espt_";
-	ICProject p1, p2, p3;
+	ICProject p1, p2, p3, p4;
 	
 	public static TestSuite suite() {
 		return suite(ExternalSettingsProviderTests.class, "_");
@@ -37,6 +37,7 @@ public class ExternalSettingsProviderTests extends BaseTestCase{
 		p1 = CProjectHelper.createNewStileCProject(PROJ_NAME_PREFIX + "a", IPDOMManager.ID_NO_INDEXER);
 		p2 = CProjectHelper.createNewStileCProject(PROJ_NAME_PREFIX + "b", IPDOMManager.ID_NO_INDEXER);
 		p3 = CProjectHelper.createNewStileCProject(PROJ_NAME_PREFIX + "c", IPDOMManager.ID_NO_INDEXER);
+		p4 = CProjectHelper.createNewStileCProject(PROJ_NAME_PREFIX + "d", IPDOMManager.ID_NO_INDEXER);
 	}
 	
 	public void testRefs() throws Exception {
@@ -203,6 +204,67 @@ public class ExternalSettingsProviderTests extends BaseTestCase{
 		assertTrue(Arrays.equals(expectedEntries2, entries));
 	}
 	
+	public void testRestoreDefaults() throws Exception {
+		TestExtSettingsProvider.setVariantNum(0);
+
+		CoreModel model = CoreModel.getDefault();
+		ICProjectDescriptionManager mngr = model.getProjectDescriptionManager();
+		IProject project = p4.getProject();
+		
+		ICProjectDescription des = model.getProjectDescription(project);
+		ICConfigurationDescription cfgDes = des.getConfigurations()[0];
+		ICLanguageSetting ls = cfgDes.getLanguageSettingForFile(new Path("a.c"), true);
+		ICLanguageSettingEntry[] entries = ls.getSettingEntries(ICSettingEntry.INCLUDE_PATH);
+		assertEquals(0, entries.length);
+		ICSourceEntry[] sourceEntries = cfgDes.getSourceEntries();
+		ICSourceEntry[] expectedSourceEntries = new ICSourceEntry[]{
+			new CSourceEntry(project.getFullPath(), null, ICSettingEntry.RESOLVED)
+		};
+		assertEquals(1, sourceEntries.length);
+		assertTrue(Arrays.equals(expectedSourceEntries, sourceEntries));
+		String[] extPIds = new String[]{CTestPlugin.PLUGIN_ID + ".testExtSettingsProvider"};
+		cfgDes.setExternalSettingsProviderIds(extPIds);
+		
+
+		ls = cfgDes.getLanguageSettingForFile(new Path("a.c"), true);
+		entries = ls.getSettingEntries(ICSettingEntry.INCLUDE_PATH);
+		ICLanguageSettingEntry[] expectedEntries = new ICLanguageSettingEntry[]{
+				new CIncludePathEntry("ip_a", 0),
+				new CIncludePathEntry("ip_b", 0),
+		};
+		assertTrue(Arrays.equals(expectedEntries, entries));
+
+		model.setProjectDescription(project, des);
+		
+		des = model.getProjectDescription(project);
+		cfgDes = des.getConfigurations()[0];
+		ls = cfgDes.getLanguageSettingForFile(new Path("a.c"), true);
+		entries = ls.getSettingEntries(ICSettingEntry.INCLUDE_PATH);
+		assertTrue(Arrays.equals(expectedEntries, entries));
+
+		ls.setSettingEntries(ICSettingEntry.INCLUDE_PATH, (ICLanguageSettingEntry[])null);
+		entries = ls.getSettingEntries(ICSettingEntry.INCLUDE_PATH);
+		assertTrue(Arrays.equals(expectedEntries, entries));
+
+		cfgDes.setSourceEntries(null);
+		expectedSourceEntries = new ICSourceEntry[]{
+				new CSourceEntry(project.getFullPath().append("sp_a"), null, 0),
+				new CSourceEntry(project.getFullPath().append("sp_b"), null, 0),	
+		};
+		sourceEntries = cfgDes.getSourceEntries();
+		assertEquals(2, sourceEntries.length);
+		assertTrue(Arrays.equals(expectedSourceEntries, sourceEntries));
+
+		cfgDes.getBuildSetting().setOutputDirectories(null);
+		ICOutputEntry[] expectedOutputEntries = new ICOutputEntry[]{
+				new COutputEntry("op_a", null, 0),
+				new COutputEntry("op_b", null, 0),
+		};
+		ICOutputEntry[] outputEntries = cfgDes.getBuildSetting().getOutputDirectories();
+		assertEquals(2, outputEntries.length);
+		assertTrue(Arrays.equals(expectedOutputEntries, outputEntries));
+	}
+	
 	protected void tearDown() throws Exception {
 		try {
 			p1.getProject().delete(true, null);
@@ -216,5 +278,9 @@ public class ExternalSettingsProviderTests extends BaseTestCase{
 			p3.getProject().delete(true, null);
 		} catch (CoreException e){
 		}
+		try {
+			p4.getProject().delete(true, null);
+		} catch (CoreException e){
+		}
 	}
 }
diff --git a/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/CBuildSetting.java b/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/CBuildSetting.java
index c5d0fb9b37c..a2184ca20d2 100644
--- a/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/CBuildSetting.java
+++ b/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/CBuildSetting.java
@@ -56,6 +56,9 @@ public class CBuildSetting extends CDataProxy implements ICBuildSetting {
 	public void setOutputDirectories(ICOutputEntry[] entries) {
 		CBuildData data = getBuildData(true);
 		data.setOutputDirectories(entries);
+		if(entries == null){
+			CExternalSettingsManager.getInstance().restoreOutputEntryDefaults(getConfiguration());
+		}
 	}
 
 	public final int getType() {
diff --git a/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/CConfigurationDescription.java b/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/CConfigurationDescription.java
index b5cf1f854f9..e4054d1abf3 100644
--- a/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/CConfigurationDescription.java
+++ b/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/CConfigurationDescription.java
@@ -476,11 +476,17 @@ public class CConfigurationDescription extends CDataProxyContainer implements IC
 	public void setSourceEntries(ICSourceEntry[] entries) throws CoreException {
 		CConfigurationData data = getConfigurationData(true);
 		IProject project = fIsPreference ? null : getProjectDescription().getProject();
-		if(entries != null && entries.length == 0)
+		boolean restoreDefault = false;
+		if(entries == null)
+			restoreDefault = true;
+		else if(entries.length == 0)
 			entries = null;
 		entries = CDataUtil.adjustEntries(entries, false, project);
 		data.setSourceEntries(entries);
 		
+		if(restoreDefault){
+			CExternalSettingsManager.getInstance().restoreSourceEntryDefaults(this);
+		}
 //		ICSourceEntry entry;
 //		IPath entryPath;
 //		IPath paths[];
diff --git a/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/CExternalSettingsManager.java b/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/CExternalSettingsManager.java
index 81135cdfcd5..8e353564751 100644
--- a/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/CExternalSettingsManager.java
+++ b/core/org.eclipse.cdt.core/model/org/eclipse/cdt/internal/core/settings/model/CExternalSettingsManager.java
@@ -795,7 +795,27 @@ public class CExternalSettingsManager implements ICExternalSettingsListener, ICP
 	private CExternalSettinsDeltaCalculator getDeltaCalculator(){
 		return CExternalSettinsDeltaCalculator.getInstance();
 	}
-	
+
+	public void restoreSourceEntryDefaults(ICConfigurationDescription cfg){
+		CfgContainer cr = new CfgContainer(cfg);
+		CfgContainerRefInfoContainer ric = new CfgContainerRefInfoContainer(cr);
+		CExternalSetting[] settings = ric.getRefInfo(false).createExternalSettings();
+		ExtSettingsDelta[] deltas = getDeltaCalculator().getSettingChange(settings, null);
+		if(deltas != null){
+			CExternalSettingsDeltaProcessor.applySourceEntriesChange(cfg, deltas);
+		}
+	}
+
+	public void restoreOutputEntryDefaults(ICConfigurationDescription cfg){
+		CfgContainer cr = new CfgContainer(cfg);
+		CfgContainerRefInfoContainer ric = new CfgContainerRefInfoContainer(cr);
+		CExternalSetting[] settings = ric.getRefInfo(false).createExternalSettings();
+		ExtSettingsDelta[] deltas = getDeltaCalculator().getSettingChange(settings, null);
+		if(deltas != null){
+			CExternalSettingsDeltaProcessor.applyOutputEntriesChange(cfg, deltas);
+		}
+	}
+
 	public void restoreDefaults(ICLanguageSetting ls, int entryKinds){
 		ICConfigurationDescription cfg = ls.getConfiguration();
 		CfgContainer cr = new CfgContainer(cfg);