diff --git a/lib/mix/lib/mix/project.ex b/lib/mix/lib/mix/project.ex
index 081509c5f67..d2309e4eb96 100644
--- a/lib/mix/lib/mix/project.ex
+++ b/lib/mix/lib/mix/project.ex
@@ -273,9 +273,11 @@ defmodule Mix.Project do
     source = Path.expand("ebin")
     target = Path.join(app, "ebin")
 
+    symlink_options = [relative_symlink: true]
+
     cond do
       opts[:symlink_ebin] ->
-        Mix.Utils.symlink_or_copy(source, target)
+        Mix.Utils.symlink_or_copy(source, target, symlink_options)
       match?({ :ok, _ }, :file.read_link(target)) ->
         File.rm_rf!(target)
         File.mkdir_p!(target)
@@ -283,8 +285,8 @@ defmodule Mix.Project do
         File.mkdir_p!(target)
     end
 
-    Mix.Utils.symlink_or_copy(Path.expand("include"), Path.join(app, "include"))
-    Mix.Utils.symlink_or_copy(Path.expand("priv"), Path.join(app, "priv"))
+    Mix.Utils.symlink_or_copy(Path.expand("include"), Path.join(app, "include"), symlink_options)
+    Mix.Utils.symlink_or_copy(Path.expand("priv"), Path.join(app, "priv"), symlink_options)
   end
 
   @doc """
diff --git a/lib/mix/lib/mix/utils.ex b/lib/mix/lib/mix/utils.ex
index 83c2ff42836..eae8ec6d26b 100644
--- a/lib/mix/lib/mix/utils.ex
+++ b/lib/mix/lib/mix/utils.ex
@@ -317,8 +317,12 @@ defmodule Mix.Utils do
   @doc """
   Symlink directory `source` to `target` or copy it recursively
   in case symlink fails.
+  
+  ## Options
+
+  * `:relative_symlink` - If making a symlink, make it relative.
   """
-  def symlink_or_copy(source, target) do
+  def symlink_or_copy(source, target, opts // []) do
     if File.exists?(source) do
       source_list = String.to_char_list!(source)
       case :file.read_link(target) do
@@ -326,20 +330,21 @@ defmodule Mix.Utils do
           :ok
         { :ok, _ } ->
           File.rm!(target)
-          do_symlink_or_copy(source, target)
+          do_symlink_or_copy(source, target, opts)
         { :error, :enoent } ->
-          do_symlink_or_copy(source, target)
+          do_symlink_or_copy(source, target, opts)
         { :error, _ } ->
           File.rm_rf!(target)
-          do_symlink_or_copy(source, target)
+          do_symlink_or_copy(source, target, opts)
       end
     else
       { :error, :enoent }
     end
   end
 
-  defp do_symlink_or_copy(source, target) do
-    case :file.make_symlink(source, target) do
+  defp do_symlink_or_copy(source, target, opts) do
+    symlink_source = if opts[:relative_symlink], do: make_relative_path(source, Path.expand(target)), else: source
+    case :file.make_symlink(symlink_source, target) do
       :ok -> :ok
       { :error, _ } -> File.cp_r!(source, Path.join(target, "."))
     end
@@ -390,4 +395,39 @@ defmodule Mix.Utils do
   defp is_url?(path) do
     URI.parse(path).scheme in ["http", "https"]
   end
+
+  @doc """
+  Returns the relative path you would need to go from target to source. 
+  Useful to make relative symlinks.
+
+  ## Examples
+
+    iex> Mix.Utils.make_relative_path("/a/b/c", "/a/b/d")
+    "c"
+
+    iex> Mix.Utils.make_relative_path("/a/b/c/d", "/a/b/d/e")
+    "../c/d"
+
+    iex> Mix.Utils.make_relative_path("a/b", "y/z")
+    "../a/b"
+
+    iex> Mix.Utils.make_relative_path("a/b/c/d", "a/e/f/g")
+    "../../b/c/d"
+  """
+  def make_relative_path(source, target) do
+    do_make_relative_path(source, target)
+  end
+
+  defp do_make_relative_path(source, target) do
+    <<source_start :: utf8, source_rest :: binary>> = source
+    <<target_start :: utf8, target_rest :: binary>> = target
+
+    if source_start == target_start do
+      do_make_relative_path(source_rest, target_rest)
+    else
+      back_path = Enum.reduce Path.split(target) |> List.delete_at(-1), "", fn(_, acc) -> Path.join("..", acc) end
+      [back_path, source] |> Path.join |> Path.relative
+    end
+  end
+    
 end
diff --git a/lib/mix/test/mix/project_test.exs b/lib/mix/test/mix/project_test.exs
index 2306cd66576..447edc908d7 100644
--- a/lib/mix/test/mix/project_test.exs
+++ b/lib/mix/test/mix/project_test.exs
@@ -82,7 +82,7 @@ defmodule Mix.ProjectTest do
       config = [app_path: "_build/archive"]
       assert Mix.Project.build_structure(config) == :ok
       assert File.dir?("_build/archive/ebin")
-      assert :file.read_link("_build/archive/priv") == { :ok, Path.expand('priv') }
+      assert :file.read_link("_build/archive/priv") == { :ok, '../../priv' }
     end
   end
 
@@ -92,13 +92,13 @@ defmodule Mix.ProjectTest do
       File.mkdir_p!("include")
 
       assert Mix.Project.build_structure(config, symlink_ebin: true) == :ok
-      assert :file.read_link("_build/archive/ebin") == { :ok, Path.expand('ebin') }
-      assert :file.read_link("_build/archive/priv") == { :ok, Path.expand('priv') }
-      assert :file.read_link("_build/archive/include") == { :ok, Path.expand('include') }
+      assert :file.read_link("_build/archive/ebin") == { :ok, '../../ebin' }
+      assert :file.read_link("_build/archive/priv") == { :ok, '../../priv' }
+      assert :file.read_link("_build/archive/include") == { :ok, '../../include' }
 
       assert Mix.Project.build_structure(config) == :ok
       assert File.dir?("_build/archive/ebin")
-      assert :file.read_link("_build/archive/priv") == { :ok, Path.expand('priv') }
+      assert :file.read_link("_build/archive/priv") == { :ok, '../../priv' }
     end
   end
 end
diff --git a/lib/mix/test/mix/utils_test.exs b/lib/mix/test/mix/utils_test.exs
index fa54f833a9d..258652f5ebf 100644
--- a/lib/mix/test/mix/utils_test.exs
+++ b/lib/mix/test/mix/utils_test.exs
@@ -3,6 +3,8 @@ Code.require_file "../test_helper.exs", __DIR__
 defmodule Mix.UtilsTest do
   use MixTest.Case
 
+  doctest Mix.Utils, only: [make_relative_path: 2]
+
   test :command_to_module do
     assert Mix.Utils.command_to_module("hello", Mix.Tasks)   == { :module, Mix.Tasks.Hello }
     assert Mix.Utils.command_to_module("unknown", Mix.Tasks) == { :error, :nofile }
@@ -102,4 +104,5 @@ defmodule Mix.UtilsTest do
       assert :file.read_link("_build/archive/ebin") == { :ok, Path.expand('ebin') }
     end
   end
+
 end