Index: source/blender/editors/space_outliner/outliner_ops.c
===================================================================
--- source/blender/editors/space_outliner/outliner_ops.c	(revision 43782)
+++ source/blender/editors/space_outliner/outliner_ops.c	(working copy)
@@ -80,6 +80,7 @@
 
 	WM_operatortype_append(OUTLINER_OT_parent_drop);
 	WM_operatortype_append(OUTLINER_OT_parent_clear);
+	WM_operatortype_append(OUTLINER_OT_drop_named_material);
 }
 
 void outliner_keymap(wmKeyConfig *keyconf)
Index: source/blender/editors/space_outliner/outliner_intern.h
===================================================================
--- source/blender/editors/space_outliner/outliner_intern.h	(revision 43782)
+++ source/blender/editors/space_outliner/outliner_intern.h	(working copy)
@@ -188,7 +188,7 @@
 
 void item_rename_cb(struct bContext *C, struct Scene *scene, TreeElement *te, struct TreeStoreElem *tsep, struct TreeStoreElem *tselem);
 
-TreeElement *outliner_dropzone_parent(struct bContext *C, struct wmEvent *event, struct TreeElement *te, float *fmval);
+TreeElement *outliner_dropzone_object(struct bContext *C, struct wmEvent *event, struct TreeElement *te, float *fmval);
 int outliner_dropzone_parent_clear(struct bContext *C, struct wmEvent *event, struct TreeElement *te, float *fmval);
 
 /* ...................................................... */
@@ -220,6 +220,7 @@
 
 void OUTLINER_OT_parent_drop(struct wmOperatorType *ot);
 void OUTLINER_OT_parent_clear(struct wmOperatorType *ot);
+void OUTLINER_OT_drop_named_material(struct wmOperatorType *ot);
 
 /* outliner_tools.c ---------------------------------------------- */
 
Index: source/blender/editors/space_outliner/outliner_edit.c
===================================================================
--- source/blender/editors/space_outliner/outliner_edit.c	(revision 43782)
+++ source/blender/editors/space_outliner/outliner_edit.c	(working copy)
@@ -75,6 +75,7 @@
 #include "BKE_group.h"
 #include "BKE_library.h"
 #include "BKE_main.h"
+#include "BKE_material.h"
 #include "BKE_modifier.h"
 #include "BKE_report.h"
 #include "BKE_scene.h"
@@ -1447,8 +1448,9 @@
 	return OPERATOR_FINISHED;
 }
 
-/* Used for drag and drop parenting */
-TreeElement *outliner_dropzone_parent(bContext *C, wmEvent *event, TreeElement *te, float *fmval)
+/* Used for drag and drop parenting         */
+/* Returns TreeElement under mouse if ID_OB */
+TreeElement *outliner_dropzone_object(bContext *C, wmEvent *event, TreeElement *te, float *fmval)
 {
 	SpaceOops *soops= CTX_wm_space_outliner(C);
 	TreeStoreElem *tselem= TREESTORE(te);
@@ -1470,7 +1472,7 @@
 	if ((tselem->flag & TSE_CLOSED)==0 && (te->subtree.first)) {
 		for (te = te->subtree.first; te; te = te->next) {
 			TreeElement *te_valid;
-			te_valid= outliner_dropzone_parent(C, event, te, fmval);
+			te_valid= outliner_dropzone_object(C, event, te, fmval);
 			if (te_valid) return te_valid;
 		}
 	}
@@ -1495,7 +1497,7 @@
 
 	/* Find object hovered over */
 	for (te= soops->tree.first; te; te= te->next) {
-		te_found= outliner_dropzone_parent(C, event, te, fmval);
+		te_found= outliner_dropzone_object(C, event, te, fmval);
 		if (te_found) break;
 	}
 
@@ -1704,3 +1706,60 @@
 	RNA_def_string(ot->srna, "dragged_obj", "Object", MAX_ID_NAME, "Child", "Child Object");
 	RNA_def_enum(ot->srna, "type", prop_clear_parent_types, 0, "Type", "");
 }
+
+static int drop_named_material_invoke(bContext *C, wmOperator *op, wmEvent *event)
+{
+	SpaceOops *soops= CTX_wm_space_outliner(C);
+	Main *bmain= CTX_data_main(C);
+	ARegion *ar= CTX_wm_region(C);
+	TreeElement *te = NULL;
+	TreeElement *te_found = NULL;
+	Object *ob = NULL;
+	Material *ma = NULL;
+	float fmval[2];
+	char name[MAX_ID_NAME-2];
+	
+	UI_view2d_region_to_view(&ar->v2d, event->mval[0], event->mval[1], &fmval[0], &fmval[1]);
+
+	/* Find object under mouse*/
+	for (te= soops->tree.first; te; te= te->next) {
+		te_found= outliner_dropzone_object(C, event, te, fmval);
+		if (te_found) break;
+	}
+	
+	RNA_string_get(op->ptr, "name", name);
+	ma= (Material *)find_id("MA", name);
+	ob= (Object *)find_id("OB", te_found->name);
+	if(ob==NULL || ma==NULL) 
+		return OPERATOR_CANCELLED;
+	
+	assign_material(ob, ma, 1);
+	
+	DAG_ids_flush_update(bmain, 0);
+
+	WM_event_add_notifier(C, NC_OBJECT|ND_OB_SHADING, ob);
+	WM_event_add_notifier(C, NC_OBJECT|ND_DRAW, ob);
+	WM_event_add_notifier(C, NC_SPACE|ND_SPACE_VIEW3D, NULL);
+	
+	return OPERATOR_FINISHED;
+}
+
+/* assigns to object under cursor, only first material slot */
+void OUTLINER_OT_drop_named_material(wmOperatorType *ot)
+{
+
+	/* identifiers */
+	ot->name= "Drop Named Material on Object";
+	ot->description = "";
+	ot->idname= "OUTLINER_OT_drop_named_material";
+	
+	/* api callbacks */
+	ot->invoke= drop_named_material_invoke;
+	ot->poll= ED_operator_outliner_active;
+	
+	/* flags */
+	ot->flag= OPTYPE_REGISTER|OPTYPE_UNDO;
+	
+	/* properties */
+	RNA_def_string(ot->srna, "name", "Material", MAX_ID_NAME-2, "Name", "Material name to assign");
+}
Index: source/blender/editors/space_outliner/space_outliner.c
===================================================================
--- source/blender/editors/space_outliner/space_outliner.c	(revision 43782)
+++ source/blender/editors/space_outliner/space_outliner.c	(working copy)
@@ -34,12 +34,15 @@
 
 #include "MEM_guardedalloc.h"
 
+#include "DNA_object_types.h"
+
 #include "BLI_blenlib.h"
 #include "BLI_math.h"
 #include "BLI_rand.h"
 #include "BLI_utildefines.h"
 
 #include "BKE_context.h"
+#include "BKE_library.h"
 #include "BKE_screen.h"
 
 #include "ED_space_api.h"
@@ -90,7 +93,7 @@
 			/* Find object hovered over */
 			for(te= soops->tree.first; te; te= te->next) {
 				TreeElement *te_valid;
-				te_valid= outliner_dropzone_parent(C, event, te, fmval);
+				te_valid= outliner_dropzone_object(C, event, te, fmval);
 				if(te_valid) return 1;
 			}
 		}
@@ -144,6 +147,38 @@
 	RNA_enum_set(drop->ptr, "type", 0);
 }
 
+static int outliner_mat_drop_poll(bContext *C, wmDrag *drag, wmEvent *event)
+{
+	ARegion *ar= CTX_wm_region(C);
+	SpaceOops *soops= CTX_wm_space_outliner(C);
+	TreeElement *te= NULL;
+	float fmval[2];
+	UI_view2d_region_to_view(&ar->v2d, event->mval[0], event->mval[1], &fmval[0], &fmval[1]);
+
+	if(drag->type==WM_DRAG_ID) {
+		ID *id= (ID *)drag->poin;
+		if( GS(id->name)==ID_MA ) {
+			/* Ensure item under cursor is valid drop target */
+			/* Find object under cursor*/
+			for(te= soops->tree.first; te; te= te->next) {
+				TreeElement *te_valid;
+				te_valid= outliner_dropzone_object(C, event, te, fmval);
+				if(te_valid && OB_TYPE_SUPPORT_MATERIAL(((Object *)find_id("OB", te_valid->name))->type))
+					return 1;
+			}
+		}
+	}
+	return 0;
+}
+
+/* TODO: Merge outliner_parent_drop_copy with this to avoid duplication. */
+static void outliner_id_drop_copy(wmDrag *drag, wmDropBox *drop)
+{
+	ID *id= (ID *)drag->poin;
+	
+	RNA_string_set(drop->ptr, "name", id->name+2);
+}
+
 /* region dropbox definition */
 static void outliner_dropboxes(void)
 {
@@ -151,6 +186,7 @@
 
 	WM_dropbox_add(lb, "OUTLINER_OT_parent_drop", outliner_parent_drop_poll, outliner_parent_drop_copy);
 	WM_dropbox_add(lb, "OUTLINER_OT_parent_clear", outliner_parent_clear_poll, outliner_parent_clear_copy);
+	WM_dropbox_add(lb, "OUTLINER_OT_drop_named_material", outliner_mat_drop_poll, outliner_id_drop_copy);
 }
 
 static void outliner_main_area_draw(const bContext *C, ARegion *ar)