diff --git a/crate2nix/src/resolve.rs b/crate2nix/src/resolve.rs
index 4153c83e..95a0927d 100644
--- a/crate2nix/src/resolve.rs
+++ b/crate2nix/src/resolve.rs
@@ -472,7 +472,7 @@ impl ResolvedSource {
                 ResolvedSource::git_or_local_directory(config, package, &package_path, source)
             }
             None => Ok(ResolvedSource::LocalDirectory(LocalDirectorySource {
-                path: ResolvedSource::relative_directory(config, package_path)?,
+                path: PathBuf::from("/").join(ResolvedSource::relative_directory(config, package_path)?),
             })),
         }
     }
diff --git a/crate2nix/templates/Cargo.nix.tera b/crate2nix/templates/Cargo.nix.tera
index 8637ef07..50045212 100644
--- a/crate2nix/templates/Cargo.nix.tera
+++ b/crate2nix/templates/Cargo.nix.tera
@@ -28,6 +28,7 @@
   ? if builtins.pathExists ./crate-config.nix
     then pkgs.callPackage ./crate-config.nix {}
     else {}
+, localCratesSrc ? src: ./. + src
 }:
 
 rec {
@@ -153,7 +154,7 @@ rec {
         {%- elif crate.source.Nix.file.package %}
         src = pkgs.callPackage {{crate.source.Nix.file.package | safe}} {};
         {%- elif crate.source.LocalDirectory.path %}
-        src = lib.cleanSourceWith { filter = sourceFilter;  src = {{crate.source.LocalDirectory.path | safe}}; };
+        src = lib.cleanSourceWith { filter = sourceFilter; src = localCratesSrc "{{crate.source.LocalDirectory.path | safe}}"; };
         {%- elif crate.source.Git %}
         workspace_member = null;
         src = pkgs.fetchgit {