diff --git a/bin/main.ml b/bin/main.ml
index d9a8f494..21561f7e 100644
--- a/bin/main.ml
+++ b/bin/main.ml
@@ -659,75 +659,89 @@ let check_path contexts =
             name
             (hint name (String.Set.to_list contexts))
 
-let resolve_targets ~log common (setup : Main.setup) user_targets =
+type resolve_input =
+  | Path of Path.t
+  | String of string
+
+let resolve_path path ~(setup : Main.setup) =
+  check_path setup.contexts path;
+  let can't_build path =
+    Error (path, target_hint setup path);
+  in
+  if not (Path.is_managed path) then
+    Ok [File path]
+  else if Path.is_in_build_dir path then begin
+    if Build_system.is_target setup.build_system path then
+      Ok [File path]
+    else
+      can't_build path
+  end else
+    match
+      List.filter_map setup.contexts ~f:(fun ctx ->
+        let path = Path.append ctx.Context.build_dir path in
+        if Build_system.is_target setup.build_system path then
+          Some (File path)
+        else
+          None)
+    with
+    | [] -> can't_build path
+    | l  -> Ok l
+
+let resolve_target common ~(setup : Main.setup) s =
+  if String.is_prefix s ~prefix:"@" then begin
+    let pos, is_rec =
+      if String.length s >= 2 && s.[1] = '@' then
+        (2, false)
+      else
+        (1, true)
+    in
+    let s = String.sub s ~pos ~len:(String.length s - pos) in
+    let path = Path.relative Path.root (prefix_target common s) in
+    check_path setup.contexts path;
+    if Path.is_root path then
+      die "@@ on the command line must be followed by a valid alias name"
+    else if not (Path.is_managed path) then
+      die "@@ on the command line must be followed by a relative path"
+    else
+      Ok [if is_rec then Alias_rec path else Alias path]
+  end else begin
+    let path = Path.relative Path.root (prefix_target common s) in
+    resolve_path path ~setup
+  end
+
+let log_targets ~log targets =
+  List.iter targets ~f:(function
+    | File path ->
+      Log.info log @@ "- " ^ (Path.to_string path)
+    | Alias path ->
+      Log.info log @@ "- alias " ^
+                      (Path.to_string_maybe_quoted path)
+    | Alias_rec path ->
+      Log.info log @@ "- recursive alias " ^
+                      (Path.to_string_maybe_quoted path));
+  flush stdout
+
+let resolve_targets_mixed ~log common (setup : Main.setup) user_targets =
   match user_targets with
   | [] -> []
   | _ ->
-    let check_path = check_path setup.contexts in
     let targets =
-      List.map user_targets ~f:(fun s ->
-        if String.is_prefix s ~prefix:"@" then begin
-          let pos, is_rec =
-            if String.length s >= 2 && s.[1] = '@' then
-              (2, false)
-            else
-              (1, true)
-          in
-          let s = String.sub s ~pos ~len:(String.length s - pos) in
-          let path = Path.relative Path.root (prefix_target common s) in
-          check_path path;
-          if Path.is_root path then
-            die "@@ on the command line must be followed by a valid alias name"
-          else if not (Path.is_managed path) then
-            die "@@ on the command line must be followed by a relative path"
-          else
-            Ok [if is_rec then Alias_rec path else Alias path]
-        end else begin
-          let path = Path.relative Path.root (prefix_target common s) in
-          check_path path;
-          let can't_build path =
-            Error (path, target_hint setup path);
-          in
-          if not (Path.is_managed path) then
-            Ok [File path]
-          else if Path.is_in_build_dir path then begin
-            if Build_system.is_target setup.build_system path then
-              Ok [File path]
-            else
-              can't_build path
-          end else
-            match
-              List.filter_map setup.contexts ~f:(fun ctx ->
-                let path = Path.append ctx.Context.build_dir path in
-                if Build_system.is_target setup.build_system path then
-                  Some (File path)
-                else
-                  None)
-            with
-            | [] -> can't_build path
-            | l  -> Ok l
-        end
-      )
-    in
+      List.map user_targets ~f:(function
+        | String s -> resolve_target common ~setup s
+        | Path p -> resolve_path p ~setup) in
     if common.config.display = Verbose then begin
       Log.info log "Actual targets:";
-      let targets =
-        List.concat_map targets ~f:(function
-          | Ok targets -> targets
-          | Error _ -> []) in
-      List.iter targets ~f:(function
-        | File path ->
-          Log.info log @@ "- " ^ (Path.to_string path)
-        | Alias path ->
-          Log.info log @@ "- alias " ^
-                          (Path.to_string_maybe_quoted path)
-        | Alias_rec path ->
-          Log.info log @@ "- recursive alias " ^
-                          (Path.to_string_maybe_quoted path));
-      flush stdout;
+      List.concat_map targets ~f:(function
+        | Ok targets -> targets
+        | Error _ -> [])
+      |> log_targets ~log
     end;
     targets
 
