diff -urpN busybox-1.15.0/shell/hush.c busybox-1.15.0-hush/shell/hush.c
--- busybox-1.15.0/shell/hush.c	2009-08-21 00:26:14.000000000 +0200
+++ busybox-1.15.0-hush/shell/hush.c	2009-09-05 20:08:50.000000000 +0200
@@ -58,7 +58,7 @@
  * TODOs:
  *      grep for "TODO" and fix (some of them are easy)
  *      builtins: ulimit
- *      special variables (PWD etc)
+ *      special variables (done: PWD)
  *      follow IFS rules more precisely, including update semantics
  *      export builtin should be special, its arguments are assignments
  *          and therefore expansion of them should be "one-word" expansion:
@@ -1432,6 +1432,13 @@ static int set_local_var(char *str, int 
 	return 0;
 }
 
+/* Used at startup and after each cd */
+static void set_pwd_var(int exp)
+{
+	set_local_var(xasprintf("PWD=%s", get_cwd(/*force:*/ 1)),
+		/*exp:*/ exp, /*lvl:*/ 0, /*ro:*/ 0);
+}
+
 static int unset_local_var_len(const char *name, int name_len)
 {
 	struct variable *cur;
@@ -1604,6 +1611,9 @@ static const char* setup_prompt_string(i
 		/* Set up the prompt */
 		if (promptmode == 0) { /* PS1 */
 			free((char*)G.PS1);
+			/* bash uses $PWD value, even if it is set by user.
+			 * It uses current dir only if PWD is unset.
+			 * We always use current dir. */
 			G.PS1 = xasprintf("%s %c ", get_cwd(0), (geteuid() != 0) ? '$' : '#');
 			prompt_str = G.PS1;
 		} else
@@ -6432,8 +6442,49 @@ int hush_main(int argc, char **argv)
 		}
 		e++;
 	}
+	/* reinstate HUSH_VERSION */
 	debug_printf_env("putenv '%s'\n", hush_version_str);
-	putenv((char *)hush_version_str); /* reinstate HUSH_VERSION */
+	putenv((char *)hush_version_str);
+
+	/* Export PWD */
+	set_pwd_var(/*exp:*/ 1);
+	/* bash also exports SHLVL and _,
+	 * and sets (but doesn't export) the following variables:
+	 * BASH=/bin/bash
+	 * BASH_VERSINFO=([0]="3" [1]="2" [2]="0" [3]="1" [4]="release" [5]="i386-pc-linux-gnu")
+	 * BASH_VERSION='3.2.0(1)-release'
+	 * HOSTTYPE=i386
+	 * MACHTYPE=i386-pc-linux-gnu
+	 * OSTYPE=linux-gnu
+	 * HOSTNAME=<xxxxxxxxxx>
+	 * PPID=<NNNNN>
+	 * EUID=<NNNNN>
+	 * UID=<NNNNN>
+	 * GROUPS=()
+	 * LINES=<NNN>
+	 * COLUMNS=<NNN>
+	 * BASH_ARGC=()
+	 * BASH_ARGV=()
+	 * BASH_LINENO=()
+	 * BASH_SOURCE=()
+	 * DIRSTACK=()
+	 * PIPESTATUS=([0]="0")
+	 * HISTFILE=/<xxx>/.bash_history
+	 * HISTFILESIZE=500
+	 * HISTSIZE=500
+	 * MAILCHECK=60
+	 * PATH=/usr/gnu/bin:/usr/local/bin:/bin:/usr/bin:.
+	 * SHELL=/bin/bash
+	 * SHELLOPTS=braceexpand:emacs:hashall:histexpand:history:interactive-comments:monitor
+	 * TERM=dumb
+	 * OPTERR=1
+	 * OPTIND=1
+	 * IFS=$' \t\n'
+	 * PS1='\s-\v\$ '
+	 * PS2='> '
+	 * PS4='+ '
+	 */
+
 #if ENABLE_FEATURE_EDITING
 	G.line_input_state = new_line_input_t(FOR_SHELL);
 #endif
@@ -6816,7 +6867,11 @@ static int FAST_FUNC builtin_cd(char **a
 		bb_perror_msg("cd: %s", newdir);
 		return EXIT_FAILURE;
 	}
-	get_cwd(1);
+	/* Read current dir (get_cwd(1) is inside) and set PWD.
+	 * Note: do not enforce exporting. If PWD was unset or unexported,
+	 * set it again, but do not export. bash does the same.
+	 */
+	set_pwd_var(/*exp:*/ 0);
 	return EXIT_SUCCESS;
 }