diff --git a/src/transcoder/transcodedialog.cpp b/src/transcoder/transcodedialog.cpp
index d2e11b5e1..fc1cb2edd 100644
--- a/src/transcoder/transcodedialog.cpp
+++ b/src/transcoder/transcodedialog.cpp
@@ -20,6 +20,7 @@
 #include "transcoderoptionsdialog.h"
 #include "ui_transcodedialog.h"
 #include "ui_transcodelogdialog.h"
+#include "ui/iconloader.h"
 #include "ui/mainwindow.h"
 #include "widgets/fileview.h"
 
@@ -35,6 +36,7 @@
 
 const char* TranscodeDialog::kSettingsGroup = "Transcoder";
 const int TranscodeDialog::kProgressInterval = 500;
+const int TranscodeDialog::kMaxDestinationItems = 10;
 
 static bool ComparePresetsByName(const TranscoderPreset& left,
                                  const TranscoderPreset& right) {
@@ -103,6 +105,8 @@ TranscodeDialog::TranscodeDialog(QWidget *parent)
   connect(close_button_, SIGNAL(clicked()), SLOT(hide()));
   connect(ui_->details, SIGNAL(clicked()), log_dialog_, SLOT(show()));
   connect(ui_->options, SIGNAL(clicked()), SLOT(Options()));
+  connect(ui_->select, SIGNAL(clicked()), SLOT(AddDestination()));
+
 
   connect(transcoder_, SIGNAL(JobComplete(QString,bool)), SLOT(JobComplete(QString,bool)));
   connect(transcoder_, SIGNAL(LogLine(QString)), SLOT(LogLine(QString)));
@@ -138,7 +142,8 @@ void TranscodeDialog::Start() {
   // Add jobs to the transcoder
   for (int i=0 ; i<file_model->rowCount() ; ++i) {
     QString filename = file_model->index(i, 0).data(Qt::UserRole).toString();
-    transcoder_->AddJob(filename, preset);
+    QString outfilename = GetOutputFileName(filename, preset);
+    transcoder_->AddJob(filename, preset, outfilename);
   }
 
   // Set up the progressbar
@@ -265,3 +270,50 @@ void TranscodeDialog::Options() {
     dialog.exec();
   }
 }
+
+// Adds a folder to the destination box.
+void TranscodeDialog::AddDestination() {
+  int index = ui_->destination->currentIndex();
+  QString initial_dir = (!ui_->destination->itemData(index).isNull() ?
+                           ui_->destination->itemData(index).toString() :
+                           QDir::homePath());
+  QString dir = QFileDialog::getExistingDirectory(
+      this, tr("Add folder"), initial_dir);
+
+  if (!dir.isEmpty()) {
+    // Keep only a finite number of items in the box.
+    while (ui_->destination->count() >= kMaxDestinationItems) {
+      ui_->destination->removeItem(1); // The oldest folder item.
+    }
+
+    QIcon icon = IconLoader::Load("folder");
+    QVariant data = QVariant::fromValue(dir);
+    // Do not insert duplicates.
+    int duplicate_index = ui_->destination->findData(data);
+    if (duplicate_index == -1) {
+      ui_->destination->addItem(icon, dir, data);
+      ui_->destination->setCurrentIndex(ui_->destination->count() - 1);
+    } else {
+      ui_->destination->setCurrentIndex(duplicate_index);
+    }
+  }
+}
+
+// Returns the rightmost non-empty part of 'path'.
+QString TranscodeDialog::TrimPath(const QString& path) const {
+  return path.section('/', -1, -1, QString::SectionSkipEmpty);
+}
+
+QString TranscodeDialog::GetOutputFileName(const QString& input,
+                                           const TranscoderPreset &preset) const {
+  QString path = ui_->destination->itemData(
+      ui_->destination->currentIndex()).toString();
+  if (path.isEmpty()) {
+    // Keep the original path.
+    return input.section('.', 0, -2) + '.' + preset.extension_;
+  } else {
+    QString file_name = TrimPath(input);
+    file_name = file_name.section('.', 0, -2);
+    return path + '/' + file_name + '.' + preset.extension_;
+  }
+}
diff --git a/src/transcoder/transcodedialog.h b/src/transcoder/transcodedialog.h
index ebf70d204..5be060def 100644
--- a/src/transcoder/transcodedialog.h
+++ b/src/transcoder/transcodedialog.h
@@ -25,6 +25,8 @@ class Transcoder;
 class Ui_TranscodeDialog;
 class Ui_TranscodeLogDialog;
 
