diff --git a/src/Composer/Autoload/AutoloadGenerator.php b/src/Composer/Autoload/AutoloadGenerator.php
index 8627552bb..e3e5c49a9 100644
--- a/src/Composer/Autoload/AutoloadGenerator.php
+++ b/src/Composer/Autoload/AutoloadGenerator.php
@@ -17,6 +17,7 @@ use Composer\Json\JsonFile;
 use Composer\Package\Loader\JsonLoader;
 use Composer\Package\PackageInterface;
 use Composer\Repository\RepositoryInterface;
+use Composer\Downloader\Util\Filesystem;
 
 /**
  * @author Igor Wiedler <igor@wiedler.ch>
@@ -27,7 +28,6 @@ class AutoloadGenerator
     public function dump(RepositoryInterface $localRepo, PackageInterface $mainPackage, InstallationManager $installationManager, $targetDir)
     {
         $autoloadFile = file_get_contents(__DIR__.'/ClassLoader.php');
-
         $autoloadFile .= <<<'EOF'
 
 // autoload.php generated by Composer
@@ -49,12 +49,17 @@ function init() {
 return init();
 EOF;
 
-        $namespacesFile = <<<'EOF'
+        $filesystem = new Filesystem();
+        $vendorPath = strtr(realpath($installationManager->getVendorPath()), '\\', '/');
+        $relVendorPath = ltrim(substr($vendorPath, strlen(getcwd())), '/');
+        $vendorDirCode = $filesystem->findShortestPathCode(realpath($targetDir), $vendorPath, true);
+
+        $namespacesFile = <<<EOF
 <?php
 
 // autoload_namespace.php generated by Composer
 
-$baseDir = dirname(__DIR__);
+\$vendorDir = $vendorDirCode;
 
 return array(
 
@@ -71,26 +76,26 @@ EOF;
 
         // add main package
         $packageMap[] = array($mainPackage, '');
-
         $autoloads = $this->parseAutoloads($packageMap);
-        $vendorPath = $installationManager->getVendorPath();
 
-        $realVendorPath = realpath($vendorPath);
-        $vendorPathDepth = substr_count(strtr(substr($realVendorPath, strlen(getcwd())), '\\', '/'), '/');
-        $appBaseDir = str_repeat('dirname(', $vendorPathDepth).'$baseDir'.str_repeat(')', $vendorPathDepth);
+        $appBaseDir = $filesystem->findShortestPathCode($vendorPath, getcwd(), true);
+        $appBaseDir = str_replace('__DIR__', '$vendorDir', $appBaseDir);
 
         if (isset($autoloads['psr-0'])) {
             foreach ($autoloads['psr-0'] as $def) {
-                if (!$this->isAbsolutePath($def['path'])) {
-                    if (strpos($def['path'], $vendorPath) === 0) {
-                        $def['path'] = substr($def['path'], strlen($vendorPath));
-                        $baseDir = '$baseDir . ';
+                $def['path'] = strtr($def['path'], '\\', '/');
+                $baseDir = '';
+                if (!$filesystem->isAbsolutePath($def['path'])) {
+                    if (strpos($def['path'], $relVendorPath) === 0) {
+                        $def['path'] = substr($def['path'], strlen($relVendorPath));
+                        $baseDir = '$vendorDir . ';
                     } else {
                         $def['path'] = '/'.$def['path'];
                         $baseDir = $appBaseDir . ' . ';
                     }
-                } else {
-                    $baseDir = '';
+                } elseif (strpos($def['path'], $vendorPath) === 0) {
+                    $def['path'] = substr($def['path'], strlen($vendorPath));
+                    $baseDir = '$vendorDir . ';
                 }
                 $exportedPrefix = var_export($def['namespace'], true);
                 $exportedPath = var_export($def['path'], true);
@@ -158,9 +163,4 @@ EOF;
 
         return $loader;
     }
-
-    protected function isAbsolutePath($path)
-    {
-        return substr($path, 0, 1) === '/' || substr($path, 1, 1) === ':';
-    }
 }
diff --git a/src/Composer/Downloader/Util/Filesystem.php b/src/Composer/Downloader/Util/Filesystem.php
index 66e423e1d..e486d8631 100644
--- a/src/Composer/Downloader/Util/Filesystem.php
+++ b/src/Composer/Downloader/Util/Filesystem.php
@@ -58,22 +58,22 @@ class Filesystem
         if (dirname($from) === dirname($to)) {
             return './'.basename($to);
         }
-        $from = strtr($from, '\\', '/');
-        $to = strtr($to, '\\', '/');
+        $from = rtrim(strtr($from, '\\', '/'), '/');
+        $to = rtrim(strtr($to, '\\', '/'), '/');
 
