diff --git a/src/cli.js b/src/cli.js
index 974c12c6..70a99e49 100755
--- a/src/cli.js
+++ b/src/cli.js
@@ -256,6 +256,7 @@ async function runCmd (argv, stdout, stderr) {
       const buildFile = eval("require.resolve")(resolve(args._[1] || "."));
       const esm = buildFile.endsWith('.mjs') || !buildFile.endsWith('.cjs') && hasTypeModule(buildFile);
       const ext = buildFile.endsWith('.cjs') ? '.cjs' : esm && (buildFile.endsWith('.mjs') || !hasTypeModule(buildFile)) ? '.mjs' : '.js';
+      const sourceMapBasePrefix = relative(outDir, process.cwd());
       const ncc = require("./index.js")(
         buildFile,
         {
@@ -264,6 +265,7 @@ async function runCmd (argv, stdout, stderr) {
           externals: args["--external"],
           sourceMap: args["--source-map"] || run,
           sourceMapRegister: args["--no-source-map-register"] ? false : undefined,
+          sourceMapBasePrefix,
           assetBuilds: args["--asset-builds"] ? true : false,
           cache: args["--no-cache"] ? false : undefined,
           watch: args["--watch"],
diff --git a/src/index.js b/src/index.js
index 8ffa3022..0373a1e8 100644
--- a/src/index.js
+++ b/src/index.js
@@ -295,7 +295,11 @@ function ncc (
       libraryTarget: esm ? 'module' : 'commonjs2',
       strictModuleExceptionHandling: true,
       module: esm,
-      devtoolModuleFilenameTemplate: sourceMapBasePrefix + '[resource-path]'
+      // if prefix is `../`, then final path results in `.././`
+      // if prefix is `../../`, then final path results results in `../.././`
+      // which ideally would have been normalized by webpack, but alas it isnt,
+      // so we need to adjust sourceMapBasePrefix
+      devtoolModuleFilenameTemplate: sourceMapBasePrefix.replace(/\/$/, '') + '[resource-path]'
     },
     resolve: {
       extensions: SUPPORTED_EXTENSIONS,
diff --git a/test/cli.js b/test/cli.js
index 1ac38536..500b07ce 100644
--- a/test/cli.js
+++ b/test/cli.js
@@ -106,7 +106,7 @@ module.exports = [
     env: {
       TYPESCRIPT_LOOKUP_PATH: '/tmp/nowhere'
     },
-    expect (code, stdout) { 
+    expect (code, stdout) {
       return code === 0 && stdout.indexOf('ncc built-in') !== -1;
     },
   },
@@ -121,7 +121,7 @@ module.exports = [
     args: ["build", "-o", "tmp", "test/fixtures/sourcemap-resource-path/index.ts", "--source-map", "--no-source-map-register"],
     expect (code, stdout, stderr) {
       const fs = require('fs');
-      const map = JSON.parse(fs.readFileSync(join('tmp', 'index.js.map'), 'utf8'));   
+      const map = JSON.parse(fs.readFileSync(join('tmp', 'index.js.map'), 'utf8'));
       const paths = map.sources.map(source=>pathResolve(join('tmp', source)));
       function hasPath(path) {
         return paths.includes(pathResolve(path));
@@ -133,12 +133,34 @@ module.exports = [
     args: ["build", "-o", "tmp", "test/fixtures/sourcemap-resource-path/index.ts", "-m", "--source-map", "--no-source-map-register"],
     expect (code, stdout, stderr) {
       const fs = require('fs');
-      const map = JSON.parse(fs.readFileSync(join('tmp', 'index.js.map'), 'utf8'));   
+      const map = JSON.parse(fs.readFileSync(join('tmp', 'index.js.map'), 'utf8'));
       const paths = map.sources.map(source=>pathResolve(join('tmp', source)));
       function hasPath(path) {
         return paths.includes(pathResolve(path));
       }
       return code === 0 && hasPath('test/fixtures/sourcemap-resource-path/index.ts') && hasPath('test/fixtures/sourcemap-resource-path/sum.ts');
     }
+  },
+  {
+    args: ["build", "-o", "tmp", "test/fixtures/sourcemap-base-prefix/index.js", "--source-map"],
+    expect(code) {
+      const fs = require('fs');
+      const map = JSON.parse(fs.readFileSync(join('tmp', 'index.js.map'), 'utf8'));
+      const actual = map.sources[1];
+      const expected = '../test/fixtures/sourcemap-base-prefix/index.js'
+      if (actual !== expected) console.log({ actual, expected })
+      return code === 0 && actual === expected;
+    }
+  },
+  {
+    args: ["build", "-o", "tmp/sourcemap-base-prefix", "test/fixtures/sourcemap-base-prefix/index.js", "--source-map"],
+    expect(code) {
+      const fs = require('fs');
+      const map = JSON.parse(fs.readFileSync(join('tmp', 'sourcemap-base-prefix', 'index.js.map'), 'utf8'));
+      const actual = map.sources[1];
+      const expected = '../../test/fixtures/sourcemap-base-prefix/index.js'
+      if (actual !== expected) console.log({ actual, expected })
+      return code === 0 && actual === expected;
+    }
   }
 ]
diff --git a/test/fixtures/sourcemap-base-prefix/index.js b/test/fixtures/sourcemap-base-prefix/index.js
new file mode 100644
index 00000000..5f47e93c
--- /dev/null
+++ b/test/fixtures/sourcemap-base-prefix/index.js
@@ -0,0 +1 @@
+console.log('asdf');