diff --git a/README.md b/README.md
index 74c971c0d3..979e4ef88a 100644
--- a/README.md
+++ b/README.md
@@ -37,7 +37,8 @@ $ cargo xtask install
 $ cargo xtask install --server
 ```
 
-For non-standard setup of VS Code and other editors, see [./docs/user](./docs/user).
+For non-standard setup of VS Code and other editors, or if the language server
+cannot start, see [./docs/user](./docs/user).
 
 ## Documentation
 
diff --git a/docs/user/README.md b/docs/user/README.md
index 5ec8fb25d1..04c3493426 100644
--- a/docs/user/README.md
+++ b/docs/user/README.md
@@ -204,4 +204,19 @@ Installation:
 
 * You can now invoke the command palette and type LSP enable to locally/globally enable the rust-analyzer LSP (type LSP enable, then choose either locally or globally, then select rust-analyzer)
 
-* Note that `ra_lsp_server` binary must be in `$PATH` for this to work. If it's not the case, you can specify full path to the binary, which is typically `.cargo/bin/ra_lsp_server`.
+### Setting up the `PATH` variable
+
+On Unix systems, `rustup` adds `~/.cargo/bin` to `PATH` by modifying the shell's
+startup file. Depending on your configuration, your Desktop Environment might not
+actually load it. If you find that `rust-analyzer` only runs when starting the
+editor from the terminal, you will have to set up your `PATH` variable manually.
+
+There are a couple of ways to do that:
+
+- for Code, set `rust-analyzer.raLspServerPath` to `~/.cargo/bin` (the `~` is
+  automatically resolved by the extension)
+- copy the binary to a location that is already in `PATH`, e.g. `/usr/local/bin`
+- on Linux, use PAM to configure the `PATH` variable, by e.g. putting
+  `PATH DEFAULT=/usr/local/bin:/usr/bin:/usr/local/sbin:/usr/sbin:@{HOME}/.cargo/bin:@{HOME}/.local/bin`
+  in your `~/.pam_environment` file; note that this might interfere with other
+  defaults set by the system administrator via `/etc/environment`.
diff --git a/editors/code/package-lock.json b/editors/code/package-lock.json
index 2ceac60a09..099aaaaa2a 100644
--- a/editors/code/package-lock.json
+++ b/editors/code/package-lock.json
@@ -763,6 +763,11 @@
                 "chalk": "^2.0.1"
             }
         },
+        "lookpath": {
+            "version": "1.0.3",
+            "resolved": "https://registry.npmjs.org/lookpath/-/lookpath-1.0.3.tgz",
+            "integrity": "sha512-XIdgzlX26g10XnzyZdO/4obybEmfGnZyWQZ2DgmmEfVB79X+n3lhUoIzMe501C6s7RmCpAo66OPegWc+CsxYMg=="
+        },
         "magic-string": {
             "version": "0.25.3",
             "resolved": "https://registry.npmjs.org/magic-string/-/magic-string-0.25.3.tgz",
diff --git a/editors/code/package.json b/editors/code/package.json
index 94887674ba..5dea8fac0a 100644
--- a/editors/code/package.json
+++ b/editors/code/package.json
@@ -31,6 +31,7 @@
         "singleQuote": true
     },
     "dependencies": {
+        "lookpath": "^1.0.3",
         "seedrandom": "^3.0.1",
         "vscode-languageclient": "^5.3.0-next.4"
     },
diff --git a/editors/code/src/extension.ts b/editors/code/src/extension.ts
index 683497dfd4..6637c3bf0b 100644
--- a/editors/code/src/extension.ts
+++ b/editors/code/src/extension.ts
@@ -14,7 +14,7 @@ import * as events from './events';
 import * as notifications from './notifications';
 import { Server } from './server';
 
-export function activate(context: vscode.ExtensionContext) {
+export async function activate(context: vscode.ExtensionContext) {
     function disposeOnDeactivation(disposable: vscode.Disposable) {
         context.subscriptions.push(disposable);
     }
@@ -159,7 +159,11 @@ export function activate(context: vscode.ExtensionContext) {
     });
 
     // Start the language server, finally!
-    startServer();
+    try {
+        await startServer();
+    } catch (e) {
+        vscode.window.showErrorMessage(e.message);
+    }
 
     if (Server.config.displayInlayHints) {
         const hintsUpdater = new HintsUpdater();
@@ -204,10 +208,10 @@ export function deactivate(): Thenable<void> {
     return Server.client.stop();
 }
 
-async function reloadServer(startServer: () => void) {
+async function reloadServer(startServer: () => Promise<void>) {
     if (Server.client != null) {
         vscode.window.showInformationMessage('Reloading rust-analyzer...');
         await Server.client.stop();
-        startServer();
+        await startServer();
     }
 }
diff --git a/editors/code/src/server.ts b/editors/code/src/server.ts
index 7907b70bc5..e717ab294d 100644
--- a/editors/code/src/server.ts
+++ b/editors/code/src/server.ts
@@ -1,3 +1,4 @@
+import { lookpath } from 'lookpath';
 import { homedir } from 'os';
 import * as lc from 'vscode-languageclient';
 
@@ -17,7 +18,7 @@ export class Server {
     public static config = new Config();
     public static client: lc.LanguageClient;
 
-    public static start(
+    public static async start(
         notificationHandlers: Iterable<[string, lc.GenericNotificationHandler]>
     ) {
         // '.' Is the fallback if no folder is open
@@ -27,8 +28,14 @@ export class Server {
             folder = workspace.workspaceFolders[0].uri.fsPath.toString();
         }
 
+        const command = expandPathResolving(this.config.raLspServerPath);
+        if (!(await lookpath(command))) {
+            throw new Error(
+                `Cannot find rust-analyzer server \`${command}\` in PATH.`
+            );
+        }
         const run: lc.Executable = {
-            command: expandPathResolving(this.config.raLspServerPath),
+            command,
             options: { cwd: folder }
         };
         const serverOptions: lc.ServerOptions = {