diff --git a/poetry/core/json/schemas/poetry-schema.json b/poetry/core/json/schemas/poetry-schema.json
index 10aff39e5..7a558d50c 100644
--- a/poetry/core/json/schemas/poetry-schema.json
+++ b/poetry/core/json/schemas/poetry-schema.json
@@ -296,6 +296,10 @@
                     "type": "string",
                     "description": "The revision to checkout."
                 },
+                "subdirectory": {
+                    "type": "string",
+                    "description": "path relative to repositories root, where package is located"
+                },
                 "python": {
                     "type": "string",
                     "description": "The python versions for which the dependency should be installed."
diff --git a/poetry/core/packages/package.py b/poetry/core/packages/package.py
index 023b7e7dc..4b683818d 100644
--- a/poetry/core/packages/package.py
+++ b/poetry/core/packages/package.py
@@ -64,6 +64,7 @@ def __init__(self, name, version, pretty_version=None):
         self.source_type = ""
         self.source_reference = ""
         self.source_url = ""
+        self.source_subdirectory = ""
 
         self.requires = []
         self.dev_requires = []
@@ -299,6 +300,7 @@ def add_dependency(
                     rev=constraint.get("rev", None),
                     category=category,
                     optional=optional,
+                    subdirectory=constraint.get("subdirectory", None),
                 )
             elif "file" in constraint:
                 file_path = Path(constraint["file"])
diff --git a/poetry/core/packages/vcs_dependency.py b/poetry/core/packages/vcs_dependency.py
index 119afb64a..aef60464d 100644
--- a/poetry/core/packages/vcs_dependency.py
+++ b/poetry/core/packages/vcs_dependency.py
@@ -16,8 +16,9 @@ def __init__(
         branch=None,
         tag=None,
         rev=None,
-        category="main",
         optional=False,
+        category="main",
+        subdirectory=None,
     ):
         self._vcs = vcs
         self._source = source
@@ -29,6 +30,7 @@ def __init__(
         self._branch = branch
         self._tag = tag
         self._rev = rev
+        self._subdirectory = subdirectory
 
         super(VCSDependency, self).__init__(
             name, "*", category=category, optional=optional, allows_prereleases=True
@@ -54,6 +56,10 @@ def tag(self):
     def rev(self):
         return self._rev
 
+    @property
+    def subdirectory(self):
+        return self._subdirectory
+
     @property
     def reference(self):  # type: () -> str
         return self._branch or self._tag or self._rev
@@ -87,6 +93,9 @@ def base_pep_508_name(self):  # type: () -> str
                 self._vcs, parsed_url.format(), self.reference
             )
 
+        if self.subdirectory:
+            requirement += "#subdirectory={}".format(self.subdirectory)
+
         return requirement
 
     def is_vcs(self):  # type: () -> bool
diff --git a/poetry/core/vcs/git.py b/poetry/core/vcs/git.py
index 566a7f6be..bdfb9fa84 100644
--- a/poetry/core/vcs/git.py
+++ b/poetry/core/vcs/git.py
@@ -14,7 +14,8 @@
     "port": r"\d+",
     "path": r"[\w~.\-/\\]+",
     "name": r"[\w~.\-]+",
-    "rev": r"[^@#]+",
+    "rev": r"[^@#?]+",
+    "subdir": r"[\w\-/\\]+",
 }
 
