diff --git a/navalplanner-business/src/main/java/org/navalplanner/business/materials/entities/MaterialCategory.java b/navalplanner-business/src/main/java/org/navalplanner/business/materials/entities/MaterialCategory.java
index a524c0f0c..1a6ff546d 100644
--- a/navalplanner-business/src/main/java/org/navalplanner/business/materials/entities/MaterialCategory.java
+++ b/navalplanner-business/src/main/java/org/navalplanner/business/materials/entities/MaterialCategory.java
@@ -30,9 +30,11 @@ import java.util.Set;
 import org.apache.commons.lang.StringUtils;
 import org.hibernate.validator.AssertTrue;
 import org.hibernate.validator.NotEmpty;
+import org.hibernate.validator.NotNull;
 import org.hibernate.validator.Valid;
 import org.navalplanner.business.common.IntegrationEntity;
 import org.navalplanner.business.common.Registry;
+import org.navalplanner.business.common.entities.EntitySequence;
 import org.navalplanner.business.common.exceptions.InstanceNotFoundException;
 import org.navalplanner.business.materials.daos.IMaterialCategoryDAO;
 
@@ -53,6 +55,17 @@ public class MaterialCategory extends IntegrationEntity {
         return result;
     }
 
+    public static List<Material> getAllMaterialsWithoutAutogeneratedCodeFrom(
+            Collection<? extends MaterialCategory> categories) {
+        List<Material> result = new ArrayList<Material>();
+        for (MaterialCategory each : categories) {
+            if (!each.isCodeAutogenerated()) {
+                result.addAll(each.getMaterials());
+            }
+        }
+        return result;
+    }
+
     @NotEmpty
     private String name;
 
@@ -64,6 +77,8 @@ public class MaterialCategory extends IntegrationEntity {
     @Valid
     private Set<Material> materials = new HashSet<Material>();
 
+    private Integer lastMaterialSequenceCode = 0;
+
     // Default constructor, needed by Hibernate
     protected MaterialCategory() {
 
@@ -247,4 +262,32 @@ public class MaterialCategory extends IntegrationEntity {
         }
         return result;
     }
+
+    public void generateMaterialCodes(int numberOfDigits) {
+        for (Material material : this.getMaterials()) {
+            if ((material.getCode() == null) || (material.getCode().isEmpty())
+                    || (!material.getCode().startsWith(this.getCode()))) {
+                this.incrementLastMaterialSequenceCode();
+                String materialCode = EntitySequence.formatValue(
+                        numberOfDigits, this.getLastMaterialSequenceCode());
+                material
+                        .setCode(this.getCode()
+                                + EntitySequence.CODE_SEPARATOR_CHILDREN
+                                + materialCode);
+            }
+        }
+    }
+
+    public void incrementLastMaterialSequenceCode() {
+        if (this.lastMaterialSequenceCode == null) {
+            this.lastMaterialSequenceCode = 0;
+        }
+        this.lastMaterialSequenceCode++;
+    }
+
+    @NotNull(message = "last material sequence code not specified")
+    public Integer getLastMaterialSequenceCode() {
+        return lastMaterialSequenceCode;
+    }
+
 }
diff --git a/navalplanner-business/src/main/resources/org/navalplanner/business/materials/entities/Materials.hbm.xml b/navalplanner-business/src/main/resources/org/navalplanner/business/materials/entities/Materials.hbm.xml
index 00ae17904..4e3733618 100644
--- a/navalplanner-business/src/main/resources/org/navalplanner/business/materials/entities/Materials.hbm.xml
+++ b/navalplanner-business/src/main/resources/org/navalplanner/business/materials/entities/Materials.hbm.xml
@@ -62,6 +62,8 @@
 
     <property name="codeAutogenerated" not-null="true" />
 
+	<property name="lastMaterialSequenceCode" access="field" not-null="true"/>
+
     <!-- Indexed the other side -->
     <set name="subcategories" inverse="true" cascade="all-delete-orphan">
         <key column="PARENT_ID"/>
diff --git a/navalplanner-webapp/src/main/java/org/navalplanner/web/materials/MaterialsController.java b/navalplanner-webapp/src/main/java/org/navalplanner/web/materials/MaterialsController.java
index 99b90df33..067101a48 100644
--- a/navalplanner-webapp/src/main/java/org/navalplanner/web/materials/MaterialsController.java
+++ b/navalplanner-webapp/src/main/java/org/navalplanner/web/materials/MaterialsController.java
@@ -250,6 +250,7 @@ public class MaterialsController extends
                     codeTb.setValue(materialCategory.getCode());
                     codeTb.setDisabled(ce.isChecked());
                     Util.reloadBindings(codeTb);
+                    Util.reloadBindings(gridMaterials);
                 }
             });
             Treecell generateCodeTc = new Treecell();
diff --git a/navalplanner-webapp/src/main/java/org/navalplanner/web/materials/MaterialsModel.java b/navalplanner-webapp/src/main/java/org/navalplanner/web/materials/MaterialsModel.java
index 8a8b58154..8c7bf9107 100644
--- a/navalplanner-webapp/src/main/java/org/navalplanner/web/materials/MaterialsModel.java
+++ b/navalplanner-webapp/src/main/java/org/navalplanner/web/materials/MaterialsModel.java
@@ -85,6 +85,8 @@ public class MaterialsModel extends IntegrationEntityModel implements
 
     private Map<MaterialCategory, String> oldCodes = new HashMap<MaterialCategory, String>();
 
