diff --git a/extensions/sql-database-projects/src/common/constants.ts b/extensions/sql-database-projects/src/common/constants.ts
index 599dcf3116..a706d7dcdd 100644
--- a/extensions/sql-database-projects/src/common/constants.ts
+++ b/extensions/sql-database-projects/src/common/constants.ts
@@ -433,6 +433,7 @@ export function generatingProjectFailed(errorMessage: string) { return localize(
 export const noSqlFilesGenerated = localize('noSqlFilesGenerated', "No .sql files were generated by Autorest. Please confirm that your spec contains model definitions, or check the output log for details.");
 export function multipleMostDeploymentScripts(count: number) { return localize('multipleMostDeploymentScripts', "Unexpected number of {0} files: {1}", autorestPostDeploymentScriptName, count); }
 export const specSelectionText = localize('specSelectionText', "OpenAPI/Swagger spec");
+export const autorestProjectName = localize('autorestProjectName', "New SQL project name");
 export function generatingProjectFromAutorest(specName: string) { return localize('generatingProjectFromAutorest', "Generating new SQL project from {0}...  Check output window for details.", specName); }
 
 // System dbs
diff --git a/extensions/sql-database-projects/src/common/utils.ts b/extensions/sql-database-projects/src/common/utils.ts
index 20e453d79f..fbb38a1b39 100644
--- a/extensions/sql-database-projects/src/common/utils.ts
+++ b/extensions/sql-database-projects/src/common/utils.ts
@@ -544,8 +544,8 @@ export function validateSqlServerPortNumber(port: string | undefined): boolean {
 	return !isNaN(valueAsNum) && valueAsNum > 0 && valueAsNum < 65535;
 }
 
-export function isEmptyString(password: string | undefined): boolean {
-	return password === undefined || password === '';
+export function isEmptyString(input: string | undefined): boolean {
+	return input === undefined || input === '';
 }
 
 export function isValidSQLPassword(password: string, userName: string = 'sa'): boolean {
diff --git a/extensions/sql-database-projects/src/controllers/projectController.ts b/extensions/sql-database-projects/src/controllers/projectController.ts
index 6300933a32..cefcad7b73 100644
--- a/extensions/sql-database-projects/src/controllers/projectController.ts
+++ b/extensions/sql-database-projects/src/controllers/projectController.ts
@@ -864,11 +864,10 @@ export class ProjectsController {
 	 * 			outputFolder: 'C:\Source',
 	 * 			projectName: 'MyProject'}
 	 */
-	public async selectAutorestProjectLocation(specPath: string): Promise<{ newProjectFolder: string, outputFolder: string, projectName: string } | undefined> {
+	public async selectAutorestProjectLocation(projectName: string): Promise<{ newProjectFolder: string, outputFolder: string, projectName: string } | undefined> {
 		let valid = false;
 		let newProjectFolder: string = '';
 		let outputFolder: string = '';
-		let projectName: string = '';
 
 		let quickpickSelection = await vscode.window.showQuickPick(
 			[constants.browseEllipsisWithIcon],
@@ -893,7 +892,6 @@ export class ProjectsController {
 
 			outputFolder = folders[0].fsPath;
 
-			projectName = path.basename(specPath, path.extname(specPath));
 			newProjectFolder = path.join(outputFolder, projectName);
 
 			if (await utils.exists(newProjectFolder)) {
@@ -909,11 +907,12 @@ export class ProjectsController {
 			}
 		}
 
-		await fs.mkdir(newProjectFolder);
 		return { newProjectFolder, outputFolder, projectName };
 	}
 
 	public async generateAutorestFiles(specPath: string, newProjectFolder: string): Promise<string | undefined> {
+		await fs.mkdir(newProjectFolder, { recursive: true });
+
 		return vscode.window.withProgress(
 			{
 				location: vscode.ProgressLocation.Notification,
@@ -932,6 +931,25 @@ export class ProjectsController {
 		workspaceApi.showProjectsView();
 	}
 
+	public async promptForAutorestProjectName(defaultName?: string): Promise<string | undefined> {
+		let name: string | undefined = await vscode.window.showInputBox({
+			ignoreFocusOut: true,
+			prompt: constants.autorestProjectName,
+			value: defaultName,
+			validateInput: (value) => {
+				return value.trim() ? undefined : constants.nameMustNotBeEmpty;
+			}
+		});
+
+		if (name === undefined) {
+			return; // cancelled by user
+		}
+
+		name = name.trim();
+
+		return name;
+	}
+
 	public async generateProjectFromOpenApiSpec(): Promise<Project | undefined> {
 		try {
 			// 1. select spec file
@@ -940,13 +958,19 @@ export class ProjectsController {
 				return;
 			}
 
