diff --git a/CHANGES b/CHANGES
index fbf86829..b19db94c 100644
--- a/CHANGES
+++ b/CHANGES
@@ -33,6 +33,8 @@ Version 0.10.2
   the test client when absolute URLs were requested.
 - Made `@before_first_request` into a decorator as intended.
 - Fixed an etags bug when sending a file streams with a name.
+- Fixed `send_from_directory` not expanding to the application root path
+  correctly.
 
 Version 0.10.1
 --------------
diff --git a/flask/helpers.py b/flask/helpers.py
index 90c2d473..7d688c61 100644
--- a/flask/helpers.py
+++ b/flask/helpers.py
@@ -615,6 +615,8 @@ def send_from_directory(directory, filename, **options):
                     forwarded to :func:`send_file`.
     """
     filename = safe_join(directory, filename)
+    if not os.path.isabs(filename):
+        filename = os.path.join(current_app.root_path, filename)
     if not os.path.isfile(filename):
         raise NotFound()
     options.setdefault('conditional', True)
diff --git a/flask/testsuite/helpers.py b/flask/testsuite/helpers.py
index 549f67fa..7a5600ed 100644
--- a/flask/testsuite/helpers.py
+++ b/flask/testsuite/helpers.py
@@ -304,8 +304,11 @@ class SendfileTestCase(FlaskTestCase):
             # etags
             self.assert_equal(len(captured), 1)
             with catch_warnings() as captured:
-                class PyStringIO(StringIO):
-                    pass
+                class PyStringIO(object):
+                    def __init__(self, *args, **kwargs):
+                        self._io = StringIO(*args, **kwargs)
+                    def __getattr__(self, name):
+                        return getattr(self._io, name)
                 f = PyStringIO('Test')
                 f.name = 'test.txt'
                 rv = flask.send_file(f)
@@ -407,6 +410,17 @@ class SendfileTestCase(FlaskTestCase):
             self.assert_equal(cc.max_age, 10)
             rv.close()
 
+    def test_send_from_directory(self):
+        app = flask.Flask(__name__)
+        app.testing = True
+        app.root_path = os.path.join(os.path.dirname(__file__),
+                                     'test_apps', 'subdomaintestmodule')
+        with app.test_request_context():
+            rv = flask.send_from_directory('static', 'hello.txt')
+            rv.direct_passthrough = False
+            self.assert_equal(rv.get_data().strip(), b'Hello Subdomain')
+            rv.close()
+
 
 class LoggingTestCase(FlaskTestCase):