+    private Map<Material, String> oldMaterialCodes = new HashMap<Material, String>();
+
     @Override
     @Transactional(readOnly = true)
     public MutableTreeModel<MaterialCategory> getMaterialCategories() {
@@ -107,10 +109,16 @@ public class MaterialsModel extends IntegrationEntityModel implements
             initializeMaterials(materialCategory.getMaterials());
             materialCategories.addToRoot(materialCategory);
             addCategories(materialCategory, materialCategory.getSubcategories());
+            storeOldCodes(materialCategory);
+        }
+    }
 
-            // it stores temporaly the autogenerated code.
-            if (materialCategory.isCodeAutogenerated()) {
-                oldCodes.put(materialCategory, materialCategory.getCode());
+    private void storeOldCodes(MaterialCategory materialCategory) {
+        // it stores temporaly the autogenerated code.
+        if (materialCategory.isCodeAutogenerated()) {
+            oldCodes.put(materialCategory, materialCategory.getCode());
+            for (Material child : materialCategory.getMaterials()) {
+                oldMaterialCodes.put(child, child.getCode());
             }
         }
     }
@@ -128,6 +136,7 @@ public class MaterialsModel extends IntegrationEntityModel implements
         for (MaterialCategory category: categories) {
             initializeMaterials(category.getMaterials());
             materialCategories.add(materialCategory, category);
+            storeOldCodes(category);
             final Set<MaterialCategory> subcategories = category.getSubcategories();
             if (subcategories != null) {
                 addCategories(category, subcategories);
@@ -233,15 +242,24 @@ public class MaterialsModel extends IntegrationEntityModel implements
     public void confirmSave() throws ValidationException {
         final List<MaterialCategory> categories = materialCategories.asList();
         checkNoCodeRepeatedAtNewMaterials(categories);
+        Integer numberOfDigits = getNumberOfDigitsCode();
         for (MaterialCategory each: categories) {
+            generateMaterialCodesIfIsNecessary(each, numberOfDigits);
             categoryDAO.save(each);
         }
     }
 
+    private void generateMaterialCodesIfIsNecessary(MaterialCategory category,
+            Integer numberOfDigits) {
+        if (category.isCodeAutogenerated()) {
+            category.generateMaterialCodes(numberOfDigits);
+        }
+    }
+
     private void checkNoCodeRepeatedAtNewMaterials(
             final List<MaterialCategory> categories) throws ValidationException {
         List<Material> allMaterials = MaterialCategory
-                .getAllMaterialsFrom(categories);
+                .getAllMaterialsWithoutAutogeneratedCodeFrom(categories);
         Map<String, Material> byCode = new HashMap<String, Material>();
         for (Material each : allMaterials) {
             if (byCode.containsKey(each.getCode())) {
@@ -307,6 +325,12 @@ public class MaterialsModel extends IntegrationEntityModel implements
     @Override
     protected void restoreOldCodes() {
         getCurrentEntity().setCode(oldCodes.get(getCurrentEntity()));
+        for (Material child : ((MaterialCategory) getCurrentEntity())
+                .getMaterials()) {
+            if (!child.isNewObject()) {
+                child.setCode(oldMaterialCodes.get(child));
+            }
+        }
     }
 
     public void setCodeAutogenerated(boolean codeAutogenerated,
diff --git a/navalplanner-webapp/src/main/webapp/materials/materials.zul b/navalplanner-webapp/src/main/webapp/materials/materials.zul
index 82a6b24fe..92a9d0a6b 100644
--- a/navalplanner-webapp/src/main/webapp/materials/materials.zul
+++ b/navalplanner-webapp/src/main/webapp/materials/materials.zul
@@ -89,6 +89,7 @@
                         <rows>
                             <row self="@{each='material'}" value="@{material}" >
                                 <textbox id="code" value="@{material.code}" width="95%"
+                                    disabled="@{material.category.codeAutogenerated}"
                                     constraint="no empty:${i18n:_('cannot be null or empty')}" />
                                 <textbox value="@{material.description}" width="95%" />
                                 <doublebox value="@{material.defaultUnitPrice}" />