diff --git a/source/dub/generators/visuald.d b/source/dub/generators/visuald.d
index 6db18ab..7f45122 100644
--- a/source/dub/generators/visuald.d
+++ b/source/dub/generators/visuald.d
@@ -157,7 +157,9 @@
 			auto ret = appender!(char[])();
 
 			auto root_package_path = m_project.rootPackage.path;
-			auto project_file_dir = root_package_path ~ projFileName(packname).parentPath;
+			auto basepath = NativePath(".dub/");
+			if (!isWritableDir(basepath, true))
+				throw new Exception(".dub is not writeable");
 			ret.put("<DProject>\n");
 			ret.formattedWrite("  <ProjectGuid>%s</ProjectGuid>\n", guid(packname));
 
@@ -185,7 +187,7 @@
 				auto sp = NativePath(s);
 				assert(sp.absolute, format("Source path in %s expected to be absolute: %s", packname, s));
 				//if( !sp.absolute ) sp = pack.path ~ sp;
-				addSourceFile(sp.relativeTo(project_file_dir), determineStructurePath(sp, targets[packname]), action);
+				addSourceFile(sp.relativeTo(getWorkingDirectory() ~ basepath), determineStructurePath(sp, targets[packname]), action);
 			}
 
 			foreach (p; targets[packname].packages)
@@ -242,9 +244,6 @@
 			ret.put("\n  </Folder>\n</DProject>");
 
 			logDebug("About to write to '%s.visualdproj' file %s bytes", getPackageFileName(packname), ret.data.length);
-			auto basepath = NativePath(".dub/");
-			if (!isWritableDir(basepath, true))
-				throw new Exception(".dub is not writeable");
 			auto proj = openFile(projFileName(packname), FileMode.createTrunc);
 			scope(exit) proj.close();
 			proj.put(ret.data);
@@ -253,8 +252,8 @@
 
 		void generateProjectConfiguration(Appender!(char[]) ret, string pack, string type, GeneratorSettings settings, in TargetInfo[string] targets)
 		{
-			auto project_file_dir = m_project.rootPackage.path ~ projFileName(pack).parentPath;
 			auto buildsettings = targets[pack].buildSettings.dup;
+			auto basepath = NativePath(".dub/");
 
