diff --git a/direnv-cache b/direnv-cache
index 17370ce..9b45f20 100755
--- a/direnv-cache
+++ b/direnv-cache
@@ -70,9 +70,23 @@ getCacheFilePath() {
     echo "${cacheDir}/$(pwd | sha1sum | tr -d ' -')"
 }
 
+switchToDirenvDir() {
+    # Find directory that contains the current .envrc.  Allows direnv-cache to
+    # be called from subdirectories.
+    wd="$(pwd)"
+
+    if [[ -n $DIRENV_DIR ]]; then
+        wd="${DIRENV_DIR#-}"
+    fi
+
+    cd "$wd"
+}
+
 cmd="$1"
 
-if ! [[ -e .envrc ]]; then
+switchToDirenvDir
+
+if ! [[ -e ".envrc" ]]; then
     echo "Error, no .envrc found in current directory"
     exit 1
 fi