How is QGIS opening a shapefile with no *.prj file?

I was wondering how QGIS could open a shapefile with no *.prj file (for instance, let's say we have a shapefile with just *.shp, *.dbf and *.shx files). If the On the fly reprojection option is activated, the layer is loaded and displayed successfully. I don't understand how such a reprojection is possible if no initial CRS is set.

Answer

QGIS has a good (in my opinion) mechanism for deciding what to do with input layers that have no coordinate system specification. You can choose one of three ways for QGIS to behave:

1. Always prompt for the correct CRS


2. Always assume that the current project CRS is correct for the input layer


3. Always use a certain default CRS that you choose

You can set which of these three is used in the Settings window, under CRS.