diff --git a/.prettierrc.js b/.prettierrc.js
new file mode 100644
index 000000000..50e441707
--- /dev/null
+++ b/.prettierrc.js
@@ -0,0 +1,5 @@
+// added for Jest inline snapshots to not use default Prettier config
+module.exports = {
+  bracketSpacing: false,
+  trailingComma: "all"
+}
diff --git a/packages/cli/src/commands/upgrade/__tests__/upgrade.test.js b/packages/cli/src/commands/upgrade/__tests__/upgrade.test.js
index edef33b7d..d66a4bb37 100644
--- a/packages/cli/src/commands/upgrade/__tests__/upgrade.test.js
+++ b/packages/cli/src/commands/upgrade/__tests__/upgrade.test.js
@@ -12,18 +12,7 @@ import loadConfig from '../../../tools/config';
 jest.mock('https');
 jest.mock('fs');
 jest.mock('path');
-jest.mock('execa', () => {
-  const module = jest.fn((command, args) => {
-    mockPushLog('$', 'execa', command, args);
-    if (command === 'npm' && args[3] === '--json') {
-      return Promise.resolve({
-        stdout: '{"react": "16.6.3"}',
-      });
-    }
-    return Promise.resolve({stdout: ''});
-  });
-  return module;
-});
+jest.mock('execa');
 jest.mock(
   '/project/root/node_modules/react-native/package.json',
   () => ({name: 'react-native', version: '0.57.8'}),
@@ -34,6 +23,20 @@ jest.mock(
   () => ({name: 'TestApp', dependencies: {'react-native': '^0.57.8'}}),
   {virtual: true},
 );
+jest.mock(
+  '/project/root/NestedApp/node_modules/react-native/package.json',
+  () => ({name: 'react-native', version: '0.57.8'}),
+  {virtual: true},
+);
+jest.mock(
+  '/project/root/NestedApp/package.json',
+  () => ({
+    name: 'TestAppNested',
+    dependencies: {'react-native': '^0.57.8'},
+  }),
+  {virtual: true},
+);
+jest.mock('../../../tools/config');
 jest.mock('../../../tools/packageManager', () => ({
   install: args => {
     mockPushLog('$ yarn add', ...args);
@@ -52,14 +55,32 @@ jest.mock('@react-native-community/cli-tools', () => ({
   },
 }));
 
+const mockExecaDefault = (command, args) => {
+  mockPushLog('$', 'execa', command, args);
+  if (command === 'npm' && args[3] === '--json') {
+    return Promise.resolve({stdout: '{"react": "16.6.3"}'});
+  }
+  if (command === 'git' && args[0] === 'rev-parse') {
+    return Promise.resolve({stdout: ''});
+  }
+  return Promise.resolve({stdout: ''});
+};
+
+const mockExecaNested = (command, args) => {
+  mockPushLog('$', 'execa', command, args);
+  if (command === 'npm' && args[3] === '--json') {
+    return Promise.resolve({stdout: '{"react": "16.6.3"}'});
+  }
+  if (command === 'git' && args[0] === 'rev-parse') {
+    return Promise.resolve({stdout: 'NestedApp/'});
+  }
+  return Promise.resolve({stdout: ''});
+};
+
 const currentVersion = '0.57.8';
 const newVersion = '0.58.4';
 const olderVersion = '0.56.0';
-
-jest.mock('../../../tools/config');
-
 const ctx = loadConfig();
-
 const opts = {
   legacy: false,
 };
@@ -75,11 +96,13 @@ const flushOutput = () => stripAnsi(logs.join('\n'));
 
 beforeEach(() => {
   jest.clearAllMocks();
+  jest.restoreAllMocks();
   // $FlowFixMe
   fs.writeFileSync = jest.fn(filename => mockPushLog('[fs] write', filename));
   // $FlowFixMe
   fs.unlinkSync = jest.fn((...args) => mockPushLog('[fs] unlink', args));
   logs = [];
+  (execa: any).mockImplementation(mockExecaDefault);
 });
 
 afterEach(() => {
@@ -94,6 +117,22 @@ test('uses latest version of react-native when none passed', async () => {
   expect(execa).toBeCalledWith('npm', ['info', 'react-native', 'version']);
 }, 60000);
 
