diff --git a/commands/pm/pm.drush.inc b/commands/pm/pm.drush.inc
index fd2346e603606b22bbc540b4f6430b58e086fa13..bf289a9a8b986285a37d958e2ab6ad5f9f5a6c2c 100644
--- a/commands/pm/pm.drush.inc
+++ b/commands/pm/pm.drush.inc
@@ -97,7 +97,6 @@ function pm_drush_command() {
   );
   $update_options = array(
     '--lock' => 'Add a persistent lock to remove the specified projects from consideration during updates.  Locks may be removed with the --unlock parameter, or overridden by specifically naming the module as a parameter to pm-update or pm-updatecode.  The lock does not affect pm-download.',
-    '--backup-dir' => 'Specify a directory to backup packages into, defaults to a backup directory within your Drupal root.',
   );
   $update_suboptions = array(
     '--lock' => array(
@@ -954,6 +953,16 @@ function drush_pm_post_pm_update() {
   drush_backend_invoke('updatedb');
 }
 
+/**
+ * Validate callback for updatecode command. Abort if 'backup' folder exists.
+ */
+function drush_pm_updatecode_validate() {
+  $drupal_root = drush_get_context('DRUSH_DRUPAL_ROOT');
+  if (is_dir($drupal_root . DIRECTORY_SEPARATOR . 'backup')) {
+    return drush_set_error('DRUSH_PM_BACKUP_DIR_FORBIDDEN', dt('It\'s a security risk to have a backup folder in your Drupal root. You must move it elsewhere before proceeding.'));
+  }
+}
+
 /**
  * Post-command callback for updatecode. Notify about any pending DB updates.
  */
@@ -1197,6 +1206,16 @@ function pm_drush_engine_package_handler() {
  */
 function pm_drush_engine_version_control() {
   return array(
+    'backup' => array(
+      'options' => array(
+        '--version-control=backup' => 'Default engine. Backup all project files before updates.',
+      ),
+      'sub-options' => array(
+        '--version-control=backup' => array(
+          '--backup-dir' => 'Specify a directory to backup packages into. Defaults to .drush-backups within the home directory of the user running the command. It is forbidden to specify a directory inside your drupal root.',
+        ),
+      ),
+    ),
     'svn' => array(
       'signature' => 'svn info %s',
       'options' => array(
@@ -1218,16 +1237,6 @@ function pm_drush_engine_version_control() {
         'drush [command] cck --svncommitparams=\"--username joe\"' =>  'Commit changes as the user \'joe\' (Quotes are required).'
       ),
     ),
-    'backup' => array(
-      'options' => array(
-        '--version-control=backup' => 'Backup all project files before updates.',
-      ),
-      'sub-options' => array(
-        '--version-control=backup' => array(
-          '--backup-dir' => 'Backup destination directory. Defaults to a "/backup" subdirectory inside your Drupal root.',
-        ),
-      ),
-    ),
     'bzr' => array(
       'signature' => 'bzr root %s',
       'options' => array(
diff --git a/commands/pm/version_control/backup.inc b/commands/pm/version_control/backup.inc
index db7f4a33a31586f03af9a37a6ba4174899c7245e..02b2e4a5ece889c0e2ac71855a8da0b69d481b20 100644
--- a/commands/pm/version_control/backup.inc
+++ b/commands/pm/version_control/backup.inc
@@ -16,14 +16,15 @@ class drush_pm_version_control_backup implements drush_pm_version_control {
     // Save the date to be used in the backup directory's path name.
     $date = date('YmdHis', $_SERVER['REQUEST_TIME']);
 
-    $backup_dir = drush_get_option('backup-dir', $drupal_root  . '/backup');
-    $backup_dir = rtrim($backup_dir, '/');
-    @drush_op('mkdir', $backup_dir, 0777);
-    $backup_dir .= '/modules';
-    @drush_op('mkdir', $backup_dir, 0777);
-    $backup_dir .= "/$date";
-    @drush_op('mkdir', $backup_dir, 0777);
-    $backup_target = $backup_dir . '/'. $project['name'];
+    $backup_dir = drush_get_option('backup-dir', $_SERVER['HOME'] . DIRECTORY_SEPARATOR . '.drush-backups');
+    if (strpos($backup_dir, $drupal_root) === 0) {
+      return drush_set_error('DRUSH_PM_BACKUP_FAILED', dt('It\'s not allowed to store backups inside the Drupal root directory.'));
+    }
+    $backup_dir = rtrim($backup_dir, DIRECTORY_SEPARATOR);
+    $backup_dir .= DIRECTORY_SEPARATOR . $date . DIRECTORY_SEPARATOR . 'modules'; 
+    drush_mkdir($backup_dir);
+
+    $backup_target = $backup_dir . DIRECTORY_SEPARATOR . $project['name'];
     // Save for rollback or notifications.
     $project['backup_target'] = $backup_target;
     if (!drush_op('rename', $project['full_project_path'], $backup_target)) {