+let resolve_targets ~log common (setup : Main.setup) user_targets =
+  List.map ~f:(fun s -> String s) user_targets
+  |> resolve_targets_mixed ~log common setup
+
 let resolve_targets_exn ~log common setup user_targets =
   resolve_targets ~log common setup user_targets
   |> List.concat_map ~f:(function
@@ -1230,8 +1244,8 @@ let exec =
          [p]
        | `This_abs _ ->
          [])
-      |> List.map ~f:Path.to_string
-      |> resolve_targets ~log common setup
+      |> List.map ~f:(fun p -> Path p)
+      |> resolve_targets_mixed ~log common setup
       |> List.concat_map ~f:(function
         | Ok targets -> targets
         | Error _ -> [])
diff --git a/test/blackbox-tests/dune.inc b/test/blackbox-tests/dune.inc
index af7c5ab8..7295b221 100644
--- a/test/blackbox-tests/dune.inc
+++ b/test/blackbox-tests/dune.inc
@@ -103,6 +103,14 @@
    test-cases/dev-flag-1103
    (progn (run %{exe:cram.exe} -test run.t) (diff? run.t run.t.corrected)))))
 
+(alias
+ (name dune-build-dir-exec-1101)
+ (deps (package dune) (source_tree test-cases/dune-build-dir-exec-1101))
+ (action
+  (chdir
+   test-cases/dune-build-dir-exec-1101
+   (progn (run %{exe:cram.exe} -test run.t) (diff? run.t run.t.corrected)))))
+
 (alias
  (name dune-jbuild-var-case)
  (deps (package dune) (source_tree test-cases/dune-jbuild-var-case))
@@ -764,6 +772,7 @@
   (alias dep-vars)
   (alias depend-on-the-universe)
   (alias dev-flag-1103)
+  (alias dune-build-dir-exec-1101)
   (alias dune-jbuild-var-case)
   (alias dune-ppx-driver-system)
   (alias dune-project-edition)
@@ -858,6 +867,7 @@
   (alias dep-vars)
   (alias depend-on-the-universe)
   (alias dev-flag-1103)
+  (alias dune-build-dir-exec-1101)
   (alias dune-jbuild-var-case)
   (alias dune-ppx-driver-system)
   (alias dune-project-edition)
diff --git a/test/blackbox-tests/test-cases/dune-build-dir-exec-1101/dune b/test/blackbox-tests/test-cases/dune-build-dir-exec-1101/dune
new file mode 100644
index 00000000..8ac60cee
--- /dev/null
+++ b/test/blackbox-tests/test-cases/dune-build-dir-exec-1101/dune
@@ -0,0 +1 @@
+(executable (name main))
\ No newline at end of file
diff --git a/test/blackbox-tests/test-cases/dune-build-dir-exec-1101/dune-project b/test/blackbox-tests/test-cases/dune-build-dir-exec-1101/dune-project
new file mode 100644
index 00000000..6687faf2
--- /dev/null
+++ b/test/blackbox-tests/test-cases/dune-build-dir-exec-1101/dune-project
@@ -0,0 +1 @@
+(lang dune 1.1)
\ No newline at end of file
diff --git a/test/blackbox-tests/test-cases/dune-build-dir-exec-1101/main.ml b/test/blackbox-tests/test-cases/dune-build-dir-exec-1101/main.ml
new file mode 100644
index 00000000..6bf92d61
--- /dev/null
+++ b/test/blackbox-tests/test-cases/dune-build-dir-exec-1101/main.ml
@@ -0,0 +1 @@
+print_endline "foobar";;
diff --git a/test/blackbox-tests/test-cases/dune-build-dir-exec-1101/run.t b/test/blackbox-tests/test-cases/dune-build-dir-exec-1101/run.t
new file mode 100644
index 00000000..4598a1b9
--- /dev/null
+++ b/test/blackbox-tests/test-cases/dune-build-dir-exec-1101/run.t
@@ -0,0 +1,2 @@
+  $ DUNE_BUILD_DIR="$PWD/_custom" dune exec ./main.exe
+  foobar