diff --git a/src/build_context.rs b/src/build_context.rs
index 27f91076b..6fc17b97f 100644
--- a/src/build_context.rs
+++ b/src/build_context.rs
@@ -73,22 +73,31 @@ pub enum ProjectLayout {
 
 impl ProjectLayout {
     /// Checks whether a python module exists besides Cargo.toml with the right name
-    pub fn determine(project_root: impl AsRef<Path>, module_name: &str) -> Result<ProjectLayout> {
+    pub fn determine(
+        project_root: impl AsRef<Path>,
+        module_name: &str,
+        py_src: Option<impl AsRef<Path>>,
+    ) -> Result<ProjectLayout> {
         // A dot in the module name means the extension module goes into the module folder specified by the path
         let parts: Vec<&str> = module_name.split('.').collect();
         let project_root = project_root.as_ref();
+        let python_root = if let Some(py_src) = py_src {
+            project_root.join(py_src.as_ref())
+        } else {
+            project_root.to_path_buf()
+        };
         let (python_module, rust_module, extension_name) = if parts.len() > 1 {
             let mut rust_module = project_root.to_path_buf();
             rust_module.extend(&parts[0..parts.len() - 1]);
             (
-                project_root.join(parts[0]),
+                python_root.join(parts[0]),
                 rust_module,
                 parts[parts.len() - 1].to_string(),
             )
         } else {
             (
-                project_root.join(module_name),
-                project_root.join(module_name),
+                python_root.join(module_name),
+                python_root.join(module_name),
                 module_name.to_string(),
             )
         };
diff --git a/src/build_options.rs b/src/build_options.rs
index 284189ea9..e91c2daa8 100644
--- a/src/build_options.rs
+++ b/src/build_options.rs
@@ -152,7 +152,8 @@ impl BuildOptions {
             .filter(|name| name.contains('.'))
             .unwrap_or(&module_name);
 
-        let project_layout = ProjectLayout::determine(manifest_dir, extension_name)?;
+        let py_src = extra_metadata.python_source.clone();
+        let project_layout = ProjectLayout::determine(manifest_dir, extension_name, py_src)?;
 
         let mut cargo_extra_args = split_extra_args(&self.cargo_extra_args)?;
         if let Some(ref target) = self.target {
diff --git a/src/cargo_toml.rs b/src/cargo_toml.rs
index cc6aaa4f4..ad2b45d11 100644
--- a/src/cargo_toml.rs
+++ b/src/cargo_toml.rs
@@ -123,6 +123,7 @@ pub struct RemainingCoreMetadata {
     pub project_url: Option<HashMap<String, String>>,
     pub provides_extra: Option<Vec<String>>,
     pub description_content_type: Option<String>,
+    pub python_source: Option<String>,
 }
 
 #[cfg(test)]
diff --git a/test-crates/pyo3-mixed-py-subdir/Cargo.lock b/test-crates/pyo3-mixed-py-subdir/Cargo.lock
new file mode 100644
index 000000000..99ae4b18b
--- /dev/null
+++ b/test-crates/pyo3-mixed-py-subdir/Cargo.lock
@@ -0,0 +1,257 @@
+# This file is automatically @generated by Cargo.
+# It is not intended for manual editing.
