diff --git a/extensions/cookie/nsPopupWindowManager.cpp b/extensions/cookie/nsPopupWindowManager.cpp
index e4699e5411ef..237e36517475 100644
--- a/extensions/cookie/nsPopupWindowManager.cpp
+++ b/extensions/cookie/nsPopupWindowManager.cpp
@@ -54,9 +54,11 @@
  */
 
 #define POLICYSTRING "policy"
+#define CUSTOMSTRING "usecustom"
 
 static const char *sPopupPrefRoot = "privacy.popups.";
-static const char *sPopupPrefLeaf = POLICYSTRING;
+static const char *sPopupPrefPolicyLeaf = POLICYSTRING;
+static const char *sPopupPrefCustomLeaf = CUSTOMSTRING;
 static const char *sPermissionChangeNotification = PPM_CHANGE_NOTIFICATION;
 static const char *sXPCOMShutdownTopic = NS_XPCOM_SHUTDOWN_OBSERVER_ID;
 static const char *sPrefChangedTopic = NS_PREFBRANCH_PREFCHANGE_TOPIC_ID;
@@ -66,7 +68,8 @@ static const char *sPrefChangedTopic = NS_PREFBRANCH_PREFCHANGE_TOPIC_ID;
 //*****************************************************************************
 
 nsPopupWindowManager::nsPopupWindowManager() :
-  mPopupPerm(eAllow)
+  mPolicy(eAllow),
+  mCustomPermissions(PR_FALSE)
 {
   NS_INIT_ISUPPORTS();
 }
@@ -93,6 +96,8 @@ nsPopupWindowManager::Init()
      // initialize our local copy of the pref
     Observe(NS_STATIC_CAST(nsIPopupWindowManager *, this),
             sPrefChangedTopic, NS_LITERAL_STRING(POLICYSTRING).get());
+    Observe(NS_STATIC_CAST(nsIPopupWindowManager *, this),
+            sPrefChangedTopic, NS_LITERAL_STRING(CUSTOMSTRING).get());
     return ObserveThings();
   }
   return NS_ERROR_FAILURE;
@@ -105,14 +110,14 @@ nsPopupWindowManager::Init()
 NS_IMETHODIMP
 nsPopupWindowManager::GetDefaultPermission(PRUint32 *aDefaultPermission)
 {
-  return eDisallow;
+  return eAllow;
 }
 
 NS_IMETHODIMP
 nsPopupWindowManager::SetDefaultPermission(PRUint32 aDefaultPermission)
 {
-  NS_ASSERTION(aDefaultPermission == eDisallow, "whitelist not supported");
-  return aDefaultPermission == eDisallow ? NS_OK : NS_ERROR_FAILURE;
+  NS_ASSERTION(aDefaultPermission == eAllow, "whitelist not supported");
+  return aDefaultPermission == eAllow ? NS_OK : NS_ERROR_FAILURE;
 }
 
 /* Note: since we don't support whitelists, Add(uri, true) is the same thing
@@ -173,9 +178,9 @@ nsPopupWindowManager::TestPermission(nsIURI *aURI, PRUint32 *_retval)
   NS_ENSURE_ARG_POINTER(aURI);
   NS_ENSURE_ARG_POINTER(_retval);
 
-  *_retval = mPopupPerm;
+  *_retval = mPolicy;
 
-  if (mPopupPerm == eAllowConditionally) {
+  if (mPolicy == eAllow && mCustomPermissions) {
     if (mPermManager) {
       /* Because of a bug/quirk/something in the PermissionManager
          the value of blockDomain will be left unchanged if the URI
@@ -188,8 +193,7 @@ nsPopupWindowManager::TestPermission(nsIURI *aURI, PRUint32 *_retval)
       nsCAutoString uri;
       aURI->GetPrePath(uri);
       mPermManager->TestForBlocking(uri, WINDOWPERMISSION, &blockDomain);
-      if (blockDomain)
-        *_retval = eDisallow;
+      *_retval = blockDomain ? eDisallow : eAllowConditionally;
     }
   }
   return NS_OK;
@@ -228,16 +232,19 @@ nsPopupWindowManager::Observe(nsISupports *aSubject, const char *aTopic,
                               const PRUnichar *aData)
 {
   if (nsCRT::strcmp(aTopic, sPrefChangedTopic) == 0 &&
-      NS_LITERAL_STRING(POLICYSTRING).Equals(aData)) {
+        (NS_LITERAL_STRING(POLICYSTRING).Equals(aData) ||
+         NS_LITERAL_STRING(CUSTOMSTRING).Equals(aData))) {
     // refresh our local copy of the "allow popups" pref
-    mPopupPerm = eAllow;
+    PRInt32 perm = eAllow;
+    PRBool custom = PR_FALSE;
 