 			string[] getSettings(string setting)(){ return __traits(getMember, buildsettings, setting); }
 			string[] getPathSettings(string setting)()
@@ -263,7 +262,7 @@
 				auto ret = new string[settings.length];
 				foreach (i; 0 .. settings.length) {
 					// \" is interpreted as an escaped " by cmd.exe, so we need to avoid that
-					auto p = NativePath(settings[i]).relativeTo(project_file_dir);
+					auto p = NativePath(settings[i]).relativeTo(getWorkingDirectory() ~ basepath);
 					p.endsWithSlash = false;
 					ret[i] = '"' ~ p.toNativeString() ~ '"';
 				}
@@ -336,7 +335,7 @@
 				// compute directory for intermediate files (need dummy/ because of how -op determines the resulting path)
 				size_t ndummy = 0;
 				foreach (f; buildsettings.sourceFiles) {
-					auto rpath = NativePath(f).relativeTo(project_file_dir);
+					auto rpath = NativePath(f).relativeTo(getWorkingDirectory() ~ basepath);
 					size_t nd = 0;
 					foreach (s; rpath.bySegment)
 						if (s == "..")
@@ -431,7 +430,7 @@
 				auto wdir = NativePath(buildsettings.workingDirectory);
 				if (!wdir.absolute) wdir = m_project.rootPackage.path ~ wdir;
 				ret.formattedWrite("    <debugworkingdir>%s</debugworkingdir>\n",
-					wdir.relativeTo(project_file_dir).toNativeString());
+					wdir.relativeTo(getWorkingDirectory() ~ basepath).toNativeString());
 				ret.put("    <preBuildCommand />\n");
 				ret.put("    <postBuildCommand />\n");
 				ret.put("    <filesToClean>*.obj;*.cmd;*.build;*.dep</filesToClean>\n");
diff --git a/test/issue1477-subpackage-visuald-paths.sh b/test/issue1477-subpackage-visuald-paths.sh
new file mode 100755
index 0000000..7f55bcf
--- /dev/null
+++ b/test/issue1477-subpackage-visuald-paths.sh
@@ -0,0 +1,26 @@
+#!/usr/bin/env bash
+
+. $(dirname "${BASH_SOURCE[0]}")/common.sh
+# Check project files generated from project "root"
+cd ${CURR_DIR}/issue1477-subpackage-visuald-paths
+rm -rf .dub
+${DUB} generate visuald :subpackage_a
+if ! grep  "<File path=\"../source/library.d\"" .dub/library.visualdproj; then
+	die $LINENO 'VisualD path not correct'
+fi
+if ! grep  "<File path=\"../sub/subpackage_a/source/subpackage_a.d\"" .dub/library_subpackage_a.visualdproj; then
+	die $LINENO 'VisualD path not correct'
+fi
+
+# Check project files generated from sub package level
+cd sub/subpackage_a
+rm -rf .dub
+${DUB} generate visuald
+if ! grep  "<File path=\"../../../source/library.d\"" .dub/library.visualdproj; then
+	die $LINENO 'VisualD path not correct'
+fi
+if ! grep  "<File path=\"../source/subpackage_a.d\"" .dub/subpackage_a.visualdproj; then
+	die $LINENO 'VisualD path not correct'
+fi
+
+
diff --git a/test/issue1477-subpackage-visuald-paths/.no_build b/test/issue1477-subpackage-visuald-paths/.no_build
new file mode 100644
index 0000000..8d1c8b6
--- /dev/null
+++ b/test/issue1477-subpackage-visuald-paths/.no_build
@@ -0,0 +1 @@
+ 
diff --git a/test/issue1477-subpackage-visuald-paths/dub.sdl b/test/issue1477-subpackage-visuald-paths/dub.sdl
new file mode 100644
index 0000000..cff7b99
--- /dev/null
+++ b/test/issue1477-subpackage-visuald-paths/dub.sdl
@@ -0,0 +1,10 @@
+name "library"
+
+targetName "library"
+targetPath "lib"
+targetType "staticLibrary"
+
+importPaths "source"
+
+subPackage "sub/subpackage_a"
+
diff --git a/test/issue1477-subpackage-visuald-paths/source/library.d b/test/issue1477-subpackage-visuald-paths/source/library.d
new file mode 100644
index 0000000..7ac5fb6
--- /dev/null
+++ b/test/issue1477-subpackage-visuald-paths/source/library.d
@@ -0,0 +1,5 @@
+
+bool test_lib(int a)
+{
+  return a == 123;
+}
diff --git a/test/issue1477-subpackage-visuald-paths/sub/subpackage_a/dub.sdl b/test/issue1477-subpackage-visuald-paths/sub/subpackage_a/dub.sdl
new file mode 100644
index 0000000..221f61b
--- /dev/null
+++ b/test/issue1477-subpackage-visuald-paths/sub/subpackage_a/dub.sdl
@@ -0,0 +1,8 @@
+name "subpackage_a"
+
+targetName "subpackage_a"
+targetPath "bin"
+targetType "executable"
+
+dependency "library" path="../../"
+
diff --git a/test/issue1477-subpackage-visuald-paths/sub/subpackage_a/source/subpackage_a.d b/test/issue1477-subpackage-visuald-paths/sub/subpackage_a/source/subpackage_a.d
new file mode 100644
index 0000000..eb33b30
--- /dev/null
+++ b/test/issue1477-subpackage-visuald-paths/sub/subpackage_a/source/subpackage_a.d
@@ -0,0 +1,8 @@
+module subpackage_a
+
+import library;
+
+void main()
+{
+	assert(test_lib(123));
+}