+version = 3
+
+[[package]]
+name = "bitflags"
+version = "1.2.1"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "cf1de2fe8c75bc145a2f577add951f8134889b4795d47466a54a5c846d691693"
+
+[[package]]
+name = "cfg-if"
+version = "1.0.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "baf1de4339761588bc0619e3cbc0120ee582ebb74b53b4efbf79117bd2da40fd"
+
+[[package]]
+name = "indoc"
+version = "0.3.6"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "47741a8bc60fb26eb8d6e0238bbb26d8575ff623fdc97b1a2c00c050b9684ed8"
+dependencies = [
+ "indoc-impl",
+ "proc-macro-hack",
+]
+
+[[package]]
+name = "indoc-impl"
+version = "0.3.6"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "ce046d161f000fffde5f432a0d034d0341dc152643b2598ed5bfce44c4f3a8f0"
+dependencies = [
+ "proc-macro-hack",
+ "proc-macro2",
+ "quote",
+ "syn",
+ "unindent",
+]
+
+[[package]]
+name = "instant"
+version = "0.1.9"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "61124eeebbd69b8190558df225adf7e4caafce0d743919e5d6b19652314ec5ec"
+dependencies = [
+ "cfg-if",
+]
+
+[[package]]
+name = "libc"
+version = "0.2.90"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "ba4aede83fc3617411dc6993bc8c70919750c1c257c6ca6a502aed6e0e2394ae"
+
+[[package]]
+name = "lock_api"
+version = "0.4.2"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "dd96ffd135b2fd7b973ac026d28085defbe8983df057ced3eb4f2130b0831312"
+dependencies = [
+ "scopeguard",
+]
+
+[[package]]
+name = "once_cell"
+version = "1.8.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "692fcb63b64b1758029e0a96ee63e049ce8c5948587f2f7208df04625e5f6b56"
+
+[[package]]
+name = "parking_lot"
+version = "0.11.1"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "6d7744ac029df22dca6284efe4e898991d28e3085c706c972bcd7da4a27a15eb"
+dependencies = [
+ "instant",
+ "lock_api",
+ "parking_lot_core",
+]
+
+[[package]]
+name = "parking_lot_core"
+version = "0.8.3"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "fa7a782938e745763fe6907fc6ba86946d72f49fe7e21de074e08128a99fb018"
+dependencies = [
+ "cfg-if",
+ "instant",
+ "libc",
+ "redox_syscall",
+ "smallvec",
+ "winapi",
+]
+
+[[package]]
+name = "paste"
+version = "0.1.18"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "45ca20c77d80be666aef2b45486da86238fabe33e38306bd3118fe4af33fa880"
+dependencies = [
+ "paste-impl",
+ "proc-macro-hack",
+]
+
+[[package]]
+name = "paste-impl"
+version = "0.1.18"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "d95a7db200b97ef370c8e6de0088252f7e0dfff7d047a28528e47456c0fc98b6"
+dependencies = [
+ "proc-macro-hack",
+]
+
+[[package]]
+name = "proc-macro-hack"
+version = "0.5.19"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "dbf0c48bc1d91375ae5c3cd81e3722dff1abcf81a30960240640d223f59fe0e5"
+
+[[package]]
+name = "proc-macro2"
+version = "1.0.24"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "1e0704ee1a7e00d7bb417d0770ea303c1bccbabf0ef1667dae92b5967f5f8a71"
+dependencies = [
+ "unicode-xid",
+]
+
+[[package]]
+name = "pyo3"
+version = "0.14.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "0b2fee5b9b746eccdaec45991347fd5565b3c3ea90abc99437f31fd8d6148a8d"
+dependencies = [
+ "cfg-if",
+ "indoc",
+ "libc",
+ "parking_lot",
+ "paste",
+ "pyo3-build-config",
+ "pyo3-macros",
+ "unindent",
+]
+
+[[package]]
+name = "pyo3-build-config"
+version = "0.14.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "905f7e52b894dfabd6d65287b8a9037a9e2b15f3ae5995340edf12e18a9f488e"
+dependencies = [
+ "once_cell",
+]
+
+[[package]]
+name = "pyo3-macros"
+version = "0.14.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "3d33702750c42c99f6e3c062b59e5c3b6d93b2a91ee379f99028b43b92b05ebc"
+dependencies = [
+ "pyo3-macros-backend",
+ "quote",
+ "syn",
+]
+
+[[package]]
+name = "pyo3-macros-backend"
+version = "0.14.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "a07dcdedfc1ba4e6a929dec829eb0d5520490c7bd104a7a6201a9f2e8a60e082"
+dependencies = [
+ "proc-macro2",
+ "pyo3-build-config",
+ "quote",
+ "syn",
+]
+
+[[package]]
+name = "pyo3-mixed-py-subdir"
+version = "2.1.3"
+dependencies = [
+ "pyo3",
+]
+
+[[package]]
+name = "quote"
+version = "1.0.9"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "c3d0b9745dc2debf507c8422de05d7226cc1f0644216dfdfead988f9b1ab32a7"
+dependencies = [
+ "proc-macro2",
+]
+
+[[package]]
+name = "redox_syscall"
+version = "0.2.5"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "94341e4e44e24f6b591b59e47a8a027df12e008d73fd5672dbea9cc22f4507d9"
+dependencies = [
+ "bitflags",
+]
+
+[[package]]
+name = "scopeguard"
+version = "1.1.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "d29ab0c6d3fc0ee92fe66e2d99f700eab17a8d57d1c1d3b748380fb20baa78cd"
+
+[[package]]
+name = "smallvec"
+version = "1.6.1"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "fe0f37c9e8f3c5a4a66ad655a93c74daac4ad00c441533bf5c6e7990bb42604e"
+
+[[package]]
+name = "syn"
+version = "1.0.64"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "3fd9d1e9976102a03c542daa2eff1b43f9d72306342f3f8b3ed5fb8908195d6f"
+dependencies = [
+ "proc-macro2",
+ "quote",
+ "unicode-xid",
+]
+
+[[package]]
+name = "unicode-xid"
+version = "0.2.1"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "f7fe0bb3479651439c9112f72b6c505038574c9fbb575ed1bf3b797fa39dd564"
+
+[[package]]
+name = "unindent"
+version = "0.1.7"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "f14ee04d9415b52b3aeab06258a3f07093182b88ba0f9b8d203f211a7a7d41c7"
+
+[[package]]
+name = "winapi"
+version = "0.3.9"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "5c839a674fcd7a98952e593242ea400abe93992746761e38641405d28b00f419"
+dependencies = [
+ "winapi-i686-pc-windows-gnu",
+ "winapi-x86_64-pc-windows-gnu",
+]
+
+[[package]]
+name = "winapi-i686-pc-windows-gnu"
+version = "0.4.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "ac3b87c63620426dd9b991e5ce0329eff545bccbbb34f3be09ff6fb6ab51b7b6"
+
+[[package]]
+name = "winapi-x86_64-pc-windows-gnu"
+version = "0.4.0"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "712e227841d057c1ee1cd2fb22fa7e5a5461ae8e48fa2ca79ec42cfc1931183f"
diff --git a/test-crates/pyo3-mixed-py-subdir/Cargo.toml b/test-crates/pyo3-mixed-py-subdir/Cargo.toml
new file mode 100644
index 000000000..ba3f5a0e4
--- /dev/null
+++ b/test-crates/pyo3-mixed-py-subdir/Cargo.toml
@@ -0,0 +1,17 @@
+[package]
+authors = ["konstin <konstin@mailbox.org>"]
+name = "pyo3-mixed-py-subdir"
+version = "2.1.3"
+description = "Implements a dummy function combining rust and python"
+readme = "Readme.md"
+edition = "2018"
+
+[dependencies]
+pyo3 = { version = "0.14.0", features = ["extension-module"] }
+
+[lib]
+name = "pyo3_mixed_py_subdir"
+crate-type = ["cdylib"]
+
+[package.metadata.maturin]
+python-source = "python"
diff --git a/test-crates/pyo3-mixed-py-subdir/Readme.md b/test-crates/pyo3-mixed-py-subdir/Readme.md
new file mode 100644
index 000000000..038375070
--- /dev/null
+++ b/test-crates/pyo3-mixed-py-subdir/Readme.md
@@ -0,0 +1,30 @@
+# pyo3-mixed
+
+A package for testing maturin with a mixed pyo3/python project.
+
+## Usage
+
+```bash
+pip install .
+```
+
+```python
+import pyo3_mixed
+assert pyo3_mixed.get_42() == 42
+```
+
+## Testing
+
+Install tox:
+
+```bash
+pip install tox
+```
+
+Run it:
+
+```bash
+tox
+```
+
+The tests are in `test_pyo3_mixed.py`, while the configuration is in tox.ini
diff --git a/test-crates/pyo3-mixed-py-subdir/check_installed/check_installed.py b/test-crates/pyo3-mixed-py-subdir/check_installed/check_installed.py
new file mode 100755
index 000000000..a08364703
--- /dev/null
+++ b/test-crates/pyo3-mixed-py-subdir/check_installed/check_installed.py