     if (mPopupPrefBranch) {
-      PRInt32 perm = eAllow;
-      mPopupPrefBranch->GetIntPref(sPopupPrefLeaf, &perm);
+      mPopupPrefBranch->GetIntPref(sPopupPrefPolicyLeaf, &perm);
+      mPopupPrefBranch->GetBoolPref(sPopupPrefCustomLeaf, &custom);
       NS_ASSERTION(perm >= 0, "popup pref value out of range");
-      mPopupPerm = NS_STATIC_CAST(PRUint32, perm);
     }
+    mPolicy = NS_STATIC_CAST(PRUint32, perm);
+    mCustomPermissions = custom;
   } else if (nsCRT::strcmp(aTopic, sXPCOMShutdownTopic) == 0) {
     // unhook cyclical references
     StopObservingThings();
@@ -262,8 +269,10 @@ nsPopupWindowManager::ObserveThings()
 
   if (NS_SUCCEEDED(rv)) {
     nsCOMPtr<nsIPrefBranchInternal> ibranch(do_QueryInterface(mPopupPrefBranch));
-    if (ibranch)
-      rv = ibranch->AddObserver(sPopupPrefLeaf, this, PR_FALSE);
+    if (ibranch) {
+      ibranch->AddObserver(sPopupPrefPolicyLeaf, this, PR_FALSE);
+      rv = ibranch->AddObserver(sPopupPrefCustomLeaf, this, PR_FALSE);
+    }
   }
 
   return rv;
@@ -274,8 +283,10 @@ nsresult
 nsPopupWindowManager::StopObservingThings()
 {
   nsCOMPtr<nsIPrefBranchInternal> ibranch(do_QueryInterface(mPopupPrefBranch));
-  if (ibranch)
-    ibranch->RemoveObserver(sPopupPrefLeaf, this);
+  if (ibranch) {
+    ibranch->RemoveObserver(sPopupPrefPolicyLeaf, this);
+    ibranch->RemoveObserver(sPopupPrefCustomLeaf, this);
+  }
 
   if (mOS)
     mOS->RemoveObserver(this, sXPCOMShutdownTopic);
diff --git a/extensions/cookie/nsPopupWindowManager.h b/extensions/cookie/nsPopupWindowManager.h
index 038e3aff16cc..442634f5ea6b 100644
--- a/extensions/cookie/nsPopupWindowManager.h
+++ b/extensions/cookie/nsPopupWindowManager.h
@@ -64,7 +64,8 @@ private:
   nsresult NotifyObservers();
   void     DeInitialize();
 
-  PRUint32                       mPopupPerm;
+  PRUint32                       mPolicy;
+  PRBool                         mCustomPermissions;
   nsCOMPtr<nsIObserverService>   mOS;
   nsCOMPtr<nsIPermissionManager> mPermManager;
   nsCOMPtr<nsIPrefBranch>        mPopupPrefBranch;
diff --git a/extensions/cookie/resources/content/cookieNavigatorOverlay.xul b/extensions/cookie/resources/content/cookieNavigatorOverlay.xul
index a33585d104cc..3bc725135d31 100644
--- a/extensions/cookie/resources/content/cookieNavigatorOverlay.xul
+++ b/extensions/cookie/resources/content/cookieNavigatorOverlay.xul
@@ -131,7 +131,7 @@
       try {
         var hide = pref.getBoolPref("dom.disable_open_during_load");
         if (!hide)
-          hide = pref.getIntPref("privacy.popups.policy") != Components.interfaces.nsIPopupWindowManager.eAllowConditionally;
+          hide = pref.getIntPref("privacy.popups.policy") != Components.interfaces.nsIPopupWindowManager.eAllow || !pref.getBoolPref("privacy.popups.usecustom");
         HidePopups(hide);
       } catch(e) {
         HidePopups(true);
diff --git a/modules/libpref/src/init/all.js b/modules/libpref/src/init/all.js
index cf940c60738c..5aff278d2c95 100644
--- a/modules/libpref/src/init/all.js
+++ b/modules/libpref/src/init/all.js
@@ -378,8 +378,9 @@ pref("javascript.allow.mailnews",           false);
 pref("javascript.options.strict",           false);
 pref("javascript.options.showInConsole",    true);
 
-// popups.policy values are in nsIPopupWindowManager.idl
+// popups.policy 1=allow,2=reject
 pref("privacy.popups.policy",               1);
+pref("privacy.popups.usecustom",            false);
 
 // advanced prefs
 pref("advanced.always_load_images",         true);
diff --git a/xpfe/components/permissions/content/permissionsNavigatorOverlay.xul b/xpfe/components/permissions/content/permissionsNavigatorOverlay.xul
index a33585d104cc..3bc725135d31 100644
--- a/xpfe/components/permissions/content/permissionsNavigatorOverlay.xul
+++ b/xpfe/components/permissions/content/permissionsNavigatorOverlay.xul
@@ -131,7 +131,7 @@
       try {
         var hide = pref.getBoolPref("dom.disable_open_during_load");
         if (!hide)
-          hide = pref.getIntPref("privacy.popups.policy") != Components.interfaces.nsIPopupWindowManager.eAllowConditionally;
+          hide = pref.getIntPref("privacy.popups.policy") != Components.interfaces.nsIPopupWindowManager.eAllow || !pref.getBoolPref("privacy.popups.usecustom");
         HidePopups(hide);
       } catch(e) {
         HidePopups(true);