+test('applies patch in current working directory when nested', async () => {
+  (fetch: any).mockImplementation(() => Promise.resolve(samplePatch));
+  (execa: any).mockImplementation(mockExecaNested);
+  const config = {...ctx, root: '/project/root/NestedApp'};
+  await upgrade.func([newVersion], config, opts);
+
+  expect(execa).toBeCalledWith('git', [
+    'apply',
+    'tmp-upgrade-rn.patch',
+    '--exclude=NestedApp/package.json',
+    '-p2',
+    '--3way',
+    '--directory=NestedApp/',
+  ]);
+});
+
 test('errors when invalid version passed', async () => {
   await upgrade.func(['next'], ctx, opts);
   expect(logger.error).toBeCalledWith(
@@ -137,9 +176,10 @@ test('fetches regular patch, adds remote, applies patch, installs deps, removes
   expect(flushOutput()).toMatchInlineSnapshot(`
 "info Fetching diff between v0.57.8 and v0.58.4...
 [fs] write tmp-upgrade-rn.patch
-$ execa git apply --check tmp-upgrade-rn.patch --exclude=package.json -p2 --3way
+$ execa git rev-parse --show-prefix
+$ execa git apply --check tmp-upgrade-rn.patch --exclude=package.json -p2 --3way --directory=
 info Applying diff...
-$ execa git apply tmp-upgrade-rn.patch --exclude=package.json -p2 --3way
+$ execa git apply tmp-upgrade-rn.patch --exclude=package.json -p2 --3way --directory=
 [fs] unlink tmp-upgrade-rn.patch
 $ execa git status -s
 info Installing \\"react-native@0.58.4\\" and its peer dependencies...
@@ -158,6 +198,31 @@ success Upgraded React Native to v0.58.4 🎉. Now you can review and commit the
     }),
   ).toMatchSnapshot('RnDiffApp is replaced with app name (TestApp)');
 }, 60000);
+test('fetches regular patch, adds remote, applies patch, installs deps, removes remote when updated from nested directory', async () => {
+  (fetch: any).mockImplementation(() => Promise.resolve(samplePatch));
+  (execa: any).mockImplementation(mockExecaNested);
+  const config = {...ctx, root: '/project/root/NestedApp'};
+  await upgrade.func([newVersion], config, opts);
+  expect(flushOutput()).toMatchInlineSnapshot(`
+"info Fetching diff between v0.57.8 and v0.58.4...
+[fs] write tmp-upgrade-rn.patch
+$ execa git rev-parse --show-prefix
+$ execa git apply --check tmp-upgrade-rn.patch --exclude=NestedApp/package.json -p2 --3way --directory=NestedApp/
+info Applying diff...
+$ execa git apply tmp-upgrade-rn.patch --exclude=NestedApp/package.json -p2 --3way --directory=NestedApp/
+[fs] unlink tmp-upgrade-rn.patch
+$ execa git status -s
+info Installing \\"react-native@0.58.4\\" and its peer dependencies...
+$ execa npm info react-native@0.58.4 peerDependencies --json
+$ yarn add react-native@0.58.4 react@16.6.3
+$ execa git add package.json
+$ execa git add yarn.lock
+$ execa git add package-lock.json
+info Running \\"git status\\" to check what changed...
+$ execa git status
+success Upgraded React Native to v0.58.4 🎉. Now you can review and commit the changes"
+`);
+}, 60000);
 test('cleans up if patching fails,', async () => {
   (fetch: any).mockImplementation(() => Promise.resolve(samplePatch));
   (execa: any).mockImplementation((command, args) => {
@@ -173,6 +238,9 @@ test('cleans up if patching fails,', async () => {
         stderr: 'error: .flowconfig: does not exist in index\n',
       });
     }
+    if (command === 'git' && args[0] === 'rev-parse') {
+      return Promise.resolve({stdout: ''});
+    }
     return Promise.resolve({stdout: ''});
   });
   try {
@@ -185,9 +253,10 @@ test('cleans up if patching fails,', async () => {
   expect(flushOutput()).toMatchInlineSnapshot(`
 "info Fetching diff between v0.57.8 and v0.58.4...
 [fs] write tmp-upgrade-rn.patch
-$ execa git apply --check tmp-upgrade-rn.patch --exclude=package.json -p2 --3way
+$ execa git rev-parse --show-prefix
+$ execa git apply --check tmp-upgrade-rn.patch --exclude=package.json -p2 --3way --directory=
 info Applying diff (excluding: package.json, .flowconfig)...
-$ execa git apply tmp-upgrade-rn.patch --exclude=package.json --exclude=.flowconfig -p2 --3way
+$ execa git apply tmp-upgrade-rn.patch --exclude=package.json --exclude=.flowconfig -p2 --3way --directory=
 error: .flowconfig: does not exist in index
 error Automatically applying diff failed
 [fs] unlink tmp-upgrade-rn.patch
diff --git a/packages/cli/src/commands/upgrade/upgrade.js b/packages/cli/src/commands/upgrade/upgrade.js
index 816e6cdd0..e5f153753 100644
--- a/packages/cli/src/commands/upgrade/upgrade.js
+++ b/packages/cli/src/commands/upgrade/upgrade.js
@@ -137,9 +137,16 @@ const applyPatch = async (
   tmpPatchFile: string,
 ) => {
   let filesToExclude = ['package.json'];
+  // $FlowFixMe ThenableChildProcess is incompatible with Promise
+  const {stdout: relativePathFromRoot} = await execa('git', [
+    'rev-parse',
+    '--show-prefix',
+  ]);
   try {
     try {
-      const excludes = filesToExclude.map(e => `--exclude=${e}`);
+      const excludes = filesToExclude.map(
+        e => `--exclude=${path.join(relativePathFromRoot, e)}`,
+      );
       await execa('git', [
         'apply',
         '--check',
@@ -147,6 +154,7 @@ const applyPatch = async (
         ...excludes,
         '-p2',
         '--3way',
+        `--directory=${relativePathFromRoot}`,
       ]);
       logger.info('Applying diff...');
     } catch (error) {
@@ -160,8 +168,17 @@ const applyPatch = async (
 
       logger.info(`Applying diff (excluding: ${filesToExclude.join(', ')})...`);
     } finally {
-      const excludes = filesToExclude.map(e => `--exclude=${e}`);
-      await execa('git', ['apply', tmpPatchFile, ...excludes, '-p2', '--3way']);
+      const excludes = filesToExclude.map(
+        e => `--exclude=${path.join(relativePathFromRoot, e)}`,
+      );
+      await execa('git', [
+        'apply',
+        tmpPatchFile,
+        ...excludes,
+        '-p2',
+        '--3way',
+        `--directory=${relativePathFromRoot}`,
+      ]);
     }
   } catch (error) {
     if (error.stderr) {