diff --git a/system/libraries/Image_lib.php b/system/libraries/Image_lib.php
index 06cdde0..39a30f0 100644
--- a/system/libraries/Image_lib.php
+++ b/system/libraries/Image_lib.php
@@ -544,35 +544,28 @@
 		 */
 		if ($this->new_image === '')
 		{
-			$this->dest_image = $this->source_image;
+			$this->dest_image  = $this->source_image;
 			$this->dest_folder = $this->source_folder;
 		}
-		elseif (strpos($this->new_image, '/') === FALSE)
+		elseif (strpos($this->new_image, '/') === FALSE && strpos($this->new_image, '\\') === FALSE)
 		{
+			$this->dest_image  = $this->new_image;
 			$this->dest_folder = $this->source_folder;
-			$this->dest_image = $this->new_image;
 		}
 		else
 		{
-			if (strpos($this->new_image, '/') === FALSE && strpos($this->new_image, '\\') === FALSE)
-			{
-				$full_dest_path = str_replace('\\', '/', realpath($this->new_image));
-			}
-			else
-			{
-				$full_dest_path = $this->new_image;
-			}
+			$full_dest_path = str_replace('\\', '/', realpath($this->new_image));
 
 			// Is there a file name?
 			if ( ! preg_match('#\.(jpg|jpeg|gif|png)$#i', $full_dest_path))
 			{
+				$this->dest_image  = $this->source_image;
 				$this->dest_folder = $full_dest_path.'/';
-				$this->dest_image = $this->source_image;
 			}
 			else
 			{
 				$x = explode('/', $full_dest_path);
-				$this->dest_image = end($x);
+				$this->dest_image  = end($x);
 				$this->dest_folder = str_replace($this->dest_image, '', $full_dest_path);
 			}
 		}
diff --git a/user_guide_src/source/changelog.rst b/user_guide_src/source/changelog.rst
index 1ce3f07..2509c82 100644
--- a/user_guide_src/source/changelog.rst
+++ b/user_guide_src/source/changelog.rst
@@ -26,6 +26,7 @@
 -  Fixed a bug (#4927) - :doc:`Output Library <libraries/output>` method ``get_header()`` returned the first matching header, regardless of whether it would be replaced by a second ``set_header()`` call.
 -  Fixed a bug (#4844) - :doc:`Email Library <libraries/email>` didn't apply ``escapeshellarg()`` to the while passing the Sendmail ``-f`` parameter through ``popen()``.
 -  Fixed a bug (#4928) - the bootstrap file didn't check if *config/constants.php* exists before trying to load it.
+-  Fixed a bug (#4937) - :doc:`Image Manipulation Library <libraries/image_lib>` method ``initialize()`` didn't translate *new_image* inputs to absolute paths.
 
 Version 3.1.2
 =============