diff --git a/redo-ifchange.py b/redo-ifchange.py
index 4d2b51d..de73201 100755
--- a/redo-ifchange.py
+++ b/redo-ifchange.py
@@ -52,7 +52,9 @@ try:
     try:
         targets = sys.argv[1:]
         for t in targets:
-            state.add_dep(vars.TARGET, 'm', t)
+            state.add_dep(os.path.join(vars.STARTDIR, 
+                                       os.path.join(vars.PWD, vars.TARGET)),
+                          'm', t)
         rv = builder.main(targets, should_build)
     finally:
         jwack.force_return_tokens()
diff --git a/t/.gitignore b/t/.gitignore
index 3989fa7..a746a34 100644
--- a/t/.gitignore
+++ b/t/.gitignore
@@ -7,6 +7,7 @@ d
 test.args
 test2.args
 /passfail
-mode1
-makedir
-makedir.log
\ No newline at end of file
+/mode1
+/makedir
+/makedir.log
+/chdir1
diff --git a/t/chdir1.do b/t/chdir1.do
new file mode 100644
index 0000000..2f08be9
--- /dev/null
+++ b/t/chdir1.do
@@ -0,0 +1 @@
+echo hello
diff --git a/t/chdir2.do b/t/chdir2.do
new file mode 100644
index 0000000..d32f31a
--- /dev/null
+++ b/t/chdir2.do
@@ -0,0 +1,3 @@
+# make sure redo-ifchange records the dependency correctly if we chdir
+cd ..
+redo-ifchange t/chdir1
diff --git a/t/chdirtest.do b/t/chdirtest.do
new file mode 100644
index 0000000..5428534
--- /dev/null
+++ b/t/chdirtest.do
@@ -0,0 +1,9 @@
+redo chdir1
+redo chdir2
+rm -f chdir1
+. ./flush-cache.sh
+
+# chdir2 sets its dependency on chdir1 in an odd way, so this might fail if
+# redo doesn't catch it
+redo-ifchange chdir2
+[ -e chdir1 ] || exit 77
diff --git a/t/clean.do b/t/clean.do
index e4f5666..8037f29 100644
--- a/t/clean.do
+++ b/t/clean.do
@@ -1,4 +1,4 @@
 redo example/clean curse/clean deps/clean "space dir/clean"
-rm -f c c.c c.c.c c.c.c.b c.c.c.b.b d mode1 makedir.log
+rm -f c c.c c.c.c c.c.c.b c.c.c.b.b d mode1 makedir.log chdir1
 rm -f hello [by]ellow *.o *~ .*~ CC LD passfail
 rm -rf makedir
\ No newline at end of file