 PATTERNS = [
@@ -27,6 +28,7 @@
         r"(?P<pathname>[:/\\]({path}[/\\])?"
         r"((?P<name>{name}?)(\.git|[/\\])?)?)"
         r"([@#](?P<rev>{rev}))?"
+        r"(\?subdirectory=(?P<subdirectory>{subdir}))?"
         r"$".format(
             user=pattern_formats["user"],
             resource=pattern_formats["resource"],
@@ -34,6 +36,7 @@
             path=pattern_formats["path"],
             name=pattern_formats["name"],
             rev=pattern_formats["rev"],
+            subdir=pattern_formats["subdir"],
         )
     ),
     re.compile(
@@ -45,6 +48,7 @@
         r"(?P<pathname>({path})"
         r"(?P<name>{name})(\.git|/)?)"
         r"([@#](?P<rev>{rev}))?"
+        r"(\?subdirectory=(?P<subdirectory>{subdir}))?"
         r"$".format(
             protocol=pattern_formats["protocol"],
             user=pattern_formats["user"],
@@ -53,6 +57,7 @@
             path=pattern_formats["path"],
             name=pattern_formats["name"],
             rev=pattern_formats["rev"],
+            subdir=pattern_formats["subdir"],
         )
     ),
     re.compile(
@@ -62,6 +67,7 @@
         r"(?P<pathname>([:/]{path}/)"
         r"(?P<name>{name})(\.git|/)?)"
         r"([@#](?P<rev>{rev}))?"
+        r"(\?subdirectory=(?P<subdirectory>{subdir}))?"
         r"$".format(
             user=pattern_formats["user"],
             resource=pattern_formats["resource"],
@@ -69,6 +75,7 @@
             path=pattern_formats["path"],
             name=pattern_formats["name"],
             rev=pattern_formats["rev"],
+            subdir=pattern_formats["subdir"],
         )
     ),
     re.compile(
@@ -78,19 +85,23 @@
         r"(?P<pathname>({path})"
         r"(?P<name>{name})(\.git|/)?)"
         r"([@#](?P<rev>{rev}))?"
+        r"(\?subdirectory=(?P<subdirectory>{subdir}))?"
         r"$".format(
             user=pattern_formats["user"],
             resource=pattern_formats["resource"],
             path=pattern_formats["path"],
             name=pattern_formats["name"],
             rev=pattern_formats["rev"],
+            subdir=pattern_formats["subdir"],
         )
     ),
 ]
 
 
 class ParsedUrl:
-    def __init__(self, protocol, resource, pathname, user, port, name, rev):
+    def __init__(
+        self, protocol, resource, pathname, user, port, name, rev, subdirectory
+    ):
         self.protocol = protocol
         self.resource = resource
         self.pathname = pathname
@@ -98,6 +109,7 @@ def __init__(self, protocol, resource, pathname, user, port, name, rev):
         self.port = port
         self.name = name
         self.rev = rev
+        self.subdirectory = subdirectory
 
     @classmethod
     def parse(cls, url):  # type: () -> ParsedUrl
@@ -113,6 +125,7 @@ def parse(cls, url):  # type: () -> ParsedUrl
                     groups.get("port"),
                     groups.get("name"),
                     groups.get("rev"),
+                    groups.get("subdirectory"),
                 )
 
         raise ValueError('Invalid git url "{}"'.format(url))
@@ -128,13 +141,17 @@ def url(self):  # type: () -> str
         )
 
     def format(self):
-        return "{}".format(self.url, "#{}".format(self.rev) if self.rev else "",)
+        return "{}".format(
+            self.url,
+            "#{}".format(self.rev) if self.rev else "",
+            "?subdirectory={}".format(self.subdirectory) if self.subdirectory else "",
+        )
 
     def __str__(self):  # type: () -> str
         return self.format()
 
 
-GitUrl = namedtuple("GitUrl", ["url", "revision"])
+GitUrl = namedtuple("GitUrl", ["url", "revision", "subdirectory"])
 
 
 class GitConfig:
@@ -174,7 +191,11 @@ def normalize_url(cls, url):  # type: (str) -> GitUrl
 
         formatted = re.sub(r"^git\+", "", url)
         if parsed.rev:
-            formatted = re.sub(r"[#@]{}$".format(parsed.rev), "", formatted)
+            formatted = re.sub(r"[#@]{}(\?.*)?$".format(parsed.rev), "", formatted)
+        if parsed.subdirectory:
+            formatted = re.sub(
+                r"\?subdirectory={}$".format(parsed.subdirectory), "", formatted
+            )
 
         altered = parsed.format() != formatted
 
@@ -186,11 +207,13 @@ def normalize_url(cls, url):  # type: (str) -> GitUrl
             elif re.match(r"^git\+file", url):
                 normalized = re.sub(r"git\+", "", url)
             else:
-                normalized = re.sub(r"^(?:git\+)?ssh://", "", url)
+                normalized = re.sub(r"^(?:git\+)?ssh://", "", formatted)
         else:
             normalized = parsed.format()
 