@@ -0,0 +1,7 @@
+#!/usr/bin/env python3
+
+import pyo3_mixed_py_subdir as pyo3_mixed
+
+assert pyo3_mixed.get_42() == 42
+
+print("SUCCESS")
diff --git a/test-crates/pyo3-mixed-py-subdir/pyproject.toml b/test-crates/pyo3-mixed-py-subdir/pyproject.toml
new file mode 100644
index 000000000..9c3771ba7
--- /dev/null
+++ b/test-crates/pyo3-mixed-py-subdir/pyproject.toml
@@ -0,0 +1,14 @@
+[build-system]
+requires = ["maturin>=0.11,<0.12"]
+build-backend = "maturin"
+
+[project]
+name = "pyo3-mixed-py-subdir"
+classifiers = [
+    "Programming Language :: Python",
+    "Programming Language :: Rust"
+]
+requires-python = ">=3.6"
+
+[project.scripts]
+get_42 = "pyo3_mixed_py_subdir:get_42"
diff --git a/test-crates/pyo3-mixed-py-subdir/python/pyo3_mixed_py_subdir/__init__.py b/test-crates/pyo3-mixed-py-subdir/python/pyo3_mixed_py_subdir/__init__.py
new file mode 100644
index 000000000..fd165e408
--- /dev/null
+++ b/test-crates/pyo3-mixed-py-subdir/python/pyo3_mixed_py_subdir/__init__.py
@@ -0,0 +1,6 @@
+from .python_module.double import double
+from .pyo3_mixed_py_subdir import get_21
+
+
+def get_42() -> int:
+    return double(get_21)
diff --git a/test-crates/pyo3-mixed-py-subdir/python/pyo3_mixed_py_subdir/python_module/__init__.py b/test-crates/pyo3-mixed-py-subdir/python/pyo3_mixed_py_subdir/python_module/__init__.py
new file mode 100644
index 000000000..e69de29bb
diff --git a/test-crates/pyo3-mixed-py-subdir/python/pyo3_mixed_py_subdir/python_module/double.py b/test-crates/pyo3-mixed-py-subdir/python/pyo3_mixed_py_subdir/python_module/double.py
new file mode 100644
index 000000000..2eed18d52
--- /dev/null
+++ b/test-crates/pyo3-mixed-py-subdir/python/pyo3_mixed_py_subdir/python_module/double.py
@@ -0,0 +1,5 @@
+from typing import Callable
+
+
+def double(fn: Callable[[], int]) -> int:
+    return 2 * fn()
diff --git a/test-crates/pyo3-mixed-py-subdir/src/lib.rs b/test-crates/pyo3-mixed-py-subdir/src/lib.rs
new file mode 100644
index 000000000..e52a7d921
--- /dev/null
+++ b/test-crates/pyo3-mixed-py-subdir/src/lib.rs
@@ -0,0 +1,13 @@
+use pyo3::prelude::*;
+
+#[pyfunction]
+fn get_21() -> usize {
+    21
+}
+
+#[pymodule]
+fn pyo3_mixed_py_subdir(_py: Python, m: &PyModule) -> PyResult<()> {
+    m.add_wrapped(wrap_pyfunction!(get_21))?;
+
+    Ok(())
+}
diff --git a/test-crates/pyo3-mixed-py-subdir/test_pyo3_mixed.py b/test-crates/pyo3-mixed-py-subdir/test_pyo3_mixed.py
new file mode 100644
index 000000000..d1f911557
--- /dev/null
+++ b/test-crates/pyo3-mixed-py-subdir/test_pyo3_mixed.py
@@ -0,0 +1,7 @@
+#!/usr/bin/env python3
+
+import pyo3_mixed_py_subdir as pyo3_mixed
+
+
+def test_get_42():
+    assert pyo3_mixed.get_42() == 42
diff --git a/test-crates/pyo3-mixed-py-subdir/tox.ini b/test-crates/pyo3-mixed-py-subdir/tox.ini
new file mode 100644
index 000000000..fd19ca2b2
--- /dev/null
+++ b/test-crates/pyo3-mixed-py-subdir/tox.ini
@@ -0,0 +1,7 @@
+[tox]
+envlist = py36,py37,py38
+isolated_build = True
+
+[testenv]
+deps = pytest
+commands = pytest
\ No newline at end of file
diff --git a/tests/run.rs b/tests/run.rs
index c3b31549a..0ffb22f3b 100644
--- a/tests/run.rs
+++ b/tests/run.rs
@@ -22,6 +22,14 @@ fn develop_pyo3_mixed_submodule() {
     ));
 }
 
+#[test]
+fn develop_pyo3_mixed_py_subdir() {
+    handle_result(develop::test_develop(
+        "test-crates/pyo3-mixed-py-subdir",
+        None,
+    ));
+}
+
 #[test]
 fn develop_cffi_pure() {
     handle_result(develop::test_develop("test-crates/cffi-pure", None));
@@ -58,6 +66,14 @@ fn integration_pyo3_mixed_submodule() {
     ));
 }
 
+#[test]
+fn integration_pyo3_mixed_py_subdir() {
+    handle_result(integration::test_integration(
+        "test-crates/pyo3-mixed-py-subdir",
+        None,
+    ));
+}
+
 #[cfg(target_os = "windows")]
 #[test]
 #[ignore]