diff --git a/src/vs/workbench/common/editor/untitledEditorInput.ts b/src/vs/workbench/common/editor/untitledEditorInput.ts
index 3e7dab7fc96..17392c106b4 100644
--- a/src/vs/workbench/common/editor/untitledEditorInput.ts
+++ b/src/vs/workbench/common/editor/untitledEditorInput.ts
@@ -18,6 +18,7 @@ import { IModeService } from 'vs/editor/common/services/modeService';
 import { IDisposable, dispose } from 'vs/base/common/lifecycle';
 import Event, { Emitter } from 'vs/base/common/event';
 import { ITextFileService } from 'vs/workbench/services/textfile/common/textfiles';
+import { IBackupFileService } from 'vs/workbench/services/backup/common/backup';
 
 /**
  * An editor input to be used for untitled text buffers.
@@ -28,8 +29,8 @@ export class UntitledEditorInput extends AbstractUntitledEditorInput {
 	public static SCHEMA: string = 'untitled';
 
 	private resource: URI;
-	private restoreResource: URI;
 	private hasAssociatedFilePath: boolean;
+	private hasBackupToRestore: boolean;
 	private modeId: string;
 	private cachedModel: UntitledEditorModel;
 
@@ -42,17 +43,18 @@ export class UntitledEditorInput extends AbstractUntitledEditorInput {
 		resource: URI,
 		hasAssociatedFilePath: boolean,
 		modeId: string,
-		restoreResource: URI,
+		hasBackupToRestore: boolean,
 		@IInstantiationService private instantiationService: IInstantiationService,
 		@IWorkspaceContextService private contextService: IWorkspaceContextService,
 		@IModeService private modeService: IModeService,
+		@IBackupFileService private backupFileService: IBackupFileService,
 		@ITextFileService private textFileService: ITextFileService
 	) {
 		super();
 		this.resource = resource;
-		this.restoreResource = restoreResource;
 		this.hasAssociatedFilePath = hasAssociatedFilePath;
 		this.modeId = modeId;
+		this.hasBackupToRestore = hasBackupToRestore;
 		this.toUnbind = [];
 		this._onDidModelChangeContent = new Emitter<void>();
 		this._onDidModelChangeEncoding = new Emitter<void>();
@@ -87,8 +89,8 @@ export class UntitledEditorInput extends AbstractUntitledEditorInput {
 			return this.cachedModel.isDirty();
 		}
 
-		// untitled files with an associated path or restore resource are always dirty
-		return this.hasAssociatedFilePath || !!this.restoreResource;
+		// untitled files with an associated path or associated resource
+		return this.hasAssociatedFilePath || !!this.resource;
 	}
 
 	public confirmSave(): ConfirmResult {
@@ -153,8 +155,12 @@ export class UntitledEditorInput extends AbstractUntitledEditorInput {
 
 		// Otherwise Create Model and load, restoring from backup if necessary
 		let restorePromise: TPromise<string>;
-		if (this.restoreResource) {
-			restorePromise = this.textFileService.resolveTextContent(this.restoreResource).then(rawTextContent => rawTextContent.value.lines.join('\n'));
+		if (this.hasBackupToRestore) {
+			// TODO: Pass in only Untitled-x into the constructor, evaluate whether there is a backup here.
+			const restoreResource = URI.from({ scheme: 'file', path: this.resource.fsPath });
+			restorePromise = this.textFileService.resolveTextContent(restoreResource).then(rawTextContent => rawTextContent.value.lines.join('\n'));
+			this.resource = URI.from({ scheme: UntitledEditorInput.SCHEMA, path: paths.basename(this.resource.fsPath) });
+			this.hasAssociatedFilePath = false;
 		} else {
 			restorePromise = TPromise.as('');
 		}
diff --git a/src/vs/workbench/electron-browser/workbench.ts b/src/vs/workbench/electron-browser/workbench.ts
index f9bbd8e4713..9c5252a8a40 100644
--- a/src/vs/workbench/electron-browser/workbench.ts
+++ b/src/vs/workbench/electron-browser/workbench.ts
@@ -291,7 +291,7 @@ export class Workbench implements IPartService {
 				} else {
 					if (this.workbenchParams.options.untitledToRestore && this.workbenchParams.options.untitledToRestore.length) {
 						const untitledToRestoreInputs = this.workbenchParams.options.untitledToRestore.map(resourceInput => {
-							return this.untitledEditorService.createOrGet(null, null, resourceInput.resource);
+							return this.untitledEditorService.createOrGet(resourceInput.resource, null, true);
 						});
 						editorOpenPromise = this.editorPart.restoreEditors(untitledToRestoreInputs);
 					} else {
diff --git a/src/vs/workbench/services/untitled/common/untitledEditorService.ts b/src/vs/workbench/services/untitled/common/untitledEditorService.ts
index 1a2419a8e0b..946a6efc687 100644
--- a/src/vs/workbench/services/untitled/common/untitledEditorService.ts
+++ b/src/vs/workbench/services/untitled/common/untitledEditorService.ts
@@ -68,7 +68,7 @@ export interface IUntitledEditorService {
 	 * It is valid to pass in a file resource. In that case the path will be used as identifier.
 	 * The use case is to be able to create a new file with a specific path with VSCode.
 	 */
-	createOrGet(resource?: URI, modeId?: string, restoreResource?: URI): UntitledEditorInput;
+	createOrGet(resource?: URI, modeId?: string, hasBackupToRestore?: boolean): UntitledEditorInput;
 
 	/**
 	 * A check to find out if a untitled resource has a file path associated or not.
@@ -154,7 +154,7 @@ export class UntitledEditorService implements IUntitledEditorService {
 			.map((i) => i.getResource());
 	}
 
-	public createOrGet(resource?: URI, modeId?: string, restoreResource?: URI): UntitledEditorInput {
+	public createOrGet(resource?: URI, modeId?: string, hasBackupToRestore?: boolean): UntitledEditorInput {
 		let hasAssociatedFilePath = false;
 		if (resource) {
 			hasAssociatedFilePath = (resource.scheme === 'file');
@@ -171,10 +171,10 @@ export class UntitledEditorService implements IUntitledEditorService {
 		}
 
 		// Create new otherwise
-		return this.doCreate(resource, hasAssociatedFilePath, modeId, restoreResource);
+		return this.doCreate(resource, hasAssociatedFilePath, modeId, hasBackupToRestore);
 	}
 
-	private doCreate(resource?: URI, hasAssociatedFilePath?: boolean, modeId?: string, restoreResource?: URI): UntitledEditorInput {
+	private doCreate(resource?: URI, hasAssociatedFilePath?: boolean, modeId?: string, hasBackupToRestore?: boolean): UntitledEditorInput {
 		if (!resource) {
 
 			// Create new taking a resource URI that is not already taken
@@ -185,7 +185,7 @@ export class UntitledEditorService implements IUntitledEditorService {
 			} while (Object.keys(UntitledEditorService.CACHE).indexOf(resource.toString()) >= 0);
 		}
 
-		const input = this.instantiationService.createInstance(UntitledEditorInput, resource, hasAssociatedFilePath, modeId, restoreResource);
+		const input = this.instantiationService.createInstance(UntitledEditorInput, resource, hasAssociatedFilePath, modeId, hasBackupToRestore);
 		if (input.isDirty()) {
 			setTimeout(() => {
 				this._onDidChangeDirty.fire(resource);