diff --git a/bin/zeolite-setup.hs b/bin/zeolite-setup.hs
--- a/bin/zeolite-setup.hs
+++ b/bin/zeolite-setup.hs
@@ -19,7 +19,6 @@
 import Control.Monad (when)
 import System.Directory
 import System.Exit
-import System.FilePath
 import System.IO
 
 import Cli.CompileOptions
@@ -115,16 +114,15 @@
 initLibraries :: IO ()
 initLibraries = do
   path <- rootPath >>= canonicalizePath
-  let libraries' = map (path </>) libraries
   let options = CompileOptions {
       coHelp = HelpNotNeeded,
       coPublicDeps = [],
       coPrivateDeps = [],
-      coSources = libraries',
+      coSources = libraries,
       coExtraFiles = [],
       coExtraPaths = [],
       coExtraRequires = [],
-      coSourcePrefix = "",
+      coSourcePrefix = path,
       coMode = CompileRecompile,
       coOutputName = "",
       coForce = ForceAll
diff --git a/src/Cli/Compiler.hs b/src/Cli/Compiler.hs
--- a/src/Cli/Compiler.hs
+++ b/src/Cli/Compiler.hs
@@ -122,7 +122,7 @@
               let (RecompileMetadata p2 d is is2 es ep ec m o) = rm'
               -- In case the module is manually configured with a p such as "..",
               -- since the absolute path might not be known ahead of time.
-              absolute <- canonicalizePath d0
+              absolute <- canonicalizePath (p </> d0)
               let fixed = fixPath (absolute </> p2)
               let recompile = CompileOptions {
                   coHelp = h,
diff --git a/tests/multiple-defs/README.md b/tests/multiple-defs/README.md
--- a/tests/multiple-defs/README.md
+++ b/tests/multiple-defs/README.md
@@ -8,7 +8,7 @@
 
 ```shell
 ZEOLITE_PATH=$(zeolite --get-path)
-zeolite -r $ZEOLITE_PATH/tests/multiple-defs
+zeolite -p $ZEOLITE_PATH -r tests/multiple-defs
 ```
 
 The compiler error should look something like this:
diff --git a/zeolite-lang.cabal b/zeolite-lang.cabal
--- a/zeolite-lang.cabal
+++ b/zeolite-lang.cabal
@@ -1,7 +1,7 @@
 cabal-version:       2.2
 
 name:                zeolite-lang
-version:             0.1.3.0
+version:             0.1.3.1
 synopsis:            Zeolite is a statically-typed, general-purpose programming language.
 
 description: