diff --git a/res/values/arrays.xml b/res/values/arrays.xml
index ae0fba85a56..ff68cc7d85c 100644
--- a/res/values/arrays.xml
+++ b/res/values/arrays.xml
@@ -354,4 +354,18 @@
         <item>3</item>
     </string-array>
 
+    <!-- Apps on SD instalaltion location options in ApplicationSettings -->
+    <string-array name="app_install_location_entries">
+        <item>Internal device storage</item>
+        <item>Removable SD card</item>
+        <item>Let the system decide</item>
+    </string-array>
+
+    <!-- Do not translate. -->
+    <string-array name="app_install_location_values" translatable="false">
+        <item>device</item>
+        <item>sdcard</item>
+        <item>auto</item>
+    </string-array>
+
 </resources>
diff --git a/res/values/strings.xml b/res/values/strings.xml
index ce45ec521c2..bc19df5f1fa 100644
--- a/res/values/strings.xml
+++ b/res/values/strings.xml
@@ -1633,6 +1633,10 @@ found in the list of installed applications.</string>
     <string name="force_stop_dlg_title">Force Stop</string>
     <!-- Manage applications, text for dialog when killing persistent apps-->
     <string name="force_stop_dlg_text">This application will be restarted right way. Are you sure you want to force stop?</string>
+    <!-- Manage applications, application installation location title -->
+    <string name="app_install_location_title">Preferred install location</string>
+    <!-- Manage applications. application installation location summary -->
+    <string name="app_install_location_summary">Change the preferred installation location for new applications.</string>
 
     <!-- Services settings screen, setting option name for the user to go to the screen to view running services -->
     <string name="runningservices_settings_title">Running services</string>
diff --git a/res/xml/application_settings.xml b/res/xml/application_settings.xml
index b5418e810de..4df21da43ba 100644
--- a/res/xml/application_settings.xml
+++ b/res/xml/application_settings.xml
@@ -25,7 +25,15 @@
             android:summaryOff="@string/install_unknown_applications"
             android:summaryOn="@string/install_unknown_applications"
             android:persistent="false" />
-        
+
+    <ListPreference
+        android:key="app_install_location"
+        android:title="@string/app_install_location_title"
+        android:summary="@string/app_install_location_summary"
+        android:persistent="false"
+        android:entries="@array/app_install_location_entries"
+        android:entryValues="@array/app_install_location_values"/>
+
     <PreferenceScreen
             android:key="quick_launch"
             android:title="@string/quick_launch_title"
diff --git a/src/com/android/settings/ApplicationSettings.java b/src/com/android/settings/ApplicationSettings.java
index 6a8aa81128d..9b7a9194e6a 100644
--- a/src/com/android/settings/ApplicationSettings.java
+++ b/src/com/android/settings/ApplicationSettings.java
@@ -21,21 +21,35 @@ import android.content.DialogInterface;
 import android.content.res.Configuration;
 import android.os.Bundle;
 import android.preference.CheckBoxPreference;
+import android.preference.ListPreference;
 import android.preference.Preference;
 import android.preference.PreferenceActivity;
 import android.preference.PreferenceScreen;
+import android.preference.Preference.OnPreferenceChangeListener;
 import android.provider.Settings;
 
 public class ApplicationSettings extends PreferenceActivity implements
         DialogInterface.OnClickListener {
     
     private static final String KEY_TOGGLE_INSTALL_APPLICATIONS = "toggle_install_applications";
+    private static final String KEY_APP_INSTALL_LOCATION = "app_install_location";
     private static final String KEY_QUICK_LAUNCH = "quick_launch";
 
+    // App installation location. Default is ask the user.
+    private static final int APP_INSTALL_AUTO = 0;
+    private static final int APP_INSTALL_DEVICE = 1;
+    private static final int APP_INSTALL_SDCARD = 2;
+    
+    private static final String APP_INSTALL_DEVICE_ID = "device";
+    private static final String APP_INSTALL_SDCARD_ID = "sdcard";
+    private static final String APP_INSTALL_AUTO_ID = "auto";
+    
     private CheckBoxPreference mToggleAppInstallation;
-    
+
+    private ListPreference mInstallLocation;
+
     private DialogInterface mWarnInstallApps;
-    
+
     @Override
     protected void onCreate(Bundle icicle) {
         super.onCreate(icicle);
@@ -45,6 +59,23 @@ public class ApplicationSettings extends PreferenceActivity implements
         mToggleAppInstallation = (CheckBoxPreference) findPreference(KEY_TOGGLE_INSTALL_APPLICATIONS);
         mToggleAppInstallation.setChecked(isNonMarketAppsAllowed());
 
