diff --git a/system/libraries/Image_lib.php b/system/libraries/Image_lib.php
index 8902f52..7f90512 100644
--- a/system/libraries/Image_lib.php
+++ b/system/libraries/Image_lib.php
@@ -208,7 +208,7 @@
 		}
 		else
 		{
-			if (strpos($this->new_image, '/') === FALSE)
+			if (strpos($this->new_image, '/') === FALSE AND strpos($this->new_image, '\\') === FALSE)
 			{
 				$this->dest_folder = $this->source_folder;
 				$this->dest_image = $this->new_image;
diff --git a/user_guide/changelog.html b/user_guide/changelog.html
index 272db5f..b8fdcfc 100644
--- a/user_guide/changelog.html
+++ b/user_guide/changelog.html
@@ -73,6 +73,7 @@
 	<li>Fixed a bug (#697) - A wrong array key was used in the Upload library to check for mime-types.</li>
 	<li>Fixed a bug - form_open() compared $action against site_url() instead of base_url()</li>
 	<li>Fixed a bug - CI_Upload::_file_mime_type() could've failed if mime_content_type() is used for the detection and returns FALSE.</li>
+	<li>Fixed a bug (#538) - Windows paths were ignored when using the <a href="libraries/image_lib.html">Image Manipulation Class</a> to create a new file.</li>
 </ul>