diff --git a/lib/project-data.ts b/lib/project-data.ts
index 8b79efe523..638f10823a 100644
--- a/lib/project-data.ts
+++ b/lib/project-data.ts
@@ -2,6 +2,7 @@
 "use strict";
 
 import path = require("path");
+import os = require("os");
 
 export class ProjectData implements IProjectData {
 	public projectDir: string;
@@ -28,8 +29,16 @@ export class ProjectData implements IProjectData {
 				this.projectFilePath = path.join(projectDir, this.$staticConfig.PROJECT_FILE_NAME);
 
 				if (this.$fs.exists(this.projectFilePath).wait()) {
+					try {
 					var fileContent = this.$fs.readJson(this.projectFilePath).wait();
 					this.projectId = fileContent.id;
+					} catch (err) {
+						this.$errors.fail({formatStr: "The project file %s is corrupted." + os.EOL +
+							"Consider restoring an earlier version from your source control or backup." + os.EOL +
+							"Additional technical info: %s",
+								suppressCommandHelp: true},
+							this.projectFilePath, err.toString());
+					}
 				}
 			} else {
 				this.$errors.fail("No project found at or above '%s' and neither was a --path specified.", process.cwd());