diff --git a/Gemfile b/Gemfile
index 7ff7515143c7..e66f7e23f29d 100644
--- a/Gemfile
+++ b/Gemfile
@@ -69,6 +69,9 @@ gem "haml-rails"
 # Files attachments
 gem "carrierwave"
 
+# Drag and Drop UI
+gem 'dropzonejs-rails'
+
 # for aws storage
 gem "fog", "~> 1.14", group: :aws
 gem "unf", group: :aws
diff --git a/Gemfile.lock b/Gemfile.lock
index f5f31105e184..90bf1cd1f36c 100644
--- a/Gemfile.lock
+++ b/Gemfile.lock
@@ -103,6 +103,8 @@ GEM
     diffy (3.0.3)
     docile (1.1.1)
     dotenv (0.9.0)
+    dropzonejs-rails (0.4.14)
+      rails (> 3.1)
     email_spec (1.5.0)
       launchy (~> 2.1)
       mail (~> 2.2)
@@ -577,6 +579,7 @@ DEPENDENCIES
   devise (= 3.0.4)
   devise-async (= 0.8.0)
   diffy (~> 3.0.3)
+  dropzonejs-rails
   email_spec
   email_validator (~> 1.4.0)
   enumerize
diff --git a/app/assets/javascripts/application.js.coffee b/app/assets/javascripts/application.js.coffee
index a22ff6dec319..72ce08b65501 100644
--- a/app/assets/javascripts/application.js.coffee
+++ b/app/assets/javascripts/application.js.coffee
@@ -29,6 +29,7 @@
 #= require underscore
 #= require nprogress
 #= require nprogress-turbolinks
+#= require dropzone
 #= require_tree .
 
 window.slugify = (text) ->
diff --git a/app/assets/stylesheets/application.scss b/app/assets/stylesheets/application.scss
index c53873f95a2a..0b372a87a111 100644
--- a/app/assets/stylesheets/application.scss
+++ b/app/assets/stylesheets/application.scss
@@ -10,6 +10,7 @@
  *= require_self
  *= require nprogress
  *= require nprogress-bootstrap
+ *= require dropzone/basic
 */
 
 @import "main/*";
diff --git a/app/assets/stylesheets/sections/issues.scss b/app/assets/stylesheets/sections/issues.scss
index 02c9123178f1..57d1618291d2 100644
--- a/app/assets/stylesheets/sections/issues.scss
+++ b/app/assets/stylesheets/sections/issues.scss
@@ -168,3 +168,58 @@ form.edit-issue {
     }
   }
 }
+
+#div-dropzone {
+  position: relative;
+
+  #div-dropzone-hover {
+    position: absolute;
+    top: 50%;
+    left: 50%;
+    margin-top: -0.5em;
+    margin-left: -0.6em;
+    opacity: 0;
+    font-size: 50px;
+    transition: opacity 200ms ease-in-out;
+  }
+
+  #div-dropzone-error {
+    position: absolute;
+    top: 50%;
+    width: 100%;
+    background-color: #e74c3c;
+    margin-top: -1em;
+    opacity: 0;
+    font-size: 20px;
+    text-align: center;
+    transition: opacity 200ms ease-in-out;
+  }
+
+  #div-dropzone-spinner {
+    position: absolute;
+    top: 100%;
+    left: 100%;
+    margin-top: -1.1em;
+    margin-left: -1.1em;
+    opacity: 0;
+    font-size: 30px;
+    transition: opacity 200ms ease-in-out;
+  }
+}
+
+#div-dropzone {
+  padding: 0;
+  border: 0;
+}
+
+.div-dropzone-icon {
+  display: block;
+  text-align: center;
+  font-size: inherit;
+}
+
+.div-dropzone-icon-error {
+  display: inline;
+  text-align: center;
+  font-size: inherit;
+}
diff --git a/app/controllers/files_controller.rb b/app/controllers/files_controller.rb
index bf30de565ed0..d9a6adee6a8b 100644
--- a/app/controllers/files_controller.rb
+++ b/app/controllers/files_controller.rb
@@ -13,5 +13,4 @@ def download
       redirect_to uploader.url
     end
   end
-end
-
+end
\ No newline at end of file
diff --git a/app/controllers/projects/issues_controller.rb b/app/controllers/projects/issues_controller.rb
index 4e7a716bfe41..e1aedc3acf6f 100644
--- a/app/controllers/projects/issues_controller.rb
+++ b/app/controllers/projects/issues_controller.rb
@@ -60,7 +60,6 @@ def show
 
   def create
     @issue = Issues::CreateService.new(project, current_user, params[:issue]).execute
-
     respond_to do |format|
       format.html do
         if @issue.valid?
@@ -69,7 +68,11 @@ def create
           render :new
         end
       end
-      format.js
+      format.js do |format|
+        # issue = Issues.create()
+
+        @link = @issue.attachment.url.to_js
+      end
     end
   end
 