-        return GitUrl(re.sub(r"#[^#]*$", "", normalized), parsed.rev)
+        return GitUrl(
+            re.sub(r"#[^#]*$", "", normalized), parsed.rev, parsed.subdirectory
+        )
 
     @property
     def config(self):  # type: () -> GitConfig
@@ -229,6 +252,8 @@ def rev_parse(self, rev, folder=None):  # type: (...) -> str
                 folder.as_posix(),
             ]
 
+        # We need "^{commit}" to ensure that the commit SHA of the commit the
+        # tag points to is returned, even in the case of annotated tags.
         args += ["rev-parse", rev + "^{commit}"]
 
         return self.run(*args)
diff --git a/tests/packages/test_package.py b/tests/packages/test_package.py
index e6eeb7eb3..8edaca206 100644
--- a/tests/packages/test_package.py
+++ b/tests/packages/test_package.py
@@ -4,6 +4,7 @@
 import pytest
 
 from poetry.core.packages import Package
+from poetry.core.packages import VCSDependency
 
 
 def test_package_authors():
@@ -37,3 +38,18 @@ def test_package_add_dependency_vcs_category_default_main():
         "poetry", constraint={"git": "https://github.com/python-poetry/poetry.git"}
     )
     assert dependency.category == "main"
+
+
+def test_package_add_dependency_vcs__with_subdirectory():
+    package = Package("foo", "0.1.0")
+
+    dependency = package.add_dependency(
+        "poetry",
+        constraint={
+            "git": "https://github.com/demo/project_in_subdirectory.git",
+            "subdirectory": "mypackage",
+        },
+    )
+    assert dependency.source == "https://github.com/demo/project_in_subdirectory.git"
+    assert dependency.subdirectory == "mypackage"
+    assert isinstance(dependency, VCSDependency)
diff --git a/tests/packages/test_vcs_dependency.py b/tests/packages/test_vcs_dependency.py
index 94ec591f3..8a2421acf 100644
--- a/tests/packages/test_vcs_dependency.py
+++ b/tests/packages/test_vcs_dependency.py
@@ -61,6 +61,19 @@ def test_to_pep_508_in_extras():
     assert expected == dependency.to_pep_508()
 
