diff --git a/examples/ansible.cfg b/examples/ansible.cfg
index 150c7262351..cfcc9464b59 100644
--- a/examples/ansible.cfg
+++ b/examples/ansible.cfg
@@ -11,7 +11,7 @@
 
 # some basic default values...
 
-hostfile       = /etc/ansible/hosts
+inventory      = /etc/ansible/hosts
 #library        = /usr/share/my_modules/
 remote_tmp     = $HOME/.ansible/tmp
 pattern        = *
diff --git a/lib/ansible/constants.py b/lib/ansible/constants.py
index 861dd5325c1..01b33ea94c2 100644
--- a/lib/ansible/constants.py
+++ b/lib/ansible/constants.py
@@ -98,7 +98,7 @@ YAML_FILENAME_EXTENSIONS = [ "", ".yml", ".yaml", ".json" ]
 DEFAULTS='defaults'
 
 # configurable things
-DEFAULT_HOST_LIST         = shell_expand_path(get_config(p, DEFAULTS, 'hostfile', 'ANSIBLE_HOSTS', '/etc/ansible/hosts'))
+DEFAULT_HOST_LIST         = shell_expand_path(get_config(p, DEFAULTS, 'inventory', 'ANSIBLE_INVENTORY', get_config(p, DEFAULTS,'hostfile','ANSIBLE_HOSTS', '/etc/ansible/hosts')))
 DEFAULT_MODULE_PATH       = get_config(p, DEFAULTS, 'library',          'ANSIBLE_LIBRARY',          None)
 DEFAULT_ROLES_PATH        = shell_expand_path(get_config(p, DEFAULTS, 'roles_path',       'ANSIBLE_ROLES_PATH',       '/etc/ansible/roles'))
 DEFAULT_REMOTE_TMP        = get_config(p, DEFAULTS, 'remote_tmp',       'ANSIBLE_REMOTE_TEMP',      '$HOME/.ansible/tmp')
diff --git a/v2/ansible/constants.py b/v2/ansible/constants.py
index 6adcdd0a9f7..1c2bc092b23 100644
--- a/v2/ansible/constants.py
+++ b/v2/ansible/constants.py
@@ -105,7 +105,7 @@ DEFAULTS='defaults'
 
 # configurable things
 DEFAULT_DEBUG             = get_config(p, DEFAULTS, 'debug',            'ANSIBLE_DEBUG',            False, boolean=True)
-DEFAULT_HOST_LIST         = shell_expand_path(get_config(p, DEFAULTS, 'hostfile', 'ANSIBLE_HOSTS', '/etc/ansible/hosts'))
+DEFAULT_HOST_LIST         = shell_expand_path(get_config(p, DEFAULTS, 'inventory', 'ANSIBLE_INVENTORY', get_config(p, DEFAULTS,'hostfile','ANSIBLE_HOSTS', '/etc/ansible/hosts')))
 DEFAULT_MODULE_PATH       = get_config(p, DEFAULTS, 'library',          'ANSIBLE_LIBRARY',          None)
 DEFAULT_ROLES_PATH        = shell_expand_path(get_config(p, DEFAULTS, 'roles_path',       'ANSIBLE_ROLES_PATH',       '/etc/ansible/roles'))
 DEFAULT_REMOTE_TMP        = get_config(p, DEFAULTS, 'remote_tmp',       'ANSIBLE_REMOTE_TEMP',      '$HOME/.ansible/tmp')