diff --git a/mesonbuild/backend/backends.py b/mesonbuild/backend/backends.py
index a4be50f664b1..fc705a04dcd7 100644
--- a/mesonbuild/backend/backends.py
+++ b/mesonbuild/backend/backends.py
@@ -333,9 +333,9 @@ def get_source_dir_include_args(self, target: build.BuildTarget, compiler: 'Comp
 
     def get_build_dir_include_args(self, target: build.BuildTarget, compiler: 'Compiler', *, absolute_path: bool = False) -> T.List[str]:
         if absolute_path:
-            curdir = os.path.join(self.build_dir, target.get_subdir())
+            curdir = os.path.join(self.build_dir, target.get_builddir())
         else:
-            curdir = target.get_subdir()
+            curdir = target.get_builddir()
             if curdir == '':
                 curdir = '.'
         return compiler.get_include_args(curdir, False)
@@ -370,9 +370,12 @@ def get_target_dir(self, target: T.Union[build.Target, build.CustomTargetIndex])
             # this produces no output, only a dummy top-level name
             dirname = ''
         elif self.environment.coredata.get_option(OptionKey('layout')) == 'mirror':
-            dirname = target.get_subdir()
+            dirname = target.get_builddir()
         else:
             dirname = 'meson-out'
+            build_subdir = target.get_build_subdir()
+            if build_subdir:
+                dirname = os.path.join(dirname, build_subdir)
         return dirname
 
     def get_target_dir_relative_to(self, t: build.Target, o: build.Target) -> str:
@@ -482,7 +485,7 @@ def _flatten_object_list(self, target: build.BuildTarget,
         for obj in objects:
             if isinstance(obj, str):
                 o = os.path.join(proj_dir_to_build_root,
-                                 self.build_to_src, target.get_subdir(), obj)
+                                 self.build_to_src, target.get_builddir(), obj)
                 obj_list.append(o)
             elif isinstance(obj, mesonlib.File):
                 if obj.is_built:
@@ -1276,7 +1279,7 @@ def create_test_serialisation(self, tests: T.List['Test']) -> T.List[TestSeriali
                                 ld_lib_path_libs.add(l)
 
                 env_build_dir = self.environment.get_build_dir()
-                ld_lib_path: T.Set[str] = set(os.path.join(env_build_dir, l.get_subdir()) for l in ld_lib_path_libs)
+                ld_lib_path: T.Set[str] = set(os.path.join(env_build_dir, l.get_builddir()) for l in ld_lib_path_libs)
 
                 if ld_lib_path:
                     t_env.prepend('LD_LIBRARY_PATH', list(ld_lib_path), ':')
diff --git a/mesonbuild/build.py b/mesonbuild/build.py
index 35f1f24a42f8..14a663ce66fb 100644
--- a/mesonbuild/build.py
+++ b/mesonbuild/build.py
@@ -78,6 +78,7 @@ class DFeatures(TypedDict):
 buildtarget_kwargs = {
     'build_by_default',
     'build_rpath',
+    'build_subdir',
     'dependencies',
     'extra_files',
     'gui_app',
@@ -525,6 +526,7 @@ class Target(HoldableObject, metaclass=abc.ABCMeta):
     build_always_stale: bool = False
     extra_files: T.List[File] = field(default_factory=list)
     override_options: InitVar[T.Optional[T.Dict[OptionKey, str]]] = None
+    build_subdir: str = ''
 
     @abc.abstractproperty
     def typename(self) -> str:
@@ -548,6 +550,9 @@ def __post_init__(self, overrides: T.Optional[T.Dict[OptionKey, str]]) -> None:
                 Target "{self.name}" has a path separator in its name.
                 This is not supported, it can cause unexpected failures and will become
                 a hard error in the future.'''))
+        self.builddir = self.subdir
+        if self.build_subdir:
+            self.builddir = os.path.join(self.subdir, self.build_subdir)
 
     # dataclass comparators?
     def __lt__(self, other: object) -> bool:
@@ -608,6 +613,12 @@ def get_subdir(self) -> str:
     def get_typename(self) -> str:
         return self.typename
 
