diff --git a/README.md b/README.md
index 70c410eb..5fc38334 100644
--- a/README.md
+++ b/README.md
@@ -50,18 +50,18 @@ You should now have GitLab ready for testing. If you want to use GitLab for more
 ### Mounting volumes
 GitLab is a code hosting software and as such you don't want to lose your code when the docker container is stopped/deleted. To avoid losing any data, you should mount volumes at.
 
-* /home/git/repositories
+* /home/git/data
 * /home/git/gitlab-satellites
 * /home/git/.ssh
 
 Volumes can be mounted in docker by specifying the **'-v'** option in the docker run command.
 
 ```bash
-mkdir /opt/gitlab/repositories
+mkdir /opt/gitlab/data
 mkdir /opt/gitlab/gitlab-satellites
 mkdir /opt/gitlab/.ssh
 docker run -d \
-  -v /opt/gitlab/repositories:/home/git/repositories \
+  -v /opt/gitlab/data:/home/git/data \
   -v /opt/gitlab/gitlab-satellites:/home/git/gitlab-satellites \
   -v /opt/gitlab/.ssh:/home/git/.ssh sameersbn/gitlab
 ```
@@ -75,7 +75,7 @@ This docker image is configured to use a MySQL database backend. The database co
 ```bash
 mkdir /opt/gitlab/mysql
 docker run -d \
-  -v /opt/gitlab/repositories:/home/git/repositories \
+  -v /opt/gitlab/data:/home/git/data \
   -v /opt/gitlab/gitlab-satellites:/home/git/gitlab-satellites \
   -v /opt/gitlab/.ssh:/home/git/.ssh \
   -v /opt/gitlab/mysql:/var/lib/mysql sameersbn/gitlab
@@ -104,7 +104,7 @@ To make sure the database is initialized start the container with **app:db:initi
 ```bash
 docker run -d \
   -e "DB_HOST=192.168.1.100" -e "DB_NAME=gitlabhq_production" -e "DB_USER=gitlab" -e "DB_PASS=password" \
-  -v /opt/gitlab/repositories:/home/git/repositories \
+  -v /opt/gitlab/data:/home/git/data \
   -v /opt/gitlab/gitlab-satellites:/home/git/gitlab-satellites \
   -v /opt/gitlab/.ssh:/home/git/.ssh sameersbn/gitlab app:db:initialize
 ```
@@ -114,7 +114,7 @@ This will initialize the gitlab database. Now that the database is initialized,
 ```bash
 docker run -d \
   -e "DB_HOST=192.168.1.100" -e "DB_NAME=gitlabhq_production" -e "DB_USER=gitlab" -e "DB_PASS=password" \
-  -v /opt/gitlab/repositories:/home/git/repositories \
+  -v /opt/gitlab/data:/home/git/data \
   -v /opt/gitlab/gitlab-satellites:/home/git/gitlab-satellites \
   -v /opt/gitlab/.ssh:/home/git/.ssh sameersbn/gitlab
 ```
@@ -132,7 +132,7 @@ The following environment variables need to be specified to get mail support to
 ```bash
 docker run -d \
   -e "SMTP_USER=USER@gmail.com" -e "SMTP_PASS=PASSWORD" \
-  -v /opt/gitlab/repositories:/home/git/repositories \
+  -v /opt/gitlab/data:/home/git/data \
   -v /opt/gitlab/gitlab-satellites:/home/git/gitlab-satellites \
   -v /opt/gitlab/.ssh:/home/git/.ssh sameersbn/gitlab
 ```
@@ -147,7 +147,7 @@ I have only tested standard gmail and google apps login. I expect that the curre
 
