diff --git a/gclient.py b/gclient.py
index c096492c1..ddc36acd5 100755
--- a/gclient.py
+++ b/gclient.py
@@ -897,8 +897,9 @@ class Dependency(gclient_utils.WorkItem, DependencySettings):
     hooks_cwd = self.root.root_dir
     if self._use_relative_paths:
       hooks_cwd = os.path.join(hooks_cwd, self.name)
-      logging.warning('Updating hook base working directory to %s.',
-                      hooks_cwd)
+    elif self._relative:
+      hooks_cwd = os.path.join(hooks_cwd, os.path.dirname(self.name))
+    logging.warning('Using hook base working directory: %s.', hooks_cwd)
 
     # Only add all hooks if we should sync, otherwise just add custom hooks.
     # override named sets of hooks by the custom hooks
diff --git a/tests/gclient_test.py b/tests/gclient_test.py
index 5de4c8d36..06d6fdd58 100755
--- a/tests/gclient_test.py
+++ b/tests/gclient_test.py
@@ -451,7 +451,7 @@ class GclientTest(trial_dir.TestCase):
 
     self.assertEqual(
         [(h.action, h.effective_cwd) for h in self._get_hooks()],
-        [(('tata', 'titi'), self.root_dir),
+        [(('tata', 'titi'), os.path.join(self.root_dir, 'foo')),
          (('fire', 'lazors'), os.path.join(self.root_dir, 'foo/baz'))])
 
   def testTargetOS(self):