diff --git a/conf/docs/index.mustache b/conf/docs/index.mustache
index 7bf9e34..d4318a3 100644
--- a/conf/docs/index.mustache
+++ b/conf/docs/index.mustache
@@ -483,5 +483,12 @@ I've added a `--lint-stderr` config option which forces all lint output to `stde
 <h3 id="exp.cli.recursive">Recursive Building</h3>
 
 <p>
-    Adding `--recursive` to the `--walk` command will tell `shifter` to walk the directories recursively looking for `build.json` files. 
+    Adding `--recursive` to the `--walk` command will tell `shifter` to walk the directories recursively looking for `build.json` files.
 </p>
+<p>When building recursively, if you want to produce usable coverage instrumentation, you must also create a .shifter.json file with the coverageRelativeToConfig set to true.</p>
+
+```
+{
+  coverageRelativeToConfig: true
+}
+```
diff --git a/lib/index.js b/lib/index.js
index f6f3e89..19c7d6e 100644
--- a/lib/index.js
+++ b/lib/index.js
@@ -103,6 +103,12 @@ exports.init = function (opts, initCallback) {
                         }
                     }
                 });
+
+                if (options.coverageRelativeToConfig) {
+                    // Since we found a path to the config file, we can build relative to it.
+                    // This is important for coverage reports in recursive builds.
+                    exports.relativeTo = path.resolve(path.dirname(file), './');
+                }
             }
         });
     }
diff --git a/lib/module.js b/lib/module.js
index 562db4f..3cabe3e 100644
--- a/lib/module.js
+++ b/lib/module.js
@@ -382,7 +382,15 @@ var buildCoverage = function (mod, name, callback) {
         logger: log,
         registry: registry
     }),
-        fileName = mod.basefilename || name;
+        fileName = mod.basefilename || name,
+        // The path to the build directory.
+        buildPath = 'build';
+    if (shifter.relativeTo) {
+        // If shifter is being run relative to a .shifter.json, we can make
+        // the coverage file report with relativity to that configuration.
+        // This is required in recursive builds for code coverage generation.
+        buildPath = path.relative(shifter.relativeTo, mod.buildDir);
+    }
 
     queue.read([
         path.join(mod.buildDir, fileName, fileName + '.js')
@@ -391,7 +399,7 @@ var buildCoverage = function (mod, name, callback) {
         .coverage({
             type: coverageType,
             charset: 'utf8',
-            name: 'build/' + fileName + '/' + fileName + '.js'
+            name: buildPath + '/' + fileName + '/' + fileName + '.js'
         })
         .replace(replaceOptions)
         .check()