diff --git a/glance/registry/db/models.py b/glance/registry/db/models.py
index df83af80de..fc256b7f48 100644
--- a/glance/registry/db/models.py
+++ b/glance/registry/db/models.py
@@ -103,7 +103,7 @@ class Image(BASE, ModelBase):
 
     @validates('type')
     def validate_type(self, key, type):
-        if not type in ('machine', 'kernel', 'ramdisk', 'raw'):
+        if not type in ('machine', 'kernel', 'ramdisk', 'raw', 'vhd'):
             raise exception.Invalid(
                 "Invalid image type '%s' for image." % type)
         return type
diff --git a/glance/server.py b/glance/server.py
index ecc6fe2b20..3b3b99e57f 100644
--- a/glance/server.py
+++ b/glance/server.py
@@ -341,7 +341,13 @@ def create(self, req):
                 location = req.headers['x-image-meta-location']
                 self._activate(req, image_meta, location)
 
-        return dict(image=image_meta)
+        # APP states we should return a Location: header with the edit
+        # URI of the resource newly-created.
+        res = Response(request=req, body=json.dumps(dict(image=image_meta)),
+                       content_type="text/plain")
+        res.headers.add('Location', "/images/%s" % image_meta['id'])
+
+        return req.get_response(res)
 
     def update(self, req, id):
         """
diff --git a/tests/unit/test_api.py b/tests/unit/test_api.py
index 857b72a0d5..51c7309fdd 100644
--- a/tests/unit/test_api.py
+++ b/tests/unit/test_api.py
@@ -288,6 +288,14 @@ def test_add_image_basic_file_store(self):
         self.assertEquals(res_body['location'],
                           'file:///tmp/glance-tests/3')
 
+        # Test that the Location: header is set to the URI to
+        # edit the newly-created image, as required by APP.
+        # See LP Bug #719825
+        self.assertTrue('location' in res.headers,
+                        "'location' not in response headers.\n"
+                        "res.headerlist = %r" % res.headerlist)
+        self.assertTrue('/images/3' in res.headers['location'])
+
     def test_image_meta(self):
         """Test for HEAD /images/<ID>"""
         expected_headers = {'x-image-meta-id': 2,