diff --git a/v2/engine/build.bat b/v2/engine/build.bat
index 2f4984bb6..36e818a53 100644
--- a/v2/engine/build.bat
+++ b/v2/engine/build.bat
@@ -470,8 +470,8 @@ set BJAM_SOURCES=%BJAM_SOURCES% jambase.c jamgram.c lists.c make.c make1.c
 set BJAM_SOURCES=%BJAM_SOURCES% object.c option.c output.c parse.c pathnt.c
 set BJAM_SOURCES=%BJAM_SOURCES% pathsys.c regexp.c rules.c scan.c search.c
 set BJAM_SOURCES=%BJAM_SOURCES% subst.c timestamp.c variable.c modules.c
-set BJAM_SOURCES=%BJAM_SOURCES% strings.c filesys.c builtins.c md5.c pwd.c
-set BJAM_SOURCES=%BJAM_SOURCES% class.c w32_getreg.c native.c modules/set.c
+set BJAM_SOURCES=%BJAM_SOURCES% strings.c filesys.c builtins.c md5.c class.c
+set BJAM_SOURCES=%BJAM_SOURCES% cwd.c w32_getreg.c native.c modules/set.c
 set BJAM_SOURCES=%BJAM_SOURCES% modules/path.c modules/regex.c
 set BJAM_SOURCES=%BJAM_SOURCES% modules/property-set.c modules/sequence.c
 set BJAM_SOURCES=%BJAM_SOURCES% modules/order.c
diff --git a/v2/engine/build.jam b/v2/engine/build.jam
index be7a3e4e7..119e2097e 100644
--- a/v2/engine/build.jam
+++ b/v2/engine/build.jam
@@ -482,7 +482,7 @@ jam.source =
     hash.c hcache.c headers.c hdrmacro.c jam.c jambase.c jamgram.c lists.c
     make.c make1.c mem.c object.c option.c output.c parse.c pathsys.c regexp.c
     rules.c scan.c search.c subst.c w32_getreg.c timestamp.c variable.c
-    modules.c strings.c filesys.c builtins.c pwd.c class.c native.c md5.c
+    modules.c strings.c filesys.c builtins.c class.c cwd.c native.c md5.c
     modules/set.c modules/path.c modules/regex.c modules/property-set.c
     modules/sequence.c modules/order.c ;
 if $(OS) = NT
diff --git a/v2/engine/build.sh b/v2/engine/build.sh
index cc4eea959..5f78a5631 100755
--- a/v2/engine/build.sh
+++ b/v2/engine/build.sh
@@ -249,7 +249,7 @@ BJAM_SOURCES="\
  hash.c hdrmacro.c headers.c jam.c jambase.c jamgram.c lists.c make.c make1.c\
  object.c option.c output.c parse.c pathsys.c pathunix.c regexp.c rules.c\
  scan.c search.c subst.c timestamp.c variable.c modules.c strings.c filesys.c\
- builtins.c pwd.c class.c native.c md5.c w32_getreg.c modules/set.c\
+ builtins.c class.c cwd.c native.c md5.c w32_getreg.c modules/set.c\
  modules/path.c modules/regex.c modules/property-set.c modules/sequence.c\
  modules/order.c"
 case $BOOST_JAM_TOOLSET in
diff --git a/v2/engine/builtins.c b/v2/engine/builtins.c
index a4bcc62b0..dec2ef77e 100644
--- a/v2/engine/builtins.c
+++ b/v2/engine/builtins.c
@@ -9,6 +9,7 @@
 
 #include "compile.h"
 #include "constants.h"
+#include "cwd.h"
 #include "filesys.h"
 #include "frames.h"
 #include "hash.h"
@@ -20,7 +21,6 @@
 #include "object.h"
 #include "parse.h"
 #include "pathsys.h"
-#include "pwd.h"
 #include "rules.h"
 #include "strings.h"
 #include "subst.h"
@@ -1371,7 +1371,7 @@ LIST * builtin_caller_module( FRAME * frame, int flags )
 