 ```bash
 docker run -d -h git.local.host \
-  -v /opt/gitlab/repositories:/home/git/repositories \
+  -v /opt/gitlab/data:/home/git/data \
   -v /opt/gitlab/gitlab-satellites:/home/git/gitlab-satellites \
   -v /opt/gitlab/.ssh:/home/git/.ssh \
   -v /opt/gitlab/mysql:/var/lib/mysql \
@@ -160,7 +160,7 @@ If you are using an external mysql database
 
 ```bash
 docker run -d -h git.local.host \
-  -v /opt/gitlab/repositories:/home/git/repositories \
+  -v /opt/gitlab/data:/home/git/data \
   -v /opt/gitlab/gitlab-satellites:/home/git/gitlab-satellites \
   -v /opt/gitlab/.ssh:/home/git/.ssh \
   -e "DB_HOST=192.168.1.100" -e "DB_NAME=gitlabhq_production" -e "DB_USER=gitlab" -e "DB_PASS=password" \
@@ -185,7 +185,7 @@ For backups we mount a volume at /home/git/gitlab/tmp/backups so the backups are
 mkdir -p /opt/gitlab/backups
 docker run -i -t -h git.local.host \
   -v /opt/gitlab/backups:/home/git/gitlab/tmp/backups \
-  -v /opt/gitlab/repositories:/home/git/repositories \
+  -v /opt/gitlab/data:/home/git/data \
   -v /opt/gitlab/gitlab-satellites:/home/git/gitlab-satellites \
   -v /opt/gitlab/.ssh:/home/git/.ssh \
   sameersbn/gitlab app:backup
diff --git a/resources/gitlab b/resources/gitlab
index 4edf1c1d..ae994dba 100755
--- a/resources/gitlab
+++ b/resources/gitlab
@@ -149,11 +149,15 @@ sed 's/worker_processes 2/worker_processes '${UNICORN_WORKERS}'/' -i /home/git/g
 # configure unicorn timeout
 sed 's/timeout 30/timeout '${UNICORN_TIMEOUT}'/' -i /home/git/gitlab/config/unicorn.rb
 
-# make sure /home/git/repositories/ has the right permissions in case it is mounted as a volume.
-sudo chmod ug+rwX,o-rwx /home/git/repositories/
-sudo chmod ug-s /home/git/repositories/
-find /home/git/repositories/ -type d -print0 | sudo xargs -0 chmod g+s
-chown git:git /home/git/repositories
+# take ownership of /home/git/data
+chown git:git /home/git/data
+
+# create the repositories directory and make sure it has the right permissions
+sudo -u git -H mkdir -p /home/git/data/repositories/
+sudo chmod ug+rwX,o-rwx /home/git/data/repositories/
+sudo chmod ug-s /home/git/data/repositories/
+find /home/git/data/repositories/ -type d -print0 | sudo xargs -0 chmod g+s
+chown git:git /home/git/data/repositories
 
 # make sure /home/git/gitlab-satellites/ has the right permissions in case it is mounted as a volume.
 sudo chmod ug+rwX,o-rwx /home/git/gitlab-satellites/
diff --git a/resources/setup/install b/resources/setup/install
index 7fdbd82b..30e2428c 100755
--- a/resources/setup/install
+++ b/resources/setup/install
@@ -6,6 +6,9 @@
 # add git user
 adduser --disabled-login --gecos 'GitLab' git
 
+# create the data store
+sudo -u git -H mkdir -p /home/git/data
+
 # install gitlab-shell
 sudo -u git -H mkdir -p /home/git/gitlab-shell
 wget "https://github.com/gitlabhq/gitlab-shell/archive/v1.8.0.tar.gz" -O - | tar -zvxf - --strip=1 -C /home/git/gitlab-shell/
@@ -13,6 +16,7 @@ chown -R git:git /home/git/gitlab-shell/
 
 cd /home/git/gitlab-shell
 sudo -u git -H cp -a config.yml.example config.yml
+sudo -u git -H sed 's/repos_path: "\/home\/git\/repositories"/repos_path: "\/home\/git\/data\/repositories"/' -i config.yml
 sudo -u git -H ./bin/install
 
 # install gitlab
@@ -28,6 +32,9 @@ sudo -u git -H cp config/resque.yml.example config/resque.yml
 sudo -u git -H cp config/unicorn.rb.example config/unicorn.rb
 sudo -u git -H cp config/initializers/rack_attack.rb.example config/initializers/rack_attack.rb
 
+# configure repositories path
+sudo -u git -H sed 's/repos_path: \/home\/git\/repositories\//repos_path: \/home\/git\/data\/repositories\//' -i config/gitlab.yml
+
 # create required tmp and log directories
 sudo -u git -H mkdir -p tmp/pids/ tmp/sockets/
 chmod -R u+rwX log tmp