diff --git a/v2/build/project.jam b/v2/build/project.jam
index 735636a85..a1d669477 100644
--- a/v2/build/project.jam
+++ b/v2/build/project.jam
@@ -601,8 +601,29 @@ module project-rules
         import project ;
         
         local location = [ project.attribute $(__name__) source-location ] ;
-        local all-paths = [ path.glob $(location) : $(wildcards) ] ;
-        return $(all-paths:D="") ;
+
+        local all-paths ;
+        if ! $(wildcards:D)
+        {
+            # No directory in any wildcard -- the simplest case.
+            all-paths = [ path.glob $(location) : $(wildcards) ] ;
+            all-paths = $(all-paths:D="") ;
+        } 
+        else
+        {
+            for local w in $(wildcards)
+            {
+                local l = [ path.join $(location) $(w:D) ] ;
+                local paths = [ path.glob $(l) : $(w:D="") ] ;                
+                for local p in $(paths)
+                {
+                    all-paths += [ path.relative $(p) $(location) ] ;
+                }                
+            }
+            
+        }
+
+        return $(all-paths) ;                
     }        
 }
 
diff --git a/v2/test/glob.py b/v2/test/glob.py
index cd8f67544..aaf400e87 100644
--- a/v2/test/glob.py
+++ b/v2/test/glob.py
@@ -62,5 +62,30 @@ exe a : [ glob *.cpp ] ../d2/d//l ;
 t.run_build_system(subdir="d1")
 t.expect_addition("d1/bin/$toolset/debug/a.exe")
 
+# Test that wildcards can include directories
+t.rm("d1")
+
+t.write("d1/src/foo/a.cpp", """
+void bar();
+int main() { bar(); return 0; }
+
+""")
+
+t.write("d1/src/bar/b.cpp", """
+void bar() {}
+
+""")
+
+
+t.write("d1/Jamfile", """
+project : source-location src ;
+exe a : [ glob foo/*.cpp bar/*.cpp ] ../d2/d//l ; 
+""")
+
+t.run_build_system(subdir="d1")
+t.expect_addition("d1/bin/$toolset/debug/a.exe")
+
+
+
 
 t.cleanup()