-        $commonPath = dirname($to);
-        while (strpos($from, $commonPath) !== 0 && '/' !== $commonPath && !preg_match('{^[a-z]:/$}i', $commonPath)) {
+        $commonPath = $to;
+        while (strpos($from, $commonPath) !== 0 && '/' !== $commonPath && !preg_match('{^[a-z]:/?$}i', $commonPath) && '.' !== $commonPath) {
             $commonPath = strtr(dirname($commonPath), '\\', '/');
         }
 
-        if (0 !== strpos($from, $commonPath) || '/' === $commonPath) {
+        if (0 !== strpos($from, $commonPath) || '/' === $commonPath || '.' === $commonPath) {
             return $to;
         }
 
         $commonPath = rtrim($commonPath, '/') . '/';
         $sourcePathDepth = substr_count(substr($from, strlen($commonPath)), '/');
         $commonPathCode = str_repeat('../', $sourcePathDepth);
-        return $commonPathCode . substr($to, strlen($commonPath));
+        return ($commonPathCode . substr($to, strlen($commonPath))) ?: './';
     }
 
     /**
@@ -81,33 +81,38 @@ class Filesystem
      *
      * @param string $from
      * @param string $to
+     * @param Boolean $directories if true, the source/target are considered to be directories
      * @return string
      */
-    public function findShortestPathCode($from, $to)
+    public function findShortestPathCode($from, $to, $directories = false)
     {
         if (!$this->isAbsolutePath($from) || !$this->isAbsolutePath($to)) {
             throw new \InvalidArgumentException('from and to must be absolute paths');
         }
 
         if ($from === $to) {
-            return '__FILE__';
+            return $directories ? '__DIR__' : '__FILE__';
         }
         $from = strtr($from, '\\', '/');
         $to = strtr($to, '\\', '/');
 
-        $commonPath = dirname($to);
-        while (strpos($from, $commonPath) !== 0 && '/' !== $commonPath && !preg_match('{^[a-z]:/$}i', $commonPath)) {
+        $commonPath = $to;
+        while (strpos($from, $commonPath) !== 0 && '/' !== $commonPath && !preg_match('{^[a-z]:/?$}i', $commonPath) && '.' !== $commonPath) {
             $commonPath = strtr(dirname($commonPath), '\\', '/');
         }
 
-        if (0 !== strpos($from, $commonPath) || '/' === $commonPath) {
+        if (0 !== strpos($from, $commonPath) || '/' === $commonPath || '.' === $commonPath) {
             return var_export($to, true);
         }
 
         $commonPath = rtrim($commonPath, '/') . '/';
-        $sourcePathDepth = substr_count(substr($from, strlen($commonPath)), '/');
+        if (strpos($to, $from.'/') === 0) {
+            return '__DIR__ . '.var_export(substr($to, strlen($from)), true);
+        }
+        $sourcePathDepth = substr_count(substr($from, strlen($commonPath)), '/') + $directories;
         $commonPathCode = str_repeat('dirname(', $sourcePathDepth).'__DIR__'.str_repeat(')', $sourcePathDepth);
-        return $commonPathCode . '.' . var_export('/' . substr($to, strlen($commonPath)), true);
+        $relTarget = substr($to, strlen($commonPath));
+        return $commonPathCode . (strlen($relTarget) ? '.' . var_export('/' . $relTarget, true) : '');
     }
 