+        mInstallLocation = (ListPreference) findPreference(KEY_APP_INSTALL_LOCATION);
+        // Is app default install location set?
+        boolean userSetInstLocation = (Settings.System.getInt(getContentResolver(),
+                Settings.System.SET_INSTALL_LOCATION, 0) != 0);
+        if (!userSetInstLocation) {
+            getPreferenceScreen().removePreference(mInstallLocation);
+        } else {
+            mInstallLocation.setValue(getAppInstallLocation());
+            mInstallLocation.setOnPreferenceChangeListener(new OnPreferenceChangeListener() {
+                public boolean onPreferenceChange(Preference preference, Object newValue) {
+                    String value = (String) newValue;
+                    handleUpdateAppInstallLocation(value);
+                    return false;
+                }
+            });
+        }
+
         if (getResources().getConfiguration().keyboard == Configuration.KEYBOARD_NOKEYS) {
             // No hard keyboard, remove the setting for quick launch
             Preference quickLaunchSetting = findPreference(KEY_QUICK_LAUNCH);
@@ -52,6 +83,24 @@ public class ApplicationSettings extends PreferenceActivity implements
         }
     }
 
+    protected void handleUpdateAppInstallLocation(final String value) {
+        if(APP_INSTALL_DEVICE_ID.equals(value)) {
+            Settings.System.putInt(getContentResolver(),
+                    Settings.System.DEFAULT_INSTALL_LOCATION, APP_INSTALL_DEVICE);
+        } else if (APP_INSTALL_SDCARD_ID.equals(value)) {
+            Settings.System.putInt(getContentResolver(),
+                    Settings.System.DEFAULT_INSTALL_LOCATION, APP_INSTALL_SDCARD);
+        } else if (APP_INSTALL_AUTO_ID.equals(value)) {
+            Settings.System.putInt(getContentResolver(),
+                    Settings.System.DEFAULT_INSTALL_LOCATION, APP_INSTALL_AUTO);
+        } else {
+            // Should not happen, default to prompt...
+            Settings.System.putInt(getContentResolver(),
+                    Settings.System.DEFAULT_INSTALL_LOCATION, APP_INSTALL_AUTO);
+        }
+        mInstallLocation.setValue(value);
+    }
+
     @Override
     protected void onDestroy() {
         super.onDestroy();
@@ -70,7 +119,7 @@ public class ApplicationSettings extends PreferenceActivity implements
                 setNonMarketAppsAllowed(false);
             }
         }
-        
+
         return super.onPreferenceTreeClick(preferenceScreen, preference);
     }
 
@@ -92,6 +141,21 @@ public class ApplicationSettings extends PreferenceActivity implements
                                       Settings.Secure.INSTALL_NON_MARKET_APPS, 0) > 0;
     }
 
+    private String getAppInstallLocation() {
+        int selectedLocation = Settings.System.getInt(getContentResolver(),
+                Settings.System.DEFAULT_INSTALL_LOCATION, APP_INSTALL_AUTO);
+        if (selectedLocation == APP_INSTALL_DEVICE) {
+            return APP_INSTALL_DEVICE_ID;
+        } else if (selectedLocation == APP_INSTALL_SDCARD) {
+            return APP_INSTALL_SDCARD_ID;
+        } else  if (selectedLocation == APP_INSTALL_AUTO) {
+            return APP_INSTALL_AUTO_ID;
+        } else {
+            // Default value, should not happen.
+            return APP_INSTALL_AUTO_ID;
+        }
+    }
+
     private void warnAppInstallation() {
         mWarnInstallApps = new AlertDialog.Builder(this)
                 .setTitle(getString(R.string.error_title))
@@ -101,6 +165,4 @@ public class ApplicationSettings extends PreferenceActivity implements
                 .setNegativeButton(android.R.string.no, null)
                 .show();
     }
-    
-    
 }