diff --git a/OpenSim/Framework/Communications/Cache/CachedUserInfo.cs b/OpenSim/Framework/Communications/Cache/CachedUserInfo.cs
index b98cec76e2..d010bd555a 100644
--- a/OpenSim/Framework/Communications/Cache/CachedUserInfo.cs
+++ b/OpenSim/Framework/Communications/Cache/CachedUserInfo.cs
@@ -379,7 +379,7 @@ namespace OpenSim.Framework.Communications.Cache
                 baseFolder.Type = (short) type;
                 baseFolder.Version = RootFolder.Version;
 
-                m_commsManager.InventoryService.AddFolder(baseFolder);
+                m_commsManager.InventoryService.UpdateFolder(baseFolder);
             }
             else
             {
diff --git a/OpenSim/Framework/Communications/IInventoryServices.cs b/OpenSim/Framework/Communications/IInventoryServices.cs
index f7a885779c..8dc09bc8eb 100644
--- a/OpenSim/Framework/Communications/IInventoryServices.cs
+++ b/OpenSim/Framework/Communications/IInventoryServices.cs
@@ -57,6 +57,13 @@ namespace OpenSim.Framework.Communications
         /// <returns>true if the folder was successfully added</returns>
         bool AddFolder(InventoryFolderBase folder);
 
+        /// <summary>
+        /// Update a folder in the user's inventory
+        /// </summary>
+        /// <param name="folder"></param>
+        /// <returns>true if the folder was successfully updated</returns>
+        bool UpdateFolder(InventoryFolderBase folder);
+
         /// <summary>
         /// Move an inventory folder to a new location
         /// </summary>
diff --git a/OpenSim/Framework/Communications/InventoryServiceBase.cs b/OpenSim/Framework/Communications/InventoryServiceBase.cs
index dffeed3b64..89ccf9360e 100644
--- a/OpenSim/Framework/Communications/InventoryServiceBase.cs
+++ b/OpenSim/Framework/Communications/InventoryServiceBase.cs
@@ -198,6 +198,21 @@ namespace OpenSim.Framework.Communications
             return true;
         }
 
+        // See IInventoryServices
+        public bool UpdateFolder(InventoryFolderBase folder)
+        {
+            m_log.DebugFormat(
+                "[AGENT INVENTORY]: Updating folder {0} {1} to folder {2}", folder.Name, folder.ID, folder.ParentID);
+
+            foreach (KeyValuePair<string, IInventoryData> plugin in m_plugins)
+            {
+                plugin.Value.updateInventoryFolder(folder);
+            }
+
+            // FIXME: Should return false on failure
+            return true;
+        }
+
         // See IInventoryServices
         public bool MoveFolder(InventoryFolderBase folder)
         {
diff --git a/OpenSim/Grid/InventoryServer/Main.cs b/OpenSim/Grid/InventoryServer/Main.cs
index 4300554225..a0688921fe 100644
--- a/OpenSim/Grid/InventoryServer/Main.cs
+++ b/OpenSim/Grid/InventoryServer/Main.cs
@@ -96,6 +96,10 @@ namespace OpenSim.Grid.InventoryServer
                 new RestDeserialisehandler<InventoryFolderBase, bool>(
                     "POST", "/NewFolder/", m_inventoryService.AddFolder));
 
+            m_httpServer.AddStreamHandler(
+                new RestDeserialisehandler<InventoryFolderBase, bool>(
+                    "POST", "/UpdateFolder/", m_inventoryService.UpdateFolder));
+
             m_httpServer.AddStreamHandler(
                 new RestDeserialisehandler<InventoryFolderBase, bool>(
                     "POST", "/MoveFolder/", m_inventoryService.MoveFolder));
diff --git a/OpenSim/Region/Communications/OGS1/OGS1InventoryService.cs b/OpenSim/Region/Communications/OGS1/OGS1InventoryService.cs
index 9b3d8781f3..dfc741aaf6 100644
--- a/OpenSim/Region/Communications/OGS1/OGS1InventoryService.cs
+++ b/OpenSim/Region/Communications/OGS1/OGS1InventoryService.cs
@@ -175,6 +175,26 @@ namespace OpenSim.Region.Communications.OGS1
             return false;
         }
 
+        /// <summary>
+        /// <see cref="OpenSim.Framework.Communications.IInventoryServices"></see>
+        /// </summary>
+        /// <param name="folder"></param>
+        public bool UpdateFolder(InventoryFolderBase folder)
+        {
+            try
+            {
+                return SynchronousRestObjectPoster.BeginPostObject<InventoryFolderBase, bool>(
+                    "POST", _inventoryServerUrl + "/UpdateFolder/", folder);
+            }
+            catch (WebException e)
+            {
+                m_log.ErrorFormat("[OGS1 INVENTORY SERVICE]: Update inventory folder operation failed, {0} {1}",
+                     e.Source, e.Message);
+            }
+
+            return false;
+        }
+
         /// <summary>
         /// <see cref="OpenSim.Framework.Communications.IInventoryServices"></see>
         /// </summary>