+struct TranscoderPreset;
+
 class TranscodeDialog : public QDialog {
   Q_OBJECT
 
@@ -34,6 +36,7 @@ class TranscodeDialog : public QDialog {
 
   static const char* kSettingsGroup;
   static const int kProgressInterval;
+  static const int kMaxDestinationItems;
 
   void SetFilenames(const QStringList& filenames);
 
@@ -49,11 +52,15 @@ class TranscodeDialog : public QDialog {
   void LogLine(const QString& message);
   void AllJobsComplete();
   void Options();
+  void AddDestination();
 
  private:
   void SetWorking(bool working);
   void UpdateStatusText();
   void UpdateProgress();
+  QString TrimPath(const QString& path) const;
+  QString GetOutputFileName(const QString& input,
+                            const TranscoderPreset& preset) const;
 
  private:
   Ui_TranscodeDialog* ui_;
diff --git a/src/transcoder/transcodedialog.ui b/src/transcoder/transcodedialog.ui
index 2a0e6e956..d6daedd05 100644
--- a/src/transcoder/transcodedialog.ui
+++ b/src/transcoder/transcodedialog.ui
@@ -98,7 +98,7 @@
      <property name="title">
       <string>Output options</string>
      </property>
-     <layout class="QFormLayout" name="formLayout">
+     <layout class="QGridLayout" name="gridLayout">
       <item row="0" column="0">
        <widget class="QLabel" name="label">
         <property name="text">
@@ -107,25 +107,21 @@
        </widget>
       </item>
       <item row="0" column="1">
-       <layout class="QHBoxLayout" name="horizontalLayout_3">
-        <item>
-         <widget class="QComboBox" name="format">
-          <property name="sizePolicy">
-           <sizepolicy hsizetype="Expanding" vsizetype="Fixed">
-            <horstretch>0</horstretch>
-            <verstretch>0</verstretch>
-           </sizepolicy>
-          </property>
-         </widget>
-        </item>
-        <item>
-         <widget class="QPushButton" name="options">
-          <property name="text">
-           <string>Options...</string>
-          </property>
-         </widget>
-        </item>
-       </layout>
+       <widget class="QComboBox" name="format">
+        <property name="sizePolicy">
+         <sizepolicy hsizetype="Expanding" vsizetype="Fixed">
+          <horstretch>0</horstretch>
+          <verstretch>0</verstretch>
+         </sizepolicy>
+        </property>
+       </widget>
+      </item>
+      <item row="0" column="2">
+       <widget class="QPushButton" name="options">
+        <property name="text">
+         <string>Options...</string>
+        </property>
+       </widget>
       </item>
       <item row="1" column="0">
        <widget class="QLabel" name="label_2">
@@ -136,6 +132,15 @@
       </item>
       <item row="1" column="1">
        <widget class="QComboBox" name="destination">
+        <property name="enabled">
+         <bool>true</bool>
+        </property>
+        <property name="sizePolicy">
+         <sizepolicy hsizetype="Expanding" vsizetype="Fixed">
+          <horstretch>0</horstretch>
+          <verstretch>0</verstretch>
+         </sizepolicy>
+        </property>
         <item>
          <property name="text">
           <string>Alongside the originals</string>
@@ -143,6 +148,13 @@
         </item>
        </widget>
       </item>
+      <item row="1" column="2">
+       <widget class="QPushButton" name="select">
+        <property name="text">
+         <string>Select...</string>
+        </property>
+       </widget>
+      </item>
      </layout>
     </widget>
    </item>
@@ -196,7 +208,6 @@
   <tabstop>add</tabstop>
   <tabstop>remove</tabstop>
   <tabstop>format</tabstop>
-  <tabstop>destination</tabstop>
   <tabstop>button_box</tabstop>
  </tabstops>
  <resources/>