diff --git a/rhodecode/config/utils.py b/rhodecode/config/utils.py
--- a/rhodecode/config/utils.py
+++ b/rhodecode/config/utils.py
@@ -60,11 +60,14 @@ def initialize_test_environment(settings
         create_test_index)
     from rhodecode.tests import TESTS_TMP_PATH
     from rhodecode.lib.vcs.backends.hg import largefiles_store
+    from rhodecode.lib.vcs.backends.git import lfs_store
+
     # test repos
     if test_env:
         create_test_directory(TESTS_TMP_PATH)
         # large object stores
         create_test_directory(largefiles_store(TESTS_TMP_PATH))
+        create_test_directory(lfs_store(TESTS_TMP_PATH))
 
         create_test_database(TESTS_TMP_PATH, settings)
         create_test_repositories(TESTS_TMP_PATH, settings)
diff --git a/rhodecode/lib/db_manage.py b/rhodecode/lib/db_manage.py
--- a/rhodecode/lib/db_manage.py
+++ b/rhodecode/lib/db_manage.py
@@ -307,6 +307,7 @@ class DbManage(object):
         """
         settings_model = SettingsModel(sa=self.sa)
         from rhodecode.lib.vcs.backends.hg import largefiles_store
+        from rhodecode.lib.vcs.backends.git import lfs_store
 
         # Build HOOKS
         hooks = [
@@ -345,6 +346,15 @@ class DbManage(object):
 
         self.sa.add(largefiles)
 
+        # set default lfs cache dir, defaults to
+        # /repo_store_location/.cache/lfs_store
+        lfsstore = RhodeCodeUi()
+        lfsstore.ui_section = 'vcs_git_lfs'
+        lfsstore.ui_key = 'store_location'
+        lfsstore.ui_value = lfs_store(repo_store_path)
+
+        self.sa.add(lfsstore)
+
         # enable hgsubversion disabled by default
         hgsubversion = RhodeCodeUi()
         hgsubversion.ui_section = 'extensions'
diff --git a/rhodecode/lib/vcs/backends/git/__init__.py b/rhodecode/lib/vcs/backends/git/__init__.py
--- a/rhodecode/lib/vcs/backends/git/__init__.py
+++ b/rhodecode/lib/vcs/backends/git/__init__.py
@@ -21,7 +21,7 @@
 """
 GIT module
 """
-
+import os
 import logging
 
 from rhodecode.lib.vcs import connection
@@ -47,3 +47,10 @@ def discover_git_version(raise_on_exc=Fa
         if raise_on_exc:
             raise
         return ''
+
+
+def lfs_store(base_location):
+    """
+    Return a lfs store relative to base_location
+    """
+    return os.path.join(base_location, '.cache', 'lfs_store')
diff --git a/rhodecode/tests/database/conftest.py b/rhodecode/tests/database/conftest.py
--- a/rhodecode/tests/database/conftest.py
+++ b/rhodecode/tests/database/conftest.py
@@ -94,6 +94,7 @@ class DBBackend(object):
             connection_string=None):
 
         from rhodecode.lib.vcs.backends.hg import largefiles_store
+        from rhodecode.lib.vcs.backends.git import lfs_store
 
         self.fixture_store = os.path.join(self._store, self._type)
         self.db_name = db_name or self._base_db_name
@@ -103,6 +104,7 @@ class DBBackend(object):
         self._basetemp = basetemp or tempfile.gettempdir()
         self._repos_location = os.path.join(self._basetemp, 'rc_test_repos')
         self._repos_hg_largefiles_store = largefiles_store(self._basetemp)
+        self._repos_git_lfs_store = lfs_store(self._basetemp)
         self.connection_string = connection_string
 
     @property
@@ -156,10 +158,13 @@ class DBBackend(object):
         ini_params.extend(self._db_url)
         with TestINI(self._base_ini_file, ini_params,
                      self._type, destroy=True) as _ini_file:
+
             if not os.path.isdir(self._repos_location):
                 os.makedirs(self._repos_location)
             if not os.path.isdir(self._repos_hg_largefiles_store):
                 os.makedirs(self._repos_hg_largefiles_store)
+            if not os.path.isdir(self._repos_git_lfs_store):
+                os.makedirs(self._repos_git_lfs_store)
 
             self.execute(
                 "paster setup-rhodecode {0} --user=marcink "