 
+def test_to_pep_508_with_subdirectory():
+    dependency = VCSDependency(
+        "poetry",
+        "git",
+        "https://github.com/python-poetry/poetry.git",
+        subdirectory="mypackage",
+    )
+
+    expected = "poetry @ git+https://github.com/python-poetry/poetry.git@master#subdirectory=mypackage"
+
+    assert expected == dependency.to_pep_508()
+
+
 @pytest.mark.parametrize("category", ["main", "dev"])
 def test_category(category):
     dependency = VCSDependency(
diff --git a/tests/vcs/test_vcs.py b/tests/vcs/test_vcs.py
index c2f888fbd..766073d00 100644
--- a/tests/vcs/test_vcs.py
+++ b/tests/vcs/test_vcs.py
@@ -10,70 +10,106 @@
     [
         (
             "git+ssh://user@hostname:project.git#commit",
-            GitUrl("user@hostname:project.git", "commit"),
+            GitUrl("user@hostname:project.git", "commit", None),
         ),
         (
             "git+http://user@hostname/project/blah.git@commit",
-            GitUrl("http://user@hostname/project/blah.git", "commit"),
+            GitUrl("http://user@hostname/project/blah.git", "commit", None),
         ),
         (
             "git+https://user@hostname/project/blah.git",
-            GitUrl("https://user@hostname/project/blah.git", None),
+            GitUrl("https://user@hostname/project/blah.git", None, None),
         ),
         (
             "git+https://user@hostname/project~_-.foo/blah~_-.bar.git",
-            GitUrl("https://user@hostname/project~_-.foo/blah~_-.bar.git", None),
+            GitUrl("https://user@hostname/project~_-.foo/blah~_-.bar.git", None, None),
         ),
         (
             "git+https://user@hostname:project/blah.git",
-            GitUrl("https://user@hostname/project/blah.git", None),
+            GitUrl("https://user@hostname/project/blah.git", None, None),
         ),
         (
             "git+ssh://git@github.com:sdispater/poetry.git#v1.0.27",
-            GitUrl("git@github.com:sdispater/poetry.git", "v1.0.27"),
+            GitUrl("git@github.com:sdispater/poetry.git", "v1.0.27", None),
         ),
         (
             "git+ssh://git@github.com:/sdispater/poetry.git",
-            GitUrl("git@github.com:/sdispater/poetry.git", None),
+            GitUrl("git@github.com:/sdispater/poetry.git", None, None),
+        ),
+        (
+            "git+ssh://git@github.com:org/repo",
+            GitUrl("git@github.com:org/repo", None, None),
         ),
-        ("git+ssh://git@github.com:org/repo", GitUrl("git@github.com:org/repo", None),),
         (
             "git+ssh://git@github.com/org/repo",
-            GitUrl("ssh://git@github.com/org/repo", None),
+            GitUrl("ssh://git@github.com/org/repo", None, None),
         ),
-        ("git+ssh://foo:22/some/path", GitUrl("ssh://foo:22/some/path", None)),
-        ("git@github.com:org/repo", GitUrl("git@github.com:org/repo", None)),
+        ("git+ssh://foo:22/some/path", GitUrl("ssh://foo:22/some/path", None, None)),
+        ("git@github.com:org/repo", GitUrl("git@github.com:org/repo", None, None)),
         (
             "git+https://github.com/sdispater/pendulum",
-            GitUrl("https://github.com/sdispater/pendulum", None),
+            GitUrl("https://github.com/sdispater/pendulum", None, None),
         ),
         (
             "git+https://github.com/sdispater/pendulum#7a018f2d075b03a73409e8356f9b29c9ad4ea2c5",
             GitUrl(
                 "https://github.com/sdispater/pendulum",
                 "7a018f2d075b03a73409e8356f9b29c9ad4ea2c5",
+                None,
             ),
         ),
         (
             "git+ssh://git@git.example.com:b/b.git#v1.0.0",
-            GitUrl("git@git.example.com:b/b.git", "v1.0.0"),
+            GitUrl("git@git.example.com:b/b.git", "v1.0.0", None),
         ),
         (
             "git+ssh://git@github.com:sdispater/pendulum.git#foo/bar",
-            GitUrl("git@github.com:sdispater/pendulum.git", "foo/bar"),
+            GitUrl("git@github.com:sdispater/pendulum.git", "foo/bar", None),
         ),
-        ("git+file:///foo/bar.git", GitUrl("file:///foo/bar.git", None)),
+        ("git+file:///foo/bar.git", GitUrl("file:///foo/bar.git", None, None)),
         (
             "git+file://C:\\Users\\hello\\testing.git#zkat/windows-files",
-            GitUrl("file://C:\\Users\\hello\\testing.git", "zkat/windows-files"),
+            GitUrl("file://C:\\Users\\hello\\testing.git", "zkat/windows-files", None),
         ),
         (