     /**
diff --git a/tests/Composer/Test/Autoload/AutoloadGeneratorTest.php b/tests/Composer/Test/Autoload/AutoloadGeneratorTest.php
new file mode 100644
index 000000000..d1236d6f0
--- /dev/null
+++ b/tests/Composer/Test/Autoload/AutoloadGeneratorTest.php
@@ -0,0 +1,118 @@
+<?php
+
+/*
+ * This file is part of Composer.
+ *
+ * (c) Nils Adermann <naderman@naderman.de>
+ *     Jordi Boggiano <j.boggiano@seld.be>
+ *
+ * For the full copyright and license information, please view the LICENSE
+ * file that was distributed with this source code.
+ */
+
+namespace Composer\Test\Installer;
+
+use Composer\Autoload\AutoloadGenerator;
+use Composer\Downloader\Util\Filesystem;
+use Composer\Package\MemoryPackage;
+
+class AutoloadGeneratorTest extends \PHPUnit_Framework_TestCase
+{
+    public $vendorDir;
+    private $workingDir;
+    private $im;
+    private $repository;
+    private $generator;
+
+    protected function setUp()
+    {
+        $fs = new Filesystem;
+        $that = $this;
+
+        $this->workingDir = sys_get_temp_dir();
+        $this->vendorDir = $this->workingDir.DIRECTORY_SEPARATOR.'composer-test-autoload';
+        if (is_dir($this->vendorDir)) {
+            $fs->removeDirectory($this->vendorDir);
+        }
+        mkdir($this->vendorDir);
+
+        $this->dir = getcwd();
+        chdir($this->workingDir);
+
+        $this->im = $this->getMockBuilder('Composer\Installer\InstallationManager')
+            ->disableOriginalConstructor()
+            ->getMock();
+        $this->im->expects($this->any())
+            ->method('getInstallPath')
+            ->will($this->returnCallback(function ($package) use ($that) {
+                return $that->vendorDir.'/'.$package->getName();
+            }));
+        $this->im->expects($this->any())
+            ->method('getVendorPath')
+            ->will($this->returnCallback(function () use ($that) {
+                return $that->vendorDir;
+            }));
+
+        $this->repo = $this->getMock('Composer\Repository\RepositoryInterface');
+
+        $this->generator = new AutoloadGenerator();
+    }
+
+    protected function tearDown()
+    {
+        chdir($this->dir);
+    }
+
+    public function testMainPackageAutoloading()
+    {
+        $package = new MemoryPackage('a', '1.0', '1.0');
+        $package->setAutoload(array('psr-0' => array('Main' => 'src/', 'Lala' => 'src/')));
+
+        $this->repo->expects($this->once())
+            ->method('getPackages')
+            ->will($this->returnValue(array()));
+
+        mkdir($this->vendorDir.'/.composer');
+        $this->generator->dump($this->repo, $package, $this->im, $this->vendorDir.'/.composer');
+        $this->assertAutoloadFiles('main', $this->vendorDir.'/.composer');
+    }
+
+    public function testMainPackageAutoloadingAlternativeVendorDir()
+    {
+        $package = new MemoryPackage('a', '1.0', '1.0');
+        $package->setAutoload(array('psr-0' => array('Main' => 'src/', 'Lala' => 'src/')));
+
+        $this->repo->expects($this->once())
+            ->method('getPackages')
+            ->will($this->returnValue(array()));
+
+        $this->vendorDir .= '/subdir';
+        mkdir($this->vendorDir.'/.composer', 0777, true);
+        $this->generator->dump($this->repo, $package, $this->im, $this->vendorDir.'/.composer');