-			// 2. select location, make new folder
-			const projectInfo = await this.selectAutorestProjectLocation(specPath!);
+			// 2. prompt for project name
+			const projectName = await this.promptForAutorestProjectName(path.basename(specPath, path.extname(specPath)));
+			if (!projectName) {
+				return;
+			}
+
+			// 3. select location, make new folder
+			const projectInfo = await this.selectAutorestProjectLocation(projectName!);
 			if (!projectInfo) {
 				return;
 			}
 
-			// 3. run AutoRest to generate .sql files
+			// 4. run AutoRest to generate .sql files
 			const result = await this.generateAutorestFiles(specPath, projectInfo.newProjectFolder);
 			if (!result) { // user canceled operation when choosing how to run autorest
 				return;
@@ -960,7 +984,7 @@ export class ProjectsController {
 				return;
 			}
 
-			// 4. create new SQL project
+			// 5. create new SQL project
 			const newProjFilePath = await this.createNewProject({
 				newProjName: projectInfo.projectName,
 				folderUri: vscode.Uri.file(projectInfo.outputFolder),
@@ -969,7 +993,7 @@ export class ProjectsController {
 
 			const project = await Project.openProject(newProjFilePath);
 
-			// 5. add generated files to SQL project
+			// 6. add generated files to SQL project
 			await project.addToProject(fileFolderList.filter(f => !f.fsPath.endsWith(constants.autorestPostDeploymentScriptName))); // Add generated file structure to the project
 
 			const postDeploymentScript: vscode.Uri | undefined = this.findPostDeploymentScript(fileFolderList);
@@ -978,7 +1002,7 @@ export class ProjectsController {
 				await project.addScriptItem(path.relative(project.projectFolderPath, postDeploymentScript.fsPath), undefined, templates.postDeployScript);
 			}
 
-			// 6. add project to workspace and open
+			// 7. add project to workspace and open
 			await this.openProjectInWorkspace(newProjFilePath);
 
 			return project;
diff --git a/extensions/sql-database-projects/src/test/projectController.test.ts b/extensions/sql-database-projects/src/test/projectController.test.ts
index 1b2de12007..9c4fc845dc 100644
--- a/extensions/sql-database-projects/src/test/projectController.test.ts
+++ b/extensions/sql-database-projects/src/test/projectController.test.ts
@@ -684,7 +684,8 @@ describe('ProjectsController', function (): void {
 			const parentFolder = await testUtils.generateTestFolderPath();
 			await testUtils.createDummyFileStructure();
 			const specName = 'DummySpec.yaml';
-			const newProjFolder = path.join(parentFolder, path.basename(specName, '.yaml'));
+			const renamedProjectName = 'RenamedProject';
+			const newProjFolder = path.join(parentFolder, renamedProjectName);
 			let fileList: vscode.Uri[] = [];
 
 			const projController = TypeMoq.Mock.ofType(ProjectsController);
@@ -697,7 +698,7 @@ describe('ProjectsController', function (): void {
 				return {
 					newProjectFolder: newProjFolder,
 					outputFolder: parentFolder,
-					projectName: path.basename(specName, '.yaml')
+					projectName: renamedProjectName
 				};
 			});
 
@@ -707,10 +708,14 @@ describe('ProjectsController', function (): void {
 				return 'some dummy console output';
 			});
 
+			projController.setup(x => x.promptForAutorestProjectName(TypeMoq.It.isAny())).returns(async () => renamedProjectName);
 			projController.setup(x => x.openProjectInWorkspace(TypeMoq.It.isAny())).returns(async () => { });
 
 			const project = (await projController.object.generateProjectFromOpenApiSpec())!;
 
+			should(project.projectFileName).equal(renamedProjectName);
+			should(project.projectFolderPath.endsWith(renamedProjectName)).is.true(`Expected: '${project.projectFolderPath}' to include '${renamedProjectName}'`);
+
 			should(project.postDeployScripts.length).equal(1, `Expected 1 post-deployment script, got ${project?.postDeployScripts.length}`);
 			const actual = path.basename(project.postDeployScripts[0].fsUri.fsPath);
 			should(actual).equal(constants.autorestPostDeploymentScriptName, `Unexpected post-deployment script name: ${actual}, expected ${constants.autorestPostDeploymentScriptName}`);