diff --git a/collects/drracket/private/expanding-place.rkt b/collects/drracket/private/expanding-place.rkt
index 3bd7682951..729a857a02 100644
--- a/collects/drracket/private/expanding-place.rkt
+++ b/collects/drracket/private/expanding-place.rkt
@@ -90,8 +90,8 @@
                                          #:use-use-current-security-guard? #t)
          (log-info "expanding-place.rkt: 04 setting directories")
          (let ([init-dir (get-init-dir path)])
-           (current-directory init-dir)
-           (current-load-relative-directory init-dir))
+           (current-directory init-dir))
+         (current-load-relative-directory #f)
          (define sp (open-input-string program-as-string))
          (port-count-lines! sp)
          (log-info "expanding-place.rkt: 05 installing security guard")
diff --git a/collects/drracket/private/interface.rkt b/collects/drracket/private/interface.rkt
index c070e4db60..812b1ba166 100644
--- a/collects/drracket/private/interface.rkt
+++ b/collects/drracket/private/interface.rkt
@@ -105,8 +105,7 @@ remain the same for tools that use them.
     
     get-directory      ;; (-> (union #f string[existing directory]))
     ;; returns the directory that should be the default for
-    ;; the `current-directory' and `current-load-relative-directory'
-    ;; parameters in the repl.
+    ;; the `current-directory' parameter in the repl.
     ))
 
 (define unit:tab<%>
diff --git a/collects/drracket/private/module-browser.rkt b/collects/drracket/private/module-browser.rkt
index 962eef5ca4..25a8463bf5 100644
--- a/collects/drracket/private/module-browser.rkt
+++ b/collects/drracket/private/module-browser.rkt
@@ -876,7 +876,7 @@
                p))))
       (current-output-port (swallow-specials original-output-port))
       (current-error-port (swallow-specials original-error-port))
-      (current-load-relative-directory init-dir)
+      (current-load-relative-directory #f)
       (current-directory init-dir)
       (error-display-handler (λ (str exn) (set! error-str str)))
       
@@ -1041,7 +1041,9 @@
                    (build-module-filename
                     (if (regexp-match #rx"^," name)
                         (substring name 1 (string-length name))
-                        (build-path (current-load-relative-directory) name)))])
+                        (build-path (or (current-load-relative-directory) 
+                                        (current-directory))
+                                    name)))])
              (add-module-code-connections base module-code))))
        module-codes)))
   
diff --git a/collects/drracket/private/syncheck/gui.rkt b/collects/drracket/private/syncheck/gui.rkt
index 6e57c51e3d..45f84ed7cb 100644
--- a/collects/drracket/private/syncheck/gui.rkt
+++ b/collects/drracket/private/syncheck/gui.rkt
@@ -1867,6 +1867,7 @@ If the namespace does not, they are colored the unbound color.
               (λ () ; =user=
                 (send the-tab set-breakables (current-thread) (current-custodian))
                 (set-directory definitions-text)
+                (current-load-relative-directory #f)
                 (current-error-port error-port)
                 (current-output-port output-port)
                 (error-display-handler 
@@ -2016,14 +2017,12 @@ If the namespace does not, they are colored the unbound color.
 
         
         ;; set-directory : text -> void
-        ;; sets the current-directory and current-load-relative-directory
-        ;; based on the file saved in the definitions-text
+        ;; sets the current-directory based on the file saved in the definitions-text
         (define/private (set-directory definitions-text)
           (define tmp-b (box #f))
           (define fn (send definitions-text get-filename tmp-b))
           (define dir (get-init-dir (and (not (unbox tmp-b)) fn)))
-          (current-directory dir)
-          (current-load-relative-directory dir))
+          (current-directory dir))
         
         ;; with-lock/edit-sequence : text (-> void) -> void
         ;; sets and restores some state of the definitions text
diff --git a/collects/drracket/private/unit.rkt b/collects/drracket/private/unit.rkt
index b1a3fb95bc..9343234e9a 100644
--- a/collects/drracket/private/unit.rkt
+++ b/collects/drracket/private/unit.rkt
@@ -3365,16 +3365,6 @@ module browser threading seems wrong.
             (send module-browser-name-length-choice enable #t)
             (close-status-line 'plt:module-browser))))
       
-      ;; set-directory : text -> void
-      ;; sets the current-directory and current-load-relative-directory
-      ;; based on the file saved in the definitions-text
-      (define/private (set-directory definitions-text)
-        (define tmp-b (box #f))
-        (define fn (send definitions-text get-filename tmp-b))
-        (define dir (get-init-dir (and (not (unbox tmp-b)) fn)))
-        (current-directory dir)
-        (current-load-relative-directory dir))
-      
       
       ;                                            
       ;                                            
diff --git a/doc/release-notes/drracket/HISTORY.txt b/doc/release-notes/drracket/HISTORY.txt
index 2cdba53592..3667e2522c 100644
--- a/doc/release-notes/drracket/HISTORY.txt
+++ b/doc/release-notes/drracket/HISTORY.txt
@@ -2,10 +2,12 @@
        Version 5.2.1
 ------------------------------
 
-  . The initial current-directory and current-load-relative-directory
-    for unsaved programs in DrRacket is now the user's home directory,
-    instead of whatever the current-directory was for the underlying
-    OS process.
+  . The initial current-directory for unsaved programs in DrRacket is
+    now the user's home directory, instead of whatever the
+    current-directory was for the underlying OS process.
+
+  . The current-load-relative-directory is now set to #f initially in
+    DrRacket (to better match what Racket does).
 
   . DrRacket no longer shows a stacktrace for syntax errors in the REPL.