+        $this->assertAutoloadFiles('main2', $this->vendorDir.'/.composer');
+    }
+
+    public function testVendorsAutoloading()
+    {
+        $package = new MemoryPackage('a', '1.0', '1.0');
+
+        $packages = array();
+        $packages[] = $a = new MemoryPackage('a/a', '1.0', '1.0');
+        $packages[] = $b = new MemoryPackage('b/b', '1.0', '1.0');
+        $a->setAutoload(array('psr-0' => array('A' => 'src/', 'A\\B' => 'lib/')));
+        $b->setAutoload(array('psr-0' => array('B\\Sub\\Name' => 'src/')));
+
+        $this->repo->expects($this->once())
+            ->method('getPackages')
+            ->will($this->returnValue($packages));
+
+        mkdir($this->vendorDir.'/.composer', 0777, true);
+        $this->generator->dump($this->repo, $package, $this->im, $this->vendorDir.'/.composer');
+        $this->assertAutoloadFiles('vendors', $this->vendorDir.'/.composer');
+    }
+
+    private function assertAutoloadFiles($name, $dir)
+    {
+        $this->assertFileEquals(__DIR__.'/Fixtures/autoload_'.$name.'.php', $dir.'/autoload_namespaces.php');
+    }
+}
diff --git a/tests/Composer/Test/Autoload/Fixtures/autoload_main.php b/tests/Composer/Test/Autoload/Fixtures/autoload_main.php
new file mode 100644
index 000000000..157d888f3
--- /dev/null
+++ b/tests/Composer/Test/Autoload/Fixtures/autoload_main.php
@@ -0,0 +1,10 @@
+<?php
+
+// autoload_namespace.php generated by Composer
+
+$vendorDir = dirname(__DIR__);
+
+return array(
+    'Main' => dirname($vendorDir) . '/src/',
+    'Lala' => dirname($vendorDir) . '/src/',
+);
diff --git a/tests/Composer/Test/Autoload/Fixtures/autoload_main2.php b/tests/Composer/Test/Autoload/Fixtures/autoload_main2.php
new file mode 100644
index 000000000..a0fa2c7db
--- /dev/null
+++ b/tests/Composer/Test/Autoload/Fixtures/autoload_main2.php
@@ -0,0 +1,10 @@
+<?php
+
+// autoload_namespace.php generated by Composer
+
+$vendorDir = dirname(__DIR__);
+
+return array(
+    'Main' => dirname(dirname($vendorDir)) . '/src/',
+    'Lala' => dirname(dirname($vendorDir)) . '/src/',
+);
diff --git a/tests/Composer/Test/Autoload/Fixtures/autoload_vendors.php b/tests/Composer/Test/Autoload/Fixtures/autoload_vendors.php
new file mode 100644
index 000000000..b149046df
--- /dev/null
+++ b/tests/Composer/Test/Autoload/Fixtures/autoload_vendors.php
@@ -0,0 +1,11 @@
+<?php
+
+// autoload_namespace.php generated by Composer
+
+$vendorDir = dirname(__DIR__);
+
+return array(
+    'B\\Sub\\Name' => $vendorDir . '/b/b/src/',
+    'A\\B' => $vendorDir . '/a/a/lib/',
+    'A' => $vendorDir . '/a/a/src/',
+);
diff --git a/tests/Composer/Test/Downloader/Util/FilesystemTest.php b/tests/Composer/Test/Downloader/Util/FilesystemTest.php
index f4d9af04f..01a3189b8 100644
--- a/tests/Composer/Test/Downloader/Util/FilesystemTest.php
+++ b/tests/Composer/Test/Downloader/Util/FilesystemTest.php
@@ -20,24 +20,37 @@ class FilesystemTest extends TestCase
     /**
      * @dataProvider providePathCouplesAsCode
      */
-    public function testFindShortestPathCode($a, $b, $expected)
+    public function testFindShortestPathCode($a, $b, $directory, $expected)
     {
         $fs = new Filesystem;
-        $this->assertEquals($expected, $fs->findShortestPathCode($a, $b));
+        $this->assertEquals($expected, $fs->findShortestPathCode($a, $b, $directory));
     }
 