             "git+https://git.example.com/sdispater/project/my_repo.git",
-            GitUrl("https://git.example.com/sdispater/project/my_repo.git", None),
+            GitUrl("https://git.example.com/sdispater/project/my_repo.git", None, None),
         ),
         (
             "git+ssh://git@git.example.com:sdispater/project/my_repo.git",
-            GitUrl("git@git.example.com:sdispater/project/my_repo.git", None),
+            GitUrl("git@git.example.com:sdispater/project/my_repo.git", None, None),
+        ),
+        (
+            "git+https://git.example.com/sdispater/project/my_repo.git?subdirectory=path/to/package",
+            GitUrl(
+                "https://git.example.com/sdispater/project/my_repo.git",
+                None,
+                "path/to/package",
+            ),
+        ),
+        (
+            "git+ssh://git@git.example.com:sdispater/project/my_repo.git?subdirectory=path/to/package",
+            GitUrl(
+                "git@git.example.com:sdispater/project/my_repo.git",
+                None,
+                "path/to/package",
+            ),
+        ),
+        (
+            "git+https://git.example.com/sdispater/project/my_repo.git#dev?subdirectory=path/to/package",
+            GitUrl(
+                "https://git.example.com/sdispater/project/my_repo.git",
+                "dev",
+                "path/to/package",
+            ),
+        ),
+        (
+            "git+ssh://git@git.example.com:sdispater/project/my_repo.git#dev?subdirectory=path/to/package",
+            GitUrl(
+                "git@git.example.com:sdispater/project/my_repo.git",
+                "dev",
+                "path/to/package",
+            ),
         ),
     ],
 )
@@ -87,19 +123,40 @@ def test_normalize_url(url, normalized):
         (
             "git+ssh://user@hostname:project.git#commit",
             ParsedUrl(
-                "ssh", "hostname", ":project.git", "user", None, "project", "commit"
+                "ssh",
+                "hostname",
+                ":project.git",
+                "user",
+                None,
+                "project",
+                "commit",
+                None,
             ),
         ),
         (
             "git+http://user@hostname/project/blah.git@commit",
             ParsedUrl(
-                "http", "hostname", "/project/blah.git", "user", None, "blah", "commit"
+                "http",
+                "hostname",
+                "/project/blah.git",
+                "user",
+                None,
+                "blah",
+                "commit",
+                None,
             ),
         ),
         (
             "git+https://user@hostname/project/blah.git",
             ParsedUrl(
-                "https", "hostname", "/project/blah.git", "user", None, "blah", None
+                "https",
+                "hostname",
+                "/project/blah.git",
+                "user",
+                None,
+                "blah",
+                None,
+                None,
             ),
         ),
         (
@@ -112,12 +169,20 @@ def test_normalize_url(url, normalized):
                 None,
                 "blah~_-.bar",
                 None,
+                None,
             ),
         ),
         (
             "git+https://user@hostname:project/blah.git",
             ParsedUrl(
-                "https", "hostname", ":project/blah.git", "user", None, "blah", None
+                "https",
+                "hostname",
+                ":project/blah.git",
+                "user",
+                None,
+                "blah",
+                None,
+                None,
             ),
         ),
         (
@@ -130,6 +195,7 @@ def test_normalize_url(url, normalized):
                 None,
                 "poetry",
                 "v1.0.27",
+                None,
             ),
         ),
         (
@@ -142,23 +208,28 @@ def test_normalize_url(url, normalized):
                 None,
                 "poetry",
                 None,
+                None,
             ),
         ),
         (
             "git+ssh://git@github.com:org/repo",
-            ParsedUrl("ssh", "github.com", ":org/repo", "git", None, "repo", None),
+            ParsedUrl(
+                "ssh", "github.com", ":org/repo", "git", None, "repo", None, None
+            ),
         ),
         (
             "git+ssh://git@github.com/org/repo",
-            ParsedUrl("ssh", "github.com", "/org/repo", "git", None, "repo", None),
+            ParsedUrl(