 LIST * builtin_pwd( FRAME * frame, int flags )
 {
-    return pwd();
+    return list_new( object_copy( cwd() ) );
 }
 
 
diff --git a/v2/engine/cwd.c b/v2/engine/cwd.c
new file mode 100644
index 000000000..7ebe97045
--- /dev/null
+++ b/v2/engine/cwd.c
@@ -0,0 +1,83 @@
+/*
+ * Copyright 2002. Vladimir Prus
+ * Copyright 2005. Rene Rivera
+ * Distributed under the Boost Software License, Version 1.0.
+ * (See accompanying file LICENSE_1_0.txt or copy at
+ * http://www.boost.org/LICENSE_1_0.txt)
+ */
+
+#include "cwd.h"
+
+#include "jam.h"
+#include "mem.h"
+#include "pathsys.h"
+
+#include <assert.h>
+#include <errno.h>
+#include <limits.h>
+
+/* MinGW on Windows declares PATH_MAX in limits.h */
+#if defined( NT ) && !defined( __GNUC__ )
+# include <direct.h>
+# define PATH_MAX _MAX_PATH
+#else
+# include <unistd.h>
+# if defined( __COMO__ )
+#  include <linux/limits.h>
+# endif
+#endif
+
+#ifndef PATH_MAX
+# define PATH_MAX 1024
+#endif
+
+
+static OBJECT * cwd_;
+
+
+void cwd_init( void )
+{
+    int buffer_size = PATH_MAX;
+    char * cwd_buffer = 0;
+    int error;
+
+    assert( !cwd_ );
+
+    do
+    {
+        char * const buffer = BJAM_MALLOC_RAW( buffer_size );
+        cwd_buffer = getcwd( buffer, buffer_size );
+        error = errno;
+        if ( cwd_buffer )
+        {
+            /* We store the path using its canonical/long/key format. */
+            OBJECT * const cwd = object_new( cwd_buffer );
+            cwd_ = path_as_key( cwd );
+            object_free( cwd );
+        }
+        buffer_size *= 2;
+        BJAM_FREE_RAW( buffer );
+    }
+    while ( !cwd_ && error == ERANGE );
+
+    if ( !cwd_ )
+    {
+        perror( "can not get current working directory" );
+        exit( EXITBAD );
+    }
+}
+
+
+OBJECT * cwd( void )
+{
+    assert( cwd_ );
+    return cwd_;
+}
+
+
+void cwd_done( void )
+{
+    assert( cwd_ );
+    object_free( cwd_ );
+    cwd_ = NULL;
+}
diff --git a/v2/engine/cwd.h b/v2/engine/cwd.h
new file mode 100644
index 000000000..886714a8f
--- /dev/null
+++ b/v2/engine/cwd.h
@@ -0,0 +1,35 @@
+/*
+ * Copyright 2002. Vladimir Prus
+ * Distributed under the Boost Software License, Version 1.0.
+ * (See accompanying file LICENSE_1_0.txt or copy at
+ * http://www.boost.org/LICENSE_1_0.txt)
+ */
+
+/*
+ * cwd.h - manages the current working folder information
+ */
+
+#ifndef CWD_H
+#define CWD_H
+
+#include "object.h"
+
+
+/* cwd() - returns the current working folder */
+OBJECT * cwd( void );
+
+/* cwd_init() - initialize the cwd module functionality
+ *
+ *   The current working folder can not change in Boost Jam so this function
+ * gets the current working folder information from the OS and stores it
+ * internally.
+ *
+ *   Expected to be called at program startup before the program's current
+ * working folder has been changed
+ */
+void cwd_init( void );
+
+/* cwd_done() - cleans up the cwd module functionality */
+void cwd_done( void );
+
+#endif
diff --git a/v2/engine/jam.c b/v2/engine/jam.c
index 5a73329f3..d633dfd96 100644
--- a/v2/engine/jam.c
+++ b/v2/engine/jam.c
@@ -113,7 +113,7 @@
 #include "option.h"
 #include "output.h"
 #include "parse.h"
-#include "pwd.h"
+#include "cwd.h"
 #include "rules.h"
 #include "scan.h"
 #include "search.h"
@@ -345,6 +345,7 @@ int main( int argc, char * * argv, char * * arg_environ )
     }
 
     constants_init();
+    cwd_init();
 
