diff --git a/src/unit/engine/PhutilUnitTestEngine.php b/src/unit/engine/PhutilUnitTestEngine.php
--- a/src/unit/engine/PhutilUnitTestEngine.php
+++ b/src/unit/engine/PhutilUnitTestEngine.php
@@ -197,20 +197,21 @@
         continue;
       }
 
-      if ($path == $library_root) {
-        $paths[$library_name.':.'] = array(
-          'library' => $library_name,
-          'path'    => '__tests__/',
-        );
-        continue;
+      foreach (Filesystem::walkToRoot($path, $library_root) as $subpath) {
+        if ($subpath == $library_root) {
+          $paths[$library_name.':.'] = array(
+            'library' => $library_name,
+            'path'    => '__tests__/',
+          );
+        } else {
+          $library_subpath = Filesystem::readablePath($subpath, $library_root);
+
+          $paths[$library_name.':'.$library_subpath] = array(
+            'library' => $library_name,
+            'path'    => $library_subpath.'/__tests__/',
+          );
+        }
       }
-
-      do {
-        $paths[$library_name.':'.$library_path] = array(
-          'library' => $library_name,
-          'path'    => $library_path.'/__tests__/',
-        );
-      } while (($library_path = dirname($library_path)) != '.');
     }
 
     return $paths;
diff --git a/src/unit/engine/__tests__/PhutilUnitTestEngineTestCase.php b/src/unit/engine/__tests__/PhutilUnitTestEngineTestCase.php
--- a/src/unit/engine/__tests__/PhutilUnitTestEngineTestCase.php
+++ b/src/unit/engine/__tests__/PhutilUnitTestEngineTestCase.php
@@ -142,6 +142,7 @@
 
           dirname(dirname(__FILE__)).'/__tests__/',
           dirname(dirname(dirname(__FILE__))).'/__tests__/',
+          phutil_get_library_root('arcanist').'/__tests__/',
         ),
       ),
       'normal directory' => array(
@@ -151,25 +152,26 @@
         array(
           dirname(dirname(__FILE__)).'/__tests__/',
           dirname(dirname(dirname(__FILE__))).'/__tests__/',
+          phutil_get_library_root('arcanist').'/__tests__/',
         ),
       ),
       'library root' => array(
-        array(phutil_get_library_root()),
-        array(phutil_get_library_root().'/__tests__/'),
+        array(phutil_get_library_root('arcanist')),
+        array(phutil_get_library_root('arcanist').'/__tests__/'),
       ),
     );
 
     $test_engine = id(new PhutilUnitTestEngine())
       ->setWorkingCopy($this->getWorkingCopy());
 
+    $library = phutil_get_current_library_name();
+    $library_root = phutil_get_library_root($library);
+
     foreach ($tests as $name => $test) {
-      list($paths, $tests) = $test;
+      list($paths, $test_paths) = $test;
       $expected = array();
 
-      foreach ($tests as $path) {
-        $library_root = phutil_get_library_root_for_path($path);
-        $library = phutil_get_library_name_for_root($library_root);
-
+      foreach ($test_paths as $path) {
         $expected[] = array(
           'library' => $library,
           'path' => Filesystem::readablePath($path, $library_root),