+    def get_build_subdir(self) -> str:
+        return self.build_subdir
+
+    def get_builddir(self) -> str:
+        return self.builddir
+
     @staticmethod
     def _get_id_hash(target_id: str) -> str:
         # We don't really need cryptographic security here.
@@ -642,7 +653,7 @@ def get_id(self) -> str:
         if getattr(self, 'name_suffix_set', False):
             name += '.' + self.suffix
         return self.construct_id_from_path(
-            self.subdir, name, self.type_suffix())
+            self.builddir, name, self.type_suffix())
 
     def process_kwargs_base(self, kwargs: T.Dict[str, T.Any]) -> None:
         if 'build_by_default' in kwargs:
@@ -738,7 +749,7 @@ def __init__(
             environment: environment.Environment,
             compilers: T.Dict[str, 'Compiler'],
             kwargs: T.Dict[str, T.Any]):
-        super().__init__(name, subdir, subproject, True, for_machine, environment, install=kwargs.get('install', False))
+        super().__init__(name, subdir, subproject, True, for_machine, environment, install=kwargs.get('install', False), build_subdir=kwargs.get('build_subdir', ''))
         self.all_compilers = compilers
         self.compilers: OrderedDict[str, Compiler] = OrderedDict()
         self.objects: T.List[ObjectTypes] = []
@@ -2647,10 +2658,11 @@ def __init__(self,
                  absolute_paths: bool = False,
                  backend: T.Optional['Backend'] = None,
                  description: str = 'Generating {} with a custom command',
+                 build_subdir: str = '',
                  ):
         # TODO expose keyword arg to make MachineChoice.HOST configurable
         super().__init__(name, subdir, subproject, False, MachineChoice.HOST, environment,
-                         install, build_always_stale)
+                         install, build_always_stale, build_subdir = build_subdir)
         self.sources = list(sources)
         self.outputs = substitute_values(
             outputs, get_filenames_templates_dict(
@@ -3027,6 +3039,12 @@ def get_outputs(self) -> T.List[str]:
     def get_subdir(self) -> str:
         return self.target.get_subdir()
 
+    def get_build_subdir(self) -> str:
+        return self.target.get_build_subdir()
+
+    def get_builddir(self) -> str:
+        return self.target.get_builddir()
+
     def get_filename(self) -> str:
         return self.output
 
diff --git a/mesonbuild/interpreter/interpreter.py b/mesonbuild/interpreter/interpreter.py
index d717485e8a1e..387c3f4c6763 100644
--- a/mesonbuild/interpreter/interpreter.py
+++ b/mesonbuild/interpreter/interpreter.py
@@ -2055,6 +2055,7 @@ def _validate_custom_target_outputs(self, has_multi_in: bool, outputs: T.Iterabl
         KwargInfo('feed', bool, default=False, since='0.59.0'),
         KwargInfo('capture', bool, default=False),
         KwargInfo('console', bool, default=False, since='0.48.0'),
+        KwargInfo('build_subdir', str, default='', since='1.7.0'),
     )
     def func_custom_target(self, node: mparser.FunctionNode, args: T.Tuple[str],
                            kwargs: 'kwtypes.CustomTarget') -> build.CustomTarget:
@@ -2145,7 +2146,8 @@ def func_custom_target(self, node: mparser.FunctionNode, args: T.Tuple[str],
             install_dir=kwargs['install_dir'],
             install_mode=install_mode,
             install_tag=kwargs['install_tag'],
-            backend=self.backend)
+            backend=self.backend,
+            build_subdir=kwargs['build_subdir'])
         self.add_target(tg.name, tg)
         return tg
 
@@ -2643,6 +2645,7 @@ def func_install_subdir(self, node: mparser.BaseNode, args: T.Tuple[str],
         KwargInfo('output_format', str, default='c', since='0.47.0', since_values={'json': '1.3.0'},
                   validator=in_set_validator({'c', 'json', 'nasm'})),
         KwargInfo('macro_name', (str, NoneType), default=None, since='1.3.0'),
+        KwargInfo('build_subdir', str, default='', since='1.7.0'),
     )
     def func_configure_file(self, node: mparser.BaseNode, args: T.List[TYPE_var],
                             kwargs: kwtypes.ConfigureFile):
@@ -2670,6 +2673,7 @@ def func_configure_file(self, node: mparser.BaseNode, args: T.List[TYPE_var],
         fmt = kwargs['format']
         output_format = kwargs['output_format']
         depfile = kwargs['depfile']
+        self.build_subdir = kwargs['build_subdir']
 
         # Validate input
         inputs = self.source_strings_to_files(kwargs['input'])
@@ -2698,8 +2702,9 @@ def func_configure_file(self, node: mparser.BaseNode, args: T.List[TYPE_var],
             mlog.warning('Output file', mlog.bold(ofile_rpath, True), 'for configure_file() at', current_call, 'overwrites configure_file() output at', first_call)
         else:
             self.configure_file_outputs[ofile_rpath] = self.current_node.lineno
-        (ofile_path, ofile_fