diff --git a/lib/bundler/dsl.rb b/lib/bundler/dsl.rb
index c41f3ce535c..018b6833ef2 100644
--- a/lib/bundler/dsl.rb
+++ b/lib/bundler/dsl.rb
@@ -46,8 +46,7 @@ def gemspec(opts = nil)
       path              = opts && opts[:path] || '.'
       name              = opts && opts[:name] || '{,*}'
       development_group = opts && opts[:development_group] || :development
-      gemfile           = @gemfile || Bundler.default_gemfile
-      expanded_path     = File.expand_path(path, gemfile.dirname)
+      expanded_path     = path_relative_to_gemfile(path)
 
       gemspecs = Dir[File.join(expanded_path, "#{name}.gemspec")]
 
@@ -133,7 +132,7 @@ def git_source(name, &block)
     end
 
     def path(path, options = {}, &blk)
-      with_source(@sources.add_path_source(normalize_hash(options).merge("path" => Pathname.new(path))), &blk)
+      with_source(@sources.add_path_source(normalize_hash(options).merge("path" => path_relative_to_gemfile(path))), &blk)
     end
 
     def git(uri, options = {}, &blk)
@@ -287,6 +286,10 @@ def normalize_options(name, version, opts)
         opts["git"] = @git_sources[git_name].call(opts[git_name])
       end
 
+      if opts.key?("path")
+        opts["path"] = path_relative_to_gemfile(opts["path"])
+      end
+
       ["git", "path", "svn"].each do |type|
         if param = opts[type]
           if version.first && version.first =~ /^\s*=?\s*(\d[^\s]*)\s*$/
@@ -318,5 +321,10 @@ def normalize_source(source)
         raise GemfileError, "Unknown source '#{source}'"
       end
     end
+
+    def path_relative_to_gemfile(path)
+      @gemfile ||= Bundler.default_gemfile
+      @gemfile.dirname + path
+    end
   end
 end