     public function providePathCouplesAsCode()
     {
         return array(
-            array('/foo/bar', '/foo/bar', "__FILE__"),
-            array('/foo/bar', '/foo/baz', "__DIR__.'/baz'"),
-            array('/foo/bin/run', '/foo/vendor/acme/bin/run', "dirname(__DIR__).'/vendor/acme/bin/run'"),
-            array('/foo/bin/run', '/foo/vendor/acme/bin/run', "dirname(__DIR__).'/vendor/acme/bin/run'"),
-            array('/foo/bin/run', '/bar/bin/run', "'/bar/bin/run'"),
-            array('c:/bin/run', 'c:/vendor/acme/bin/run', "dirname(__DIR__).'/vendor/acme/bin/run'"),
-            array('c:\\bin\\run', 'c:/vendor/acme/bin/run', "dirname(__DIR__).'/vendor/acme/bin/run'"),
-            array('c:/bin/run', 'd:/vendor/acme/bin/run', "'d:/vendor/acme/bin/run'"),
-            array('c:\\bin\\run', 'd:/vendor/acme/bin/run', "'d:/vendor/acme/bin/run'"),
+            array('/foo/bar', '/foo/bar', false, "__FILE__"),
+            array('/foo/bar', '/foo/baz', false, "__DIR__.'/baz'"),
+            array('/foo/bin/run', '/foo/vendor/acme/bin/run', false, "dirname(__DIR__).'/vendor/acme/bin/run'"),
+            array('/foo/bin/run', '/foo/vendor/acme/bin/run', false, "dirname(__DIR__).'/vendor/acme/bin/run'"),
+            array('/foo/bin/run', '/bar/bin/run', false, "'/bar/bin/run'"),
+            array('c:/bin/run', 'c:/vendor/acme/bin/run', false, "dirname(__DIR__).'/vendor/acme/bin/run'"),
+            array('c:\\bin\\run', 'c:/vendor/acme/bin/run', false, "dirname(__DIR__).'/vendor/acme/bin/run'"),
+            array('c:/bin/run', 'd:/vendor/acme/bin/run', false, "'d:/vendor/acme/bin/run'"),
+            array('c:\\bin\\run', 'd:/vendor/acme/bin/run', false, "'d:/vendor/acme/bin/run'"),
+            array('/foo/bar', '/foo/bar', true, "__DIR__"),
+            array('/foo/bar', '/foo/baz', true, "dirname(__DIR__).'/baz'"),
+            array('/foo/bin/run', '/foo/vendor/acme/bin/run', true, "dirname(dirname(__DIR__)).'/vendor/acme/bin/run'"),
+            array('/foo/bin/run', '/foo/vendor/acme/bin/run', true, "dirname(dirname(__DIR__)).'/vendor/acme/bin/run'"),
+            array('/foo/bin/run', '/bar/bin/run', true, "'/bar/bin/run'"),
+            array('c:/bin/run', 'c:/vendor/acme/bin/run', true, "dirname(dirname(__DIR__)).'/vendor/acme/bin/run'"),
+            array('c:\\bin\\run', 'c:/vendor/acme/bin/run', true, "dirname(dirname(__DIR__)).'/vendor/acme/bin/run'"),
+            array('c:/bin/run', 'd:/vendor/acme/bin/run', true, "'d:/vendor/acme/bin/run'"),
+            array('c:\\bin\\run', 'd:/vendor/acme/bin/run', true, "'d:/vendor/acme/bin/run'"),
+            array('C:/Temp/test', 'C:\Temp', true, "dirname(__DIR__)"),
+            array('C:/Temp', 'C:\Temp\test', true, "__DIR__ . '/test'"),
+            array('/tmp/test', '/tmp', true, "dirname(__DIR__)"),
+            array('/tmp', '/tmp/test', true, "__DIR__ . '/test'"),
         );
     }
 
@@ -62,6 +75,12 @@ class FilesystemTest extends TestCase
             array('c:\\bin\\run', 'c:/vendor/acme/bin/run', "../vendor/acme/bin/run"),
             array('c:/bin/run', 'd:/vendor/acme/bin/run', "d:/vendor/acme/bin/run"),
             array('c:\\bin\\run', 'd:/vendor/acme/bin/run', "d:/vendor/acme/bin/run"),
+            array('C:/Temp/test', 'C:\Temp', "./"),
+            array('/tmp/test', '/tmp', "./"),
+            array('C:/Temp/test/sub', 'C:\Temp', "../"),
+            array('/tmp/test/sub', '/tmp', "../"),
+            array('/tmp', '/tmp/test', "test"),
+            array('C:/Temp', 'C:\Temp\test', "test"),
         );
     }
 }