diff --git a/lib/hobo/vm.rb b/lib/hobo/vm.rb
index 4e7e1752c..99d34d255 100644
--- a/lib/hobo/vm.rb
+++ b/lib/hobo/vm.rb
@@ -67,14 +67,13 @@ module Hobo
       @vm.save(true)
     end
 
-    # TODO: We need to get the host path.
     def setup_shared_folder
       HOBO_LOGGER.info "Creating shared folders..."
       folder = VirtualBox::SharedFolder.new
-      folder.name = "project-path"
-      folder.hostpath = ""
+      folder.name = "hobo-root-path"
+      folder.hostpath = Env.root_path
       @vm.shared_folders << folder
-      #vm.save(true)
+      @vm.save(true)
     end
   end
 end
\ No newline at end of file
diff --git a/test/hobo/vm_test.rb b/test/hobo/vm_test.rb
index ef15f2c72..995b9eac0 100644
--- a/test/hobo/vm_test.rb
+++ b/test/hobo/vm_test.rb
@@ -116,7 +116,17 @@ class VMTest < Test::Unit::TestCase
     end
 
     context "setting up the shared folder" do
-      # TODO: Since the code actually doesn't do anything yet
+      should "create a shared folder with the root folder for the VM" do
+        shared_folder = mock("shared_folder")
+        shared_folder.stubs(:name=)
+        shared_folder.expects(:hostpath=).with(Hobo::Env.root_path).once
+        shared_folder_collection = mock("collection")
+        shared_folder_collection.expects(:<<).with(shared_folder)
+        VirtualBox::SharedFolder.expects(:new).returns(shared_folder)
+        @mock_vm.expects(:shared_folders).returns(shared_folder_collection)
+        @mock_vm.expects(:save).with(true).once
+        @vm.setup_shared_folder
+      end
     end
   end
 end