diff --git a/cli.js b/cli.js
index 8a1a306b6db..99a3b24e0e2 100644
--- a/cli.js
+++ b/cli.js
@@ -38,8 +38,8 @@ function run() {
   // Here goes any cli commands we need to
 }
 
-function init() {
-  spawn('sh', [path.resolve(__dirname, 'init.sh')], {stdio:'inherit'});
+function init(root, projectName) {
+  spawn(path.resolve(__dirname, 'init.sh'), [projectName], {stdio:'inherit'});
 }
 
 module.exports = {
diff --git a/packager/init.sh b/init.sh
similarity index 94%
rename from packager/init.sh
rename to init.sh
index 6a42b9aeb6e..f74850d5724 100755
--- a/packager/init.sh
+++ b/init.sh
@@ -14,7 +14,7 @@ def cp(src, dest, app_name)
 end
 
 def main(dest, app_name)
-  source = File.expand_path("../../Examples/SampleApp", __FILE__)
+  source = File.expand_path("../Examples/SampleApp", __FILE__)
   files = Dir.chdir(source) { Dir["**/*"] }
     .reject { |file| file["project.xcworkspace"] || file["xcuserdata"] }
     .each { |file|
diff --git a/react-native-cli/index.js b/react-native-cli/index.js
index cc69da9d5b2..49ee5001396 100755
--- a/react-native-cli/index.js
+++ b/react-native-cli/index.js
@@ -4,19 +4,22 @@
  * Copyright 2004-present Facebook. All Rights Reserved.
  */
 
-var spawn = require('child_process').spawn;
+var fs = require('fs');
 var path = require('path');
+var spawn = require('child_process').spawn;
 
-var CLI_MODULE_PATH = path.resolve(
-  process.cwd(),
-  'node_modules',
-  'react-native',
-  'cli'
-);
+var CLI_MODULE_PATH = function() {
+  return path.resolve(
+    process.cwd(),
+    'node_modules',
+    'react-native',
+    'cli'
+  );
+};
 
 var cli;
 try {
-  cli = require(CLI_MODULE_PATH);
+  cli = require(CLI_MODULE_PATH());
 } catch(e) {}
 
 if (cli) {
@@ -25,13 +28,20 @@ if (cli) {
   var args = process.argv.slice(2);
   if (args.length === 0) {
     console.error(
-      'You did not pass any commands, did you mean to run init?'
+      'You did not pass any commands, did you mean to run `react-native init`?'
     );
     process.exit(1);
   }
 
   if (args[0] === 'init') {
-    init();
+    if (args[1]) {
+      init(args[1]);
+    } else {
+      console.error(
+        'Usage: react-native init <ProjectName>'
+      );
+      process.exit(1);
+    }
   } else {
     console.error(
       'Command `%s` unrecognized.' +
@@ -42,28 +52,38 @@ if (cli) {
   }
 }
 
-function init() {
+function init(name) {
+  var root = path.resolve(name);
+  var projectName = path.basename(root);
+
   console.log(
-    'This will walk you through creating a new react-native project',
-    'in the current directory'
+    'This will walk you through creating a new React Native project in',
+    root
   );
 
-  console.log('Running npm init');
-  run('npm init', function(e) {
+  if (!fs.existsSync(root)) {
+    fs.mkdirSync(root);
+  }
+
+  var packageJson = {
+    name: projectName,
+    version: '0.0.1',
+    private: true,
+    scripts: {
+      start: "react-native start"
+    }
+  };
+  fs.writeFileSync(path.join(root, 'package.json'), JSON.stringify(packageJson));
+  process.chdir(root);
+
+  run('npm install --save react-native', function(e) {
     if (e) {
-      console.error('npm init failed');
+      console.error('`npm install --save react-native` failed');
       process.exit(1);
     }
 
-    run('npm install --save react-native', function(e) {
-      if (e) {
-        console.error('`npm install --save react-native` failed');
-        process.exit(1);
-      }
-
-      var cli = require(CLI_MODULE_PATH);
-      cli.init();
-    });
+    var cli = require(CLI_MODULE_PATH());
+    cli.init(root, projectName);
   });
 }