diff --git a/lib/bugsnag/stacktrace.rb b/lib/bugsnag/stacktrace.rb
index fceabb004..55e14a234 100644
--- a/lib/bugsnag/stacktrace.rb
+++ b/lib/bugsnag/stacktrace.rb
@@ -7,6 +7,9 @@ class Stacktrace
     # e.g. "org.jruby.Ruby.runScript(Ruby.java:807)"
     JAVA_BACKTRACE_REGEX = /^(.*)\((.*)(?::([0-9]+))?\)$/
 
+    # Path to vendored code. Used to mark file paths as out of project.
+    VENDOR_PATH = 'vendor/'
+
     def initialize(backtrace, configuration)
       @configuration = configuration
 
@@ -31,7 +34,6 @@ def initialize(backtrace, configuration)
 
         # Generate the stacktrace line hash
         trace_hash = {}
-        trace_hash[:inProject] = true if in_project?(file)
         trace_hash[:lineNumber] = line_str.to_i
 
         if configuration.send_code
@@ -40,9 +42,12 @@ def initialize(backtrace, configuration)
 
         # Clean up the file path in the stacktrace
         if defined?(@configuration.project_root) && @configuration.project_root.to_s != ''
+          trace_hash[:inProject] = true if file.start_with?(@configuration.project_root)
           file.sub!(/#{@configuration.project_root}\//, "")
+          trace_hash.delete(:inProject) if file.start_with?(VENDOR_PATH)
         end
 
+
         # Strip common gem path prefixes
         if defined?(Gem)
           file = Gem.path.inject(file) {|line, path| line.sub(/#{path}\//, "") }
@@ -67,10 +72,6 @@ def to_a
 
     private
 
-    def in_project?(line)
-      @configuration.project_root && line.start_with?(@configuration.project_root.to_s)
-    end
-
     def code(file, line_number, num_lines = 7)
       code_hash = {}
 
diff --git a/spec/report_spec.rb b/spec/report_spec.rb
index 1a1f995c7..52ad13aee 100644
--- a/spec/report_spec.rb
+++ b/spec/report_spec.rb
@@ -524,6 +524,34 @@ def gloops
     }
   end
 
+  it 'marks vendored stack frames as out-of-project' do
+    project_root = File.expand_path File.dirname(__FILE__)
+    Bugsnag.configuration.project_root = project_root
+
+    ex = Exception.new('Division by zero')
+    allow(ex).to receive (:backtrace) {[
+      File.join(project_root, "vendor/strutils/lib/string.rb:508:in `splice'"),
+      File.join(project_root, "vendors/strutils/lib/string.rb:508:in `splice'"),
+      File.join(project_root, "lib/helpers/string.rb:32:in `splice'"),
+      File.join(project_root, "lib/vendor/lib/article.rb:158:in `initialize'"),
+      File.join(project_root, "lib/prog.rb:158:in `read_articles'"),
+      "app.rb:10:in `main'",
+      "(pry):3:in `__pry__'"
+    ]}
+    Bugsnag.notify(ex)
+    expect(Bugsnag).to have_sent_notification{ |payload|
+      exception = get_exception_from_payload(payload)
+
+      expect(exception["stacktrace"][0]["inProject"]).to be_nil
+      expect(exception["stacktrace"][1]["inProject"]).to be true
+      expect(exception["stacktrace"][2]["inProject"]).to be true
+      expect(exception["stacktrace"][3]["inProject"]).to be true
+      expect(exception["stacktrace"][4]["inProject"]).to be true
+      expect(exception["stacktrace"][5]["inProject"]).to be_nil
+      expect(exception["stacktrace"][6]["inProject"]).to be_nil
+    }
+  end
+
   it "adds app_version to the payload if it is set" do
     Bugsnag.configuration.app_version = "1.1.1"
     Bugsnag.notify(BugsnagTestException.new("It crashed"))