@@ -77,7 +80,7 @@ def update
     @issue = Issues::UpdateService.new(project, current_user, params[:issue]).execute(issue)
 
     respond_to do |format|
-      format.js
+      format.js   
       format.html do
         if @issue.valid?
           redirect_to [@project, @issue]
@@ -93,6 +96,24 @@ def bulk_update
     redirect_to :back, notice: "#{result[:count]} issues updated"
   end
 
+  def upload_image
+    @main_dir = FileUploader.generate_dir
+    upload_path = File.join(project.namespace.path, @project.path, 'issues', @main_dir)
+    accepted_types = %w(png jpg jpeg gif)
+    uploader = FileUploader.new('uploads', upload_path, accepted_types)
+    links = []
+    params['issue-imgs'].each do |img|
+      alt = uploader.store!(img)
+      links << { 'alt' => File.basename(alt, '.*'), 
+                 'url' => File.join(root_url, uploader.url) }
+    end
+
+
+    respond_to do |format|
+      format.json { render json: { links: links } }
+    end
+  end
+
   protected
 
   def issue
@@ -128,7 +149,6 @@ def issues_filtered
   #
   def redirect_old
     issue = @project.issues.find_by(id: params[:id])
-
     if issue
       redirect_to project_issue_path(@project, issue)
       return
diff --git a/app/models/issue.rb b/app/models/issue.rb
index 16d51345e5a1..b4666edb19df 100644
--- a/app/models/issue.rb
+++ b/app/models/issue.rb
@@ -15,8 +15,12 @@
 #  milestone_id :integer
 #  state        :string(255)
 #  iid          :integer
+#  attachment   :string(255)
 #
 
+require 'carrierwave/orm/activerecord'
+require 'file_size_validator'
+
 class Issue < ActiveRecord::Base
   include Issuable
   include InternalId
@@ -30,7 +34,8 @@ class Issue < ActiveRecord::Base
   scope :of_user_team, ->(team) { where(project_id: team.project_ids, assignee_id: team.member_ids) }
 
   attr_accessible :title, :assignee_id, :position, :description,
-                  :milestone_id, :label_list, :state_event
+                  :milestone_id, :label_list, :author_id_of_changes,
+                  :state_event
 
   acts_as_taggable_on :labels
 
diff --git a/app/services/issues/create_service.rb b/app/services/issues/create_service.rb
index d6137833bb9d..cbb9e4dfa09e 100644
--- a/app/services/issues/create_service.rb
+++ b/app/services/issues/create_service.rb
@@ -3,14 +3,12 @@ class CreateService < Issues::BaseService
     def execute
       issue = project.issues.new(params)
       issue.author = current_user
-
       if issue.save
         notification_service.new_issue(issue, current_user)
         event_service.open_issue(issue, current_user)
         issue.create_cross_references!(issue.project, current_user)
         execute_hooks(issue)
       end
-
       issue
     end
   end
diff --git a/app/uploaders/attachment_uploader.rb b/app/uploaders/attachment_uploader.rb
index b122b6c8658c..9ed9754f03f8 100644
--- a/app/uploaders/attachment_uploader.rb
+++ b/app/uploaders/attachment_uploader.rb
@@ -33,4 +33,4 @@ def file_storage?
   def reset_events_cache(file)
     model.reset_events_cache if model.is_a?(User)
   end
-end
+end
\ No newline at end of file
diff --git a/app/uploaders/file_uploader.rb b/app/uploaders/file_uploader.rb
new file mode 100644
index 000000000000..0463af0b4d8c
--- /dev/null
+++ b/app/uploaders/file_uploader.rb
@@ -0,0 +1,41 @@
+# encoding: utf-8
+class FileUploader < CarrierWave::Uploader::Base
+  storage :file
+
+  def initialize(base_dir, path, allowed_extensions = nil)
+    @base_dir = base_dir
+    @path = path
+    @allowed_extensions = allowed_extensions
+  end
+
+  def base_dir
+    @base_dir
+  end
+
+  def store_dir
+    File.join(base_dir, @path)
+  end
+
+  def cache_dir
+    File.join(base_dir, 'tmp', @path)
+  end
+
+  def extension_white_list
+    @allowed_extensions
+  end
+
+  def store!(file)
+    original_filename = file.original_filename
+    file.original_filename = self.class.generate_filename(file) + File.extname(original_filename)
+    super
+    original_filename
+  end
+
+  def self.generate_filename(file)
+    Digest::MD5.hexdigest(File.basename(file.original_filename, '.*'))
+  end
+
+  def self.generate_dir
+    SecureRandom.hex(5)
+  end
+end
diff --git a/app/views/projects/issues/_form.html.haml b/app/views/projects/issues/_form.html.haml
index 84703229fe6b..df885aebb7b7 100644
--- a/app/views/projects/issues/_form.html.haml
+++ b/app/views/projects/issues/_form.html.haml
@@ -19,8 +19,19 @@
     .form-group
       = f.label :description, 'Description', class: 'control-label'
       .col-sm-10
-        = f.text_area :description, class: "form-control js-gfm-input", rows: 14
-        %p.hint Issues are parsed with #{link_to "GitLab Flavored Markdown", help_markdown_path, target: '_blank'}.
+        #div-dropzone
+          = f.text_area :description, class: 'form-control js-gfm-input', rows: 14
+          #div-dropzone-hover
+            %i.icon-picture.div-dropzone-icon
+          #div-dropzone-error 
+            %i.icon-remove.div-dropzone-icon-error
+            %div#dropzone-error-message{style:'display:inline'}
+              Can't Attach File
+          #div-dropzone-spinner 
+            %i.icon-spinner.icon-spin.div-dropzone-icon
+        %p.hint{style: "display: inline"} Issues are parsed with #{link_to "GitLab Flavored Markdown", help_markdown_path, target: '_blank'}.
+        %p.hint.pull-right{style: "display: inline"} Attach images (JPG, PNG, GIF) by dragging & dropping or #{link_to "selecting them", '#', class: 'markdown-selector' }.
+
     %hr
     .form-group
       .issue-assignee
@@ -46,8 +57,6 @@
         = f.text_field :label_list, maxlength: 2000, class: "form-control"
         %p.hint Separate labels with commas.
 
