diff --git a/bin/vagrant-unpackage b/bin/vagrant-unpackage
new file mode 100755
index 000000000..3cbdaf5da
--- /dev/null
+++ b/bin/vagrant-unpackage
@@ -0,0 +1,27 @@
+#!/usr/bin/env ruby
+begin
+  require File.expand_path('../../.bundle/environment', __FILE__)
+rescue LoadError
+  # Fallback on rubygems
+  require "rubygems"
+end
+
+require 'git-style-binary/command'
+
+# Get library
+libdir = File.join(File.dirname(__FILE__), '..', 'lib')
+$:.unshift(libdir) unless $:.include?(libdir)
+require 'vagrant'
+
+GitStyleBinary.command do
+  short_desc "unpackage a vagrant environment"
+  banner <<-EOS
+Usage: #{command.full_name} #{all_options_string}
+
+Unpackage a vagrant environment
+
+EOS
+  run do |command|
+    Vagrant::Commands.unpackage(command.argv[0])
+  end
+end
diff --git a/config/default.rb b/config/default.rb
index 80a95bf57..304ada189 100644
--- a/config/default.rb
+++ b/config/default.rb
@@ -1,6 +1,7 @@
 Vagrant::Config.run do |config|
   # default config goes here
   config.vagrant.log_output = STDOUT
+  config.vagrant.home = "~/.vagrant"
 
   config.ssh.username = "vagrant"
   config.ssh.password = "vagrant"
@@ -17,6 +18,8 @@ Vagrant::Config.run do |config|
   config.vm.disk_image_format = 'VMDK'
 
   config.package.name = 'vagrant'
+  config.package.delimiter = 'VAGRANT'
+  config.package.delimiter_regex = /(.*)#{config.package.delimiter}(.+)#{config.package.delimiter}(.*[\n\r])/
 
   config.chef.cookbooks_path = "cookbooks"
   config.chef.provisioning_path = "/tmp/vagrant-chef"
diff --git a/lib/vagrant/commands.rb b/lib/vagrant/commands.rb
index c89a0c851..cbea1742b 100644
--- a/lib/vagrant/commands.rb
+++ b/lib/vagrant/commands.rb
@@ -109,6 +109,14 @@ The vagrant virtual environment you are trying to package must be powered off
 error
         Env.persisted_vm.package(name || Vagrant.config[:package][:name], FileUtils.pwd)
       end
+
+      def unpackage(name)
+        Env.load!
+        error_and_exit(<<-error) unless name
+Please specify a target package to unpack and import
+error
+        VM.up(VM.unpackage(name))
+      end
     end
   end
 end
diff --git a/lib/vagrant/config.rb b/lib/vagrant/config.rb
index 7993b207e..a05aa71d9 100644
--- a/lib/vagrant/config.rb
+++ b/lib/vagrant/config.rb
@@ -70,10 +70,16 @@ module Vagrant
         raise Exception.new "disk_storage must be set to a directory" unless File.directory?(val)
         @hd_location=val
       end
+
+      def base
+        File.expand_path(@base)
+      end
     end
 
     class PackageConfig < Base
       attr_accessor :name
+      attr_accessor :delimiter
+      attr_accessor :delimiter_regex
     end
 
     class ChefConfig < Base
@@ -84,6 +90,11 @@ module Vagrant
 
     class VagrantConfig < Base
       attr_accessor :log_output
+      attr_accessor :home
+
+      def home
+        File.expand_path(@home)
+      end
     end
 
     class Top < Base
diff --git a/lib/vagrant/util.rb b/lib/vagrant/util.rb
index c34f0203b..d62f8505b 100644
--- a/lib/vagrant/util.rb
+++ b/lib/vagrant/util.rb
@@ -1,6 +1,6 @@
 module Vagrant
   module Util
-    def self.included?(base)
+    def self.included(base)
       base.extend Vagrant::Util
     end
     
diff --git a/lib/vagrant/vm.rb b/lib/vagrant/vm.rb
index db1f6f482..c36202873 100644
--- a/lib/vagrant/vm.rb
+++ b/lib/vagrant/vm.rb
@@ -2,12 +2,71 @@ module Vagrant
   class VM
     include Vagrant::Util
     attr_reader :vm
+    attr_accessor :from
 
     class << self
       # Bring up the virtual machine. Imports the base image and
       # provisions it.
-      def up
-        new.create
+      def up(from=Vagrant.config[:vm][:base])
+        vm = new
+        vm.from = from 
+        vm.create
+      end
+
+      # Unpack the specified vm package
+      def unpackage(package_path)
+        working_dir = package_path.chomp(File.extname(package_path))
+        new_base_dir = File.join(Vagrant.config[:vagrant][:home], File.basename(package_path, '.*'))
+
+        # Exit if folder of same name exists
+        # TODO provide a way for them to specify the directory name
+        error_and_exit(<<-error) if File.exists?(new_base_dir)
+The directory `#{File.basename(package_path, '.*')}` already exists under #{Vagrant.config[:vagrant][:home]}. Please 
+remove it, rename your packaged VM file, or (TODO) specifiy an 
+alternate directory 
+error
+        
+        logger.info "Creating working dir: #{working_dir} ..."
+        FileUtils.mkpath(working_dir)
+
+        logger.info "Decompressing the packaged VM: #{package_path} ..."
+        decompress(package_path, working_dir)
+        
+        logger.info "Moving the unpackaged VM to #{new_base_dir} ..."
+        FileUtils.mv(working_dir, Vagrant.config[:vagrant][:home])
+        
+        #Return the ovf file for importation
+        Dir["#{new_base_dir}/*.ovf"].first
+      end
+
+      def decompress(path, dir, file_delimeter=Vagrant.config[:package][:delimiter_regex])
+        file = nil
+        Zlib::GzipReader.open(path) do |gz|
+          begin
+            gz.each_line do |line|
+              
+              # If the line is a file delimiter create new file and write to it
+              if line =~ file_delimeter
+
+                #Write the the part of the line belonging to the previous file
+                if file
+                  file.write $1
+                  file.close 
+                end
+
+                #Open a new file with the name contained in the delimiter
+                file = File.open(File.join(dir, $2), 'w')
+
+                #Write the rest of the line to the new file
+                file.write $3
+              else
+                file.write line
+              end
+            end
+          ensure
+            file.close if file
+          end
+        end
       end
 