+                "ssh", "github.com", "/org/repo", "git", None, "repo", None, None
+            ),
         ),
         (
             "git+ssh://foo:22/some/path",
-            ParsedUrl("ssh", "foo", "/some/path", None, "22", "path", None),
+            ParsedUrl("ssh", "foo", "/some/path", None, "22", "path", None, None),
         ),
         (
             "git@github.com:org/repo",
-            ParsedUrl(None, "github.com", ":org/repo", "git", None, "repo", None),
+            ParsedUrl(None, "github.com", ":org/repo", "git", None, "repo", None, None),
         ),
         (
             "git+https://github.com/sdispater/pendulum",
@@ -170,6 +241,7 @@ def test_normalize_url(url, normalized):
                 None,
                 "pendulum",
                 None,
+                None,
             ),
         ),
         (
@@ -182,11 +254,14 @@ def test_normalize_url(url, normalized):
                 None,
                 "pendulum",
                 "7a018f2d075b03a73409e8356f9b29c9ad4ea2c5",
+                None,
             ),
         ),
         (
             "git+ssh://git@git.example.com:b/b.git#v1.0.0",
-            ParsedUrl("ssh", "git.example.com", ":b/b.git", "git", None, "b", "v1.0.0"),
+            ParsedUrl(
+                "ssh", "git.example.com", ":b/b.git", "git", None, "b", "v1.0.0", None
+            ),
         ),
         (
             "git+ssh://git@github.com:sdispater/pendulum.git#foo/bar",
@@ -198,11 +273,12 @@ def test_normalize_url(url, normalized):
                 None,
                 "pendulum",
                 "foo/bar",
+                None,
             ),
         ),
         (
             "git+file:///foo/bar.git",
-            ParsedUrl("file", None, "/foo/bar.git", None, None, "bar", None),
+            ParsedUrl("file", None, "/foo/bar.git", None, None, "bar", None, None),
         ),
         (
             "git+file://C:\\Users\\hello\\testing.git#zkat/windows-files",
@@ -214,6 +290,7 @@ def test_normalize_url(url, normalized):
                 None,
                 "testing",
                 "zkat/windows-files",
+                None,
             ),
         ),
         (
@@ -226,6 +303,7 @@ def test_normalize_url(url, normalized):
                 None,
                 "my_repo",
                 None,
+                None,
             ),
         ),
         (
@@ -238,6 +316,59 @@ def test_normalize_url(url, normalized):
                 None,
                 "my_repo",
                 None,
+                None,
+            ),
+        ),
+        (
+            "git+https://git.example.com/sdispater/project/my_repo.git?subdirectory=path/to/package",
+            ParsedUrl(
+                "https",
+                "git.example.com",
+                "/sdispater/project/my_repo.git",
+                None,
+                None,
+                "my_repo",
+                None,
+                "path/to/package",
+            ),
+        ),
+        (
+            "git+ssh://git@git.example.com:sdispater/project/my_repo.git?subdirectory=path/to/package",
+            ParsedUrl(
+                "ssh",
+                "git.example.com",
+                ":sdispater/project/my_repo.git",
+                "git",
+                None,
+                "my_repo",
+                None,
+                "path/to/package",
+            ),
+        ),
+        (
+            "git+https://git.example.com/sdispater/project/my_repo.git#dev?subdirectory=path/to/package",
+            ParsedUrl(
+                "https",
+                "git.example.com",
+                "/sdispater/project/my_repo.git",
+                None,
+                None,
+                "my_repo",
+                "dev",
+                "path/to/package",
+            ),
+        ),
+        (
+            "git+ssh://git@git.example.com:sdispater/project/my_repo.git#dev?subdirectory=path/to/package",
+            ParsedUrl(
+                "ssh",
+                "git.example.com",
+                ":sdispater/project/my_repo.git",
+                "git",
+                None,
+                "my_repo",
+                "dev",
+                "path/to/package",
             ),
         ),
     ],
@@ -252,6 +383,7 @@ def test_parse_url(url, parsed):
     assert parsed.rev == result.rev
     assert parsed.url == result.url
     assert parsed.user == result.user
+    assert parsed.subdirectory == result.subdirectory
 
 
 def test_parse_url_should_fail():