diff --git a/hadoop-mapreduce-project/CHANGES.txt b/hadoop-mapreduce-project/CHANGES.txt
index 1e0976bf9f..897739a4fa 100644
--- a/hadoop-mapreduce-project/CHANGES.txt
+++ b/hadoop-mapreduce-project/CHANGES.txt
@@ -230,6 +230,9 @@ Release 0.23.1 - Unreleased
 
     MAPREDUCE-3479. JobClient#getJob cannot find local jobs. (tomwhite)
 
+    MAPREDUCE-3456. $HADOOP_PREFIX/bin/yarn should set defaults for 
+    $HADOOP_*_HOME (Eric Payne via mahadev)
+
 Release 0.23.0 - 2011-11-01 
 
   INCOMPATIBLE CHANGES
diff --git a/hadoop-mapreduce-project/hadoop-yarn/bin/yarn b/hadoop-mapreduce-project/hadoop-yarn/bin/yarn
index b11c94b37e..b8e23a97f5 100644
--- a/hadoop-mapreduce-project/hadoop-yarn/bin/yarn
+++ b/hadoop-mapreduce-project/hadoop-yarn/bin/yarn
@@ -148,9 +148,13 @@ IFS=
 
 # add hadoop-common libs to CLASSPATH
 if [ ! -d "$HADOOP_COMMON_HOME" ]; then
-  echo No HADOOP_COMMON_HOME set. 
-  echo Please specify it either in yarn-env.sh or in the environment.
-  exit 1
+  if [ -d "$HADOOP_PREFIX" ]; then
+    export HADOOP_COMMON_HOME=$HADOOP_PREFIX
+  else
+    echo No HADOOP_COMMON_HOME set. 
+    echo Please specify it either in yarn-env.sh or in the environment.
+    exit 1
+  fi
 fi
 
 CLASSPATH=${CLASSPATH}:$HADOOP_COMMON_HOME/share/hadoop/common'/*'
@@ -158,9 +162,13 @@ CLASSPATH=${CLASSPATH}:$HADOOP_COMMON_HOME/share/hadoop/common/lib'/*'
 
 # add hadoop-hdfs libs to CLASSPATH
 if [ ! -d "$HADOOP_HDFS_HOME" ]; then
-  echo No HADOOP_HDFS_HOME set. 
-  echo Please specify it either in yarn-env.sh or in the environment.
-  exit 1
+  if [ -d "$HADOOP_PREFIX" ]; then
+    export HADOOP_HDFS_HOME=$HADOOP_PREFIX
+  else
+    echo No HADOOP_HDFS_HOME set. 
+    echo Please specify it either in yarn-env.sh or in the environment.
+    exit 1
+  fi
 fi
 CLASSPATH=${CLASSPATH}:$HADOOP_HDFS_HOME/share/hadoop/hdfs'/*'
 CLASSPATH=${CLASSPATH}:$HADOOP_HDFS_HOME/share/hadoop/hdfs/lib'/*'