diff --git a/indra/newview/llinventorybridge.cpp b/indra/newview/llinventorybridge.cpp
index 0e7e762d8159f0b6c737bc87cb63a089df630638..065a3cb9ae3a2279985501fbdeb84212931759e5 100644
--- a/indra/newview/llinventorybridge.cpp
+++ b/indra/newview/llinventorybridge.cpp
@@ -4115,7 +4115,11 @@ void LLFolderBridge::buildContextMenuOptions(U32 flags, menuentry_vec_t&   items
                     items.push_back(std::string("New Settings"));
                     items.push_back(std::string("upload_def"));
 
-                    if (!LLFolderType::lookupIsProtectedType(getPreferredType()) && !isParentSystemFolder(model, mUUID))
+                    if (model->findUserDefinedCategoryUUIDForType(LLFolderType::FT_FAVORITE) == mUUID)
+                    {
+                        items.push_back(std::string("Reset Favorites folder"));
+                    }
+                    else if (!LLFolderType::lookupIsProtectedType(getPreferredType()) && !isParentSystemFolder(model, mUUID))
                     {
                         items.push_back(std::string("Set Favorites folder"));
                     }
diff --git a/indra/newview/llinventorypanel.cpp b/indra/newview/llinventorypanel.cpp
index bca3cc0cf7390e808000763c6493bd22275d84fb..cda39c716b281efaf1f1961874e998c90b3745ca 100644
--- a/indra/newview/llinventorypanel.cpp
+++ b/indra/newview/llinventorypanel.cpp
@@ -182,6 +182,7 @@ LLInventoryPanel::LLInventoryPanel(const LLInventoryPanel::Params& p) :
 	mCommitCallbackRegistrar.add("Inventory.Share",  boost::bind(&LLAvatarActions::shareWithAvatars, this));
 	mCommitCallbackRegistrar.add("Inventory.FileUploadLocation", boost::bind(&LLInventoryPanel::fileUploadLocation, this, _2));
 	mCommitCallbackRegistrar.add("Inventory.SetFavoritesFolder", boost::bind(&LLInventoryPanel::setFavoritesFolder, this, _2));
+    mCommitCallbackRegistrar.add("Inventory.ResetFavoritesFolder", boost::bind(&LLInventoryPanel::resetFavoritesFolder, this, _2));
 }
 
 LLFolderView * LLInventoryPanel::createFolderRoot(LLUUID root_id )
@@ -1477,6 +1478,11 @@ void LLInventoryPanel::setFavoritesFolder(const LLSD& userdata)
     gSavedPerAccountSettings.setString("FavoritesFolder", LLFolderBridge::sSelf.get()->getUUID().asString());
 }
 
+void LLInventoryPanel::resetFavoritesFolder(const LLSD& userdata)
+{
+    gSavedPerAccountSettings.setString("FavoritesFolder", "");
+}
+
 void LLInventoryPanel::purgeSelectedItems()
 {
     if (!mFolderRoot.get()) return;
diff --git a/indra/newview/llinventorypanel.h b/indra/newview/llinventorypanel.h
index 9d6d56dd6994e79850784384f68d82ffb9eae8f1..e6d23eb6497e9d500049b31fe63d1df18f965c56 100644
--- a/indra/newview/llinventorypanel.h
+++ b/indra/newview/llinventorypanel.h
@@ -221,6 +221,7 @@ class LLInventoryPanel : public LLPanel
 	bool beginIMSession();
 	void fileUploadLocation(const LLSD& userdata);
 	void setFavoritesFolder(const LLSD& userdata);
+	void resetFavoritesFolder(const LLSD& userdata);
 	void purgeSelectedItems();
 	bool attachObject(const LLSD& userdata);
 	static void idle(void* user_data);
diff --git a/indra/newview/skins/default/xui/en/menu_inventory.xml b/indra/newview/skins/default/xui/en/menu_inventory.xml
index e7782a4ca0b67f48f9a6163d4ec1136b49f8bd26..b5cde602bd8b1c67daeeb407bb95d471811a3593 100644
--- a/indra/newview/skins/default/xui/en/menu_inventory.xml
+++ b/indra/newview/skins/default/xui/en/menu_inventory.xml
@@ -400,6 +400,13 @@
         <menu_item_call.on_click
          function="Inventory.SetFavoritesFolder"/>
       </menu_item_call>
+      <menu_item_call
+       label="Reset Favorites folder"
+       layout="topleft"
+       name="Reset Favorites folder">
+          <menu_item_call.on_click
+           function="Inventory.ResetFavoritesFolder"/>
+      </menu_item_call>
     <menu
      label="Change Type"
      layout="topleft"
diff --git a/indra/newview/skins/default/xui/en/strings.xml b/indra/newview/skins/default/xui/en/strings.xml
index c2b5286fc3ee4c98e448f61d9aca660c8f77514c..20ef10f1724604a6fc245bd531ef71f957e18833 100644
--- a/indra/newview/skins/default/xui/en/strings.xml
+++ b/indra/newview/skins/default/xui/en/strings.xml
@@ -2297,7 +2297,7 @@ For AI Character: Get the closest navigable point to the point provided.
 	<!-- inventory -->
 	<string name="InventoryNoMatchingItems">Didn't find what you're looking for? Try [secondlife:///app/search/all/[SEARCH_TERM] Search].</string>
 	<string name="InventoryNoMatchingRecentItems">Didn't find what you're looking for? Try [secondlife:///app/inventory/filters Show filters].</string>
-	<string name="InventoryFavoritItemsNotSelected">Click "Use as Favorites folder" on a folder of your choice. You can choose a different folder at any time. System folders cannot be used for Favorites.</string>
+	<string name="InventoryFavoritItemsNotSelected">Click "Use as Favorites folder" on a folder of your choice. You can choose a different folder at any time. System folders and folders inside them cannot be used for Favorites.</string>
 	<string name="PlacesNoMatchingItems">Didn't find what you're looking for? Try [secondlife:///app/search/places/[SEARCH_TERM] Search].</string>
 	<string name="FavoritesNoMatchingItems">Drag a landmark here to add it to your favorites.</string>
 	<string name="MarketplaceNoMatchingItems">No items found. Check the spelling of your search string and try again.</string>