-
-
     .form-actions
       - if @issue.new_record?
         = f.submit 'Submit new issue', class: "btn btn-create"
@@ -57,9 +66,6 @@
       - cancel_path = @issue.new_record? ? project_issues_path(@project) : project_issue_path(@project, @issue)
       = link_to "Cancel", cancel_path, class: 'btn btn-cancel'
 
-
-
-
 :javascript
   $("#issue_label_list")
     .bind( "keydown", function( event ) {
@@ -94,3 +100,73 @@
     $('#issue_assignee_id').val("#{current_user.id}").trigger("change");
     e.preventDefault();
   });
+
+  function handlePaste(e) {
+    clipboardData = e.originalEvent.clipboardData;
+    for (var i = 0 ; i < clipboardData.items.length ; i++) {
+      var item = clipboardData.items[i];
+      console.log(item);
+      if (item.type.indexOf("image") != -1) {
+        uploadFile(item.getAsFile());
+      }
+      else {
+        console.log("Discarding non-image paste data");
+      }
+    }
+  }
+
+  function formatLinks(links) {
+    var md_links = [];
+    links.forEach(function (str) {
+      md_links.push('![' + str.alt + '](' + str.url + ')');
+    })
+    return md_links;
+  }
+
+  $('#div-dropzone').dropzone({
+    url: "#{upload_image_project_issues_path}",
+    dictDefaultMessage: "",
+    paramName: "issue-imgs",
+    maxFilesize: 10,
+    uploadMultiple: true,
+    acceptedFiles: "image/jpg,image/jpeg,image/gif,image/png",
+    headers: { "X-CSRF-Token": $('meta[name="csrf-token"]').attr('content')},
+    
+    success: function(header,response){
+      $("#issue_description").val($("#issue_description").val() + formatLinks(response.links).join("\n") + "\n");
+    },
+
+    error: function(temp, errorMessage) {
+      $('#dropzone-error-message').text(errorMessage);
+      $('#div-dropzone-error').css('opacity', 0.7);
+      $('#div-dropzone-error').delay(500).fadeTo("slow", 0);
+    },
+
+    sending: function() {
+      $('#div-dropzone-spinner').css('opacity', 0.7);    
+    },
+    
+    complete: function() {
+      $('#div-dropzone-spinner').css('opacity',0);
+    }
+  });
+
+  $('#div-dropzone').on('dragenter',function(){
+    $(this).children('textarea').focus();
+    $('#div-dropzone-hover').css('opacity',0.7);
+  });
+
+  $('body').on('dragover',function(){
+    $('#div-dropzone').children('textarea').blur();
+    $('#div-dropzone-hover').css('opacity',0);
+  });
+
+  $('#div-dropzone').on('drop',function(){
+    $('.dz-preview').remove();
+    $('#div-dropzone-hover').css('opacity',0);
+  });
+
+  $('.markdown-selector').click(function() {
+    $('#div-dropzone').click();
+  });
+
diff --git a/app/views/projects/issues/new.html.haml b/app/views/projects/issues/new.html.haml
index b1bc3ba0eba6..de8a34167ef1 100644
--- a/app/views/projects/issues/new.html.haml
+++ b/app/views/projects/issues/new.html.haml
@@ -1 +1 @@
-= render "form"
+= render "form"
\ No newline at end of file
diff --git a/app/views/projects/issues/show.html.haml b/app/views/projects/issues/show.html.haml
index b6d3a8edf4da..fee5c165118e 100644
--- a/app/views/projects/issues/show.html.haml
+++ b/app/views/projects/issues/show.html.haml
@@ -49,6 +49,7 @@
       .wiki
         = preserve do
           = markdown @issue.description
+          
   .context
     %cite.cgray
       = render partial: 'issue_context', locals: { issue: @issue }
@@ -73,4 +74,4 @@
         = label.name
       &nbsp;
 
