diff --git a/main.go b/main.go
index 6929c2f17..7bcd538fd 100644
--- a/main.go
+++ b/main.go
@@ -11,7 +11,8 @@ func parseInput(c *cli.Context) {
 	tls := c.Bool("tls")
 	certFile := c.String("cert")
 	keyFile := c.String("key")
-	server.Start(":8080", tls, certFile, keyFile)
+	inmemory := c.Bool("inmemory")
+	server.Start(":8080", tls, certFile, keyFile, inmemory)
 }
 
 func main() {
@@ -33,6 +34,10 @@ func main() {
 			Value: "",
 			Usage: "key file path",
 		},
+		cli.BoolFlag{
+			Name:  "inmemory",
+			Usage: "in memory storage",
+		},
 	}
 	app.Flags = flags
 	app.Action = parseInput
diff --git a/pkg/server/server.go b/pkg/server/server.go
index 7444f3500..b797f1c27 100644
--- a/pkg/server/server.go
+++ b/pkg/server/server.go
@@ -18,15 +18,19 @@ package server
 
 import (
 	"log"
+	"os"
+	"os/user"
+	"path"
 	"reflect"
 
 	"github.com/minio-io/minio/pkg/httpserver"
 	mstorage "github.com/minio-io/minio/pkg/storage"
+	"github.com/minio-io/minio/pkg/storage/fs"
 	"github.com/minio-io/minio/pkg/storage/inmemory"
 	"github.com/minio-io/minio/pkg/webapi/minioapi"
 )
 
-func Start(hostname string, tls bool, certFile, keyFile string) {
+func Start(hostname string, tls bool, certFile, keyFile string, inMemoryStorage bool) {
 	var ctrlChans []chan<- string
 	var statusChans []<-chan error
 
@@ -44,9 +48,26 @@ func Start(hostname string, tls bool, certFile, keyFile string) {
 		srv.KeyFile = keyFile
 	}
 
-	ctrlChan, statusChan, storage = inmemory.Start()
-	ctrlChans = append(ctrlChans, ctrlChan)
-	statusChans = append(statusChans, statusChan)
+	if inMemoryStorage {
+		ctrlChan, statusChan, storage = inmemory.Start()
+		ctrlChans = append(ctrlChans, ctrlChan)
+		statusChans = append(statusChans, statusChan)
+	} else {
+		currentUser, err := user.Current()
+		if err != nil {
+			log.Fatal(err)
+		}
+		rootPath := path.Join(currentUser.HomeDir, "minio-storage")
+		_, err = os.Stat(rootPath)
+		if os.IsNotExist(err) {
+			err = os.Mkdir(rootPath, 0700)
+		} else if err != nil {
+			log.Fatal("Could not create $HOME/minio-storage", err)
+		}
+		ctrlChan, statusChan, storage = fs.Start(rootPath)
+		ctrlChans = append(ctrlChans, ctrlChan)
+		statusChans = append(statusChans, statusChan)
+	}
 
 	ctrlChan, statusChan = httpserver.Start(minioapi.HttpHandler(storage), srv)
 	ctrlChans = append(ctrlChans, ctrlChan)
diff --git a/pkg/storage/fs/fs.go b/pkg/storage/fs/fs.go
index 3b3af4a8b..1f3eb7ef8 100644
--- a/pkg/storage/fs/fs.go
+++ b/pkg/storage/fs/fs.go
@@ -176,6 +176,13 @@ func (storage *storage) StoreObject(bucket string, key string, data io.Reader) e
 
 	// get object path
 	objectPath := path.Join(storage.root, bucket, key)
+	objectDir := path.Dir(objectPath)
+	if _, err := os.Stat(objectDir); os.IsNotExist(err) {
+		err = os.MkdirAll(objectDir, 0700)
+		if err != nil {
+			return mstorage.EmbedError(bucket, key, err)
+		}
+	}
 
 	// check if object exists
 	if _, err := os.Stat(objectPath); !os.IsNotExist(err) {
diff --git a/pkg/storage/storage_api_suite.go b/pkg/storage/storage_api_suite.go
index b593b80f8..e36cd148b 100644
--- a/pkg/storage/storage_api_suite.go
+++ b/pkg/storage/storage_api_suite.go
@@ -15,6 +15,7 @@ func APITestSuite(c *C, create func() Storage) {
 	testObjectOverwriteFails(c, create)
 	testNonExistantBucketOperations(c, create)
 	testBucketRecreateFails(c, create)
+	testPutObjectInSubdir(c, create)
 }
 
 func testCreateBucket(c *C, create func() Storage) {
@@ -142,3 +143,16 @@ func testBucketRecreateFails(c *C, create func() Storage) {
 	err = storage.StoreBucket("string")
 	c.Assert(err, Not(IsNil))
 }
+
+func testPutObjectInSubdir(c *C, create func() Storage) {
+	storage := create()
+	err := storage.StoreBucket("bucket")
+	c.Assert(err, IsNil)
+	err = storage.StoreObject("bucket", "dir1/dir2/object", bytes.NewBufferString("hello world"))
+	c.Assert(err, IsNil)
+	var bytesBuffer bytes.Buffer
+	length, err := storage.CopyObjectToWriter(&bytesBuffer, "bucket", "dir1/dir2/object")
+	c.Assert(len(bytesBuffer.Bytes()), Equals, len("hello world"))
+	c.Assert(int64(len(bytesBuffer.Bytes())), Equals, length)
+	c.Assert(err, IsNil)
+}