       # Finds a virtual machine by a given UUID and either returns
@@ -76,7 +135,7 @@ error
 
     def import
       logger.info "Importing base VM (#{Vagrant.config[:vm][:base]})..."
-      @vm = VirtualBox::VM.import(File.expand_path(Vagrant.config[:vm][:base]))
+      @vm = VirtualBox::VM.import(@from)
     end
 
     def persist
@@ -173,6 +232,7 @@ error
 
     # TODO the longest method, needs to be split up
     def package(name, to)
+      delimiter = Vagrant.config[:package][:delimiter]
       folder = FileUtils.mkpath(File.join(to, name))
       logger.info "Creating working directory: #{folder} ..."
 
@@ -182,17 +242,15 @@ error
       logger.info "Exporting required VM files to working directory ..."
       @vm.export(ovf_path)
       
-      # TODO use zlib ...
-      logger.info "Packaging VM into #{name}.box ..."
-      Tar.open(tar_path, File::CREAT | File::WRONLY, 0644, Tar::GNU) do |tar|
-        begin
-          # appending the expanded file path adds the whole folder tree 
-          # to the tar archive there must be a better way
-          working_dir = FileUtils.pwd
-          FileUtils.cd(to)
-          tar.append_tree(name)
-        ensure
-          FileUtils.cd(working_dir)
+      logger.info "Packaging VM into #{tar_path} ..."
+      Zlib::GzipWriter.open(tar_path) do |gz|
+        first_file = true
+        Dir.new(folder).each do  |file|
+          next if File.directory?(file)
+          # Delimit the files, and guarantee new line for next file if not the first
+          gz.write "#{delimiter}#{file}#{delimiter}"
+          File.open(File.join(folder, file)).each { |line| gz.write(line) } 
+          first_file = false
         end
       end
 
@@ -202,6 +260,7 @@ error
       tar_path
     end
 
+
     # TODO need a better way to which controller is the hd
     def hd
       @vm.storage_controllers.first.devices.first
diff --git a/test/test_helper.rb b/test/test_helper.rb
index ffe38f2fe..93894fae4 100644
--- a/test/test_helper.rb
+++ b/test/test_helper.rb
@@ -36,11 +36,16 @@ class Test::Unit::TestCase
       config.vm.project_directory = "/hobo"
       config.vm.forward_port("ssh", 22, 2222)
 
+      config.package.delimiter = 'V'
+      config.package.delimiter_regex = /'V(.+)V'/
+
       config.chef.cookbooks_path = "cookbooks"
       config.chef.provisioning_path = "/tmp/hobo-chef"
       config.chef.json = {
         :recipes => ["hobo_main"]
       }
+
+      config.vagrant.home = '~/.home'
     end
 
     Vagrant::Config.execute!
diff --git a/test/vagrant/vm_test.rb b/test/vagrant/vm_test.rb
index 12c7bb27d..31f09453c 100644
--- a/test/vagrant/vm_test.rb
+++ b/test/vagrant/vm_test.rb
@@ -15,6 +15,7 @@ class VMTest < Test::Unit::TestCase
     should "create a Vagrant::VM instance and call create" do
       inst = mock("instance")
       inst.expects(:create).once
+      inst.expects(:from=).with(File.expand_path(Vagrant.config[:vm][:base]))
       Vagrant::VM.expects(:new).returns(inst)
       Vagrant::VM.up
     end
@@ -242,6 +243,7 @@ class VMTest < Test::Unit::TestCase
     end
   end
 
+  # TODO more comprehensive testing
   context "packaging a vm" do
     should "dump the three necessary files to a tar in the current working dir" do
       location = FileUtils.pwd
@@ -250,10 +252,24 @@ class VMTest < Test::Unit::TestCase
       @mock_vm.expects(:export).with(File.join(new_dir, "#{name}.ovf"))
       FileUtils.expects(:mkpath).with(new_dir).returns(new_dir)
       FileUtils.expects(:rm_r).with(new_dir)
-      Tar.expects(:open)
+      Zlib::GzipWriter.expects(:open).with("#{location}/#{name}.box")
 
       # TODO test whats passed to the open tar.append_tree
       assert_equal Vagrant::VM.new(@mock_vm).package(name, location), "#{new_dir}.box"
     end
   end
+  
+  context "unpackaging a vm" do
+    
+    # TODO test actual decompression
+    should "call decompress with the path to the file and the directory to decompress to" do
+      working_dir = File.join FileUtils.pwd, 'something'
+      file = File.join(FileUtils.pwd, 'something.box')
+      FileUtils.expects(:mkpath).with(working_dir).once
+      FileUtils.expects(:mv).with(working_dir, Vagrant.config[:vagrant][:home]).once
+      Vagrant::VM.expects(:decompress).with(file, working_dir).once
+      Vagrant::VM.unpackage(file)
+
+    end
+  end
 end