diff --git a/Code/Editor/WelcomeScreen/DefaultActiveProject.png b/Code/Editor/WelcomeScreen/DefaultActiveProject.png
deleted file mode 100644
index 89c3a7cd47..0000000000
--- a/Code/Editor/WelcomeScreen/DefaultActiveProject.png
+++ /dev/null
@@ -1,3 +0,0 @@
-version https://git-lfs.github.com/spec/v1
-oid sha256:263e95489560dac6e5944ef3caba13e598f83ddead324b943ad7735ba015e1a9
-size 70727
diff --git a/Code/Editor/WelcomeScreen/DefaultProjectImage.png b/Code/Editor/WelcomeScreen/DefaultProjectImage.png
new file mode 100644
index 0000000000..82234dbf6b
--- /dev/null
+++ b/Code/Editor/WelcomeScreen/DefaultProjectImage.png
@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
+oid sha256:1cf8339fb51f82a68d2ab475c0476960e75a79d96d239c5b7cd272fbe4990ffe
+size 2770
diff --git a/Code/Editor/WelcomeScreen/WelcomeScreenDialog.cpp b/Code/Editor/WelcomeScreen/WelcomeScreenDialog.cpp
index a444b95132..f9560aef55 100644
--- a/Code/Editor/WelcomeScreen/WelcomeScreenDialog.cpp
+++ b/Code/Editor/WelcomeScreen/WelcomeScreenDialog.cpp
@@ -75,6 +75,21 @@ WelcomeScreenDialog::WelcomeScreenDialog(QWidget* pParent)
 {
     ui->setupUi(this);
 
+    // Set the project preview image
+    QString projectPreviewPath = QDir(AZ::Utils::GetProjectPath().c_str()).filePath("preview.png");
+    QFileInfo projectPreviewPathInfo(projectPreviewPath);
+    if (!projectPreviewPathInfo.exists() || !projectPreviewPathInfo.isFile())
+    {
+        projectPreviewPath = ":/WelcomeScreenDialog/DefaultProjectImage.png";
+    }
+    ui->activeProjectIcon->setPixmap(
+        QPixmap(projectPreviewPath).scaled(
+            ui->activeProjectIcon->size(),
+            Qt::KeepAspectRatioByExpanding,
+            Qt::SmoothTransformation
+        )
+    );
+
     ui->recentLevelTable->setColumnCount(3);
     ui->recentLevelTable->setMouseTracking(true);
     ui->recentLevelTable->setContextMenuPolicy(Qt::CustomContextMenu);
diff --git a/Code/Editor/WelcomeScreen/WelcomeScreenDialog.qrc b/Code/Editor/WelcomeScreen/WelcomeScreenDialog.qrc
index 9e8ff62f48..131fde4e2b 100644
--- a/Code/Editor/WelcomeScreen/WelcomeScreenDialog.qrc
+++ b/Code/Editor/WelcomeScreen/WelcomeScreenDialog.qrc
@@ -1,5 +1,5 @@
 <RCC>
   <qresource prefix="WelcomeScreenDialog">
-    <file>DefaultActiveProject.png</file>
+    <file>DefaultProjectImage.png</file>
   </qresource>
 </RCC>
diff --git a/Code/Editor/WelcomeScreen/WelcomeScreenDialog.ui b/Code/Editor/WelcomeScreen/WelcomeScreenDialog.ui
index 680b411121..c8f5a4d67c 100644
--- a/Code/Editor/WelcomeScreen/WelcomeScreenDialog.ui
+++ b/Code/Editor/WelcomeScreen/WelcomeScreenDialog.ui
@@ -158,11 +158,8 @@
               <property name="text">
                <string/>
               </property>
-              <property name="pixmap">
-               <pixmap resource="WelcomeScreenDialog.qrc">:/WelcomeScreenDialog/DefaultActiveProject.png</pixmap>
-              </property>
               <property name="alignment">
-               <set>Qt::AlignCenter</set>
+               <set>Qt::AlignHCenter | Qt::AlignVCenter</set>
               </property>
              </widget>
             </item>