     {
         PROFILE_ENTER( MAIN );
@@ -579,7 +580,7 @@ int main( int argc, char * * argv, char * * arg_environ )
     class_done();
     modules_done();
     regex_done();
-    pwd_done();
+    cwd_done();
     path_done();
     function_done();
     list_done();
diff --git a/v2/engine/pwd.c b/v2/engine/pwd.c
deleted file mode 100644
index 440fb17d5..000000000
--- a/v2/engine/pwd.c
+++ /dev/null
@@ -1,80 +0,0 @@
-/*
- * Copyright 2002. Vladimir Prus
- * Copyright 2005. Rene Rivera
- * Distributed under the Boost Software License, Version 1.0.
- * (See accompanying file LICENSE_1_0.txt or copy at
- * http://www.boost.org/LICENSE_1_0.txt)
- */
-
-#include "jam.h"
-#include "pwd.h"
-
-#include "mem.h"
-#include "object.h"
-#include "pathsys.h"
-
-#include <errno.h>
-#include <limits.h>
-
-/* MinGW on Windows declares PATH_MAX in limits.h */
-#if defined(NT) && !defined(__GNUC__)
-# include <direct.h>
-# define PATH_MAX _MAX_PATH
-#else
-# include <unistd.h>
-# if defined(__COMO__)
-#  include <linux/limits.h>
-# endif
-#endif
-
-#ifndef PATH_MAX
-# define PATH_MAX 1024
-#endif
-
-/* The current directory can not change in Boost Jam, so optimize pwd() by
- * caching the result.
-*/
-static OBJECT * pwd_result;
-
-
-LIST * pwd( void )
-{
-    if ( !pwd_result )
-    {
-        int buffer_size = PATH_MAX;
-        char * result_buffer = 0;
-        int error;
-        do
-        {
-            char * const buffer = BJAM_MALLOC_RAW( buffer_size );
-            result_buffer = getcwd( buffer, buffer_size );
-            error = errno;
-            if ( result_buffer )
-            {
-                /* We return the path using its canonical/long/key format. */
-                OBJECT * const result = object_new( result_buffer );
-                pwd_result = path_as_key( result );
-                object_free( result );
-            }
-            buffer_size *= 2;
-            BJAM_FREE_RAW( buffer );
-        }
-        while ( !pwd_result && error == ERANGE );
-
-        if ( !pwd_result )
-        {
-            perror( "can not get current directory" );
-            return L0;
-        }
-    }
-    return list_new( object_copy( pwd_result ) );
-}
-
-
-void pwd_done( void )
-{
-    if ( pwd_result )
-    {
-        object_free( pwd_result );
-    }
-}
diff --git a/v2/engine/pwd.h b/v2/engine/pwd.h
deleted file mode 100644
index 0e0d6fba7..000000000
--- a/v2/engine/pwd.h
+++ /dev/null
@@ -1,16 +0,0 @@
-/*
- * Copyright 2002. Vladimir Prus
- * Distributed under the Boost Software License, Version 1.0.
- * (See accompanying file LICENSE_1_0.txt or copy at
- * http://www.boost.org/LICENSE_1_0.txt)
- */
-
-#ifndef PWD_H
-#define PWD_H
-
-#include "lists.h"
-
-LIST * pwd( void );
-void pwd_done( void );
-
-#endif