diff --git a/cmd/kops/create_cluster.go b/cmd/kops/create_cluster.go
index a1242f80b7..7d92ed489e 100644
--- a/cmd/kops/create_cluster.go
+++ b/cmd/kops/create_cluster.go
@@ -808,9 +808,23 @@ func RunCreateCluster(f *util.Factory, out io.Writer, c *CreateClusterOptions) e
 		}
 	}
 
+	// Populate project
 	if c.Project != "" {
 		cluster.Spec.Project = c.Project
 	}
+	if api.CloudProviderID(cluster.Spec.CloudProvider) == api.CloudProviderGCE {
+		if cluster.Spec.Project == "" {
+			project, err := gce.DefaultProject()
+			if err != nil {
+				glog.Warningf("unable to get default google cloud project: %v", err)
+			} else if project == "" {
+				glog.Warningf("default google cloud project not set (try `gcloud config set project <name>`")
+			} else {
+				glog.Infof("using google cloud project: %s", project)
+			}
+			cluster.Spec.Project = project
+		}
+	}
 
 	if c.KubernetesVersion != "" {
 		cluster.Spec.KubernetesVersion = c.KubernetesVersion
diff --git a/upup/pkg/fi/cloudup/gce/gce_cloud.go b/upup/pkg/fi/cloudup/gce/gce_cloud.go
index e59610b958..9dee2d25b8 100644
--- a/upup/pkg/fi/cloudup/gce/gce_cloud.go
+++ b/upup/pkg/fi/cloudup/gce/gce_cloud.go
@@ -17,11 +17,12 @@ limitations under the License.
 package gce
 
 import (
+	"bytes"
 	"fmt"
 	"net/http"
-	"strings"
-
 	"os"
+	"os/exec"
+	"strings"
 
 	"github.com/golang/glog"
 	"golang.org/x/net/context"
@@ -79,6 +80,37 @@ func (c *gceCloudImplementation) ProviderID() kops.CloudProviderID {
 
 var gceCloudInstances map[string]GCECloud = make(map[string]GCECloud)
 
+// DefaultProject returns the current project configured in the gcloud SDK, ("", nil) if no project was set
+func DefaultProject() (string, error) {
+	// The default project isn't usually defined by the google cloud APIs,
+	// for example the Application Default Credential won't have ProjectID set.
+	// If we're running on a GCP instance, we can get it from the metadata service,
+	// but the normal kops CLI usage is running locally with gcloud configuration with a project,
+	// so we use that value.
+	cmd := exec.Command("gcloud", "config", "get-value", "project")
+
+	env := os.Environ()
+	cmd.Env = env
+	var stdout bytes.Buffer
+	cmd.Stdout = &stdout
+
+	var stderr bytes.Buffer
+	cmd.Stderr = &stderr
+
+	human := strings.Join(cmd.Args, " ")
+	glog.V(2).Infof("Running command: %s", human)
+	err := cmd.Run()
+	if err != nil {
+		glog.Infof("error running %s", human)
+		glog.Info(stdout.String())
+		glog.Info(stderr.String())
+		return "", fmt.Errorf("error running %s: %v", human, err)
+	}
+
+	projectID := strings.TrimSpace(stdout.String())
+	return projectID, err
+}
+
 func NewGCECloud(region string, project string, labels map[string]string) (GCECloud, error) {
 	i := gceCloudInstances[region+"::"+project]
 	if i != nil {