Refactoring is a hot and controversial issue. Supporters claim that it helps increasing the quality of the code, making it easier to understand, modify and maintain. Moreover, there are also claims that refactoring yields higher development productivity – however, there is only limited empirical evidence of such assumption. A case study has been conducted to assess the impact of refactoring in a close-to industrial environment. Results indicate that refactoring not only increases aspects of software quality, but also improves productivity. Our findings are applicable to small teams working in similar, highly volatile domains (ours is application development for mobile devices). However, additional research is needed to ensure that this is indeed true and to generalize it to other contexts.