-.voting_notes#notes= render "projects/notes/notes_with_form"
+.voting_notes#notes= render "projects/notes/notes_with_form"
\ No newline at end of file
diff --git a/config/routes.rb b/config/routes.rb
index 7641fe430889..40d695176c1d 100644
--- a/config/routes.rb
+++ b/config/routes.rb
@@ -67,7 +67,6 @@
   # Attachments serving
   #
   get 'files/:type/:id/:filename' => 'files#download', constraints: { id: /\d+/, type: /[a-z]+/, filename:  /.+/ }
-
   #
   # Admin Area
   #
@@ -136,8 +135,6 @@
 
   match "/u/:username" => "users#show", as: :user, constraints: { username: /.*/ }, via: :get
 
-
-
   #
   # Dashboard Area
   #
@@ -303,6 +300,7 @@
       resources :issues, constraints: {id: /\d+/}, except: [:destroy] do
         collection do
           post  :bulk_update
+          post :upload_image
         end
       end
 
diff --git a/db/schema.rb b/db/schema.rb
index 93837337afc3..4d3a6b821947 100644
--- a/db/schema.rb
+++ b/db/schema.rb
@@ -87,6 +87,7 @@
     t.integer  "milestone_id"
     t.string   "state"
     t.integer  "iid"
+    t.string   "attachment"
   end
 
   add_index "issues", ["assignee_id"], name: "index_issues_on_assignee_id", using: :btree
diff --git a/features/support/env.rb b/features/support/env.rb
deleted file mode 100644
index a5b297775db5..000000000000
--- a/features/support/env.rb
+++ /dev/null
@@ -1,55 +0,0 @@
-require 'simplecov' unless ENV['CI']
-
-if ENV['TRAVIS']
-  require 'coveralls'
-  Coveralls.wear!
-end
-
-ENV['RAILS_ENV'] = 'test'
-require './config/environment'
-
-require 'rspec'
-require 'rspec/expectations'
-require 'database_cleaner'
-require 'spinach/capybara'
-require 'sidekiq/testing/inline'
-
-
-%w(valid_commit valid_commit_with_alt_email big_commits select2_helper test_env).each do |f|
-  require Rails.root.join('spec', 'support', f)
-end
-
-Dir["#{Rails.root}/features/steps/shared/*.rb"].each {|file| require file}
-
-WebMock.allow_net_connect!
-#
-# JS driver
-#
-require 'capybara/poltergeist'
-Capybara.javascript_driver = :poltergeist
-Capybara.register_driver :poltergeist do |app|
-    Capybara::Poltergeist::Driver.new(app, :js_errors => false, :timeout => 60)
-end
-Spinach.hooks.on_tag("javascript") do
-  ::Capybara.current_driver = ::Capybara.javascript_driver
-end
-Capybara.default_wait_time = 60
-Capybara.ignore_hidden_elements = false
-
-DatabaseCleaner.strategy = :truncation
-
-Spinach.hooks.before_scenario do
-  TestEnv.setup_stubs
-  DatabaseCleaner.start
-end
-
-Spinach.hooks.after_scenario do
-  DatabaseCleaner.clean
-end
-
-Spinach.hooks.before_run do
-  TestEnv.init(mailer: false, init_repos: true, repos: false)
-  RSpec::Mocks::setup self
-
-  include FactoryGirl::Syntax::Methods
-end
diff --git a/public/favicon.ico b/public/favicon.ico
deleted file mode 100644
index bfb74960c480..000000000000
Binary files a/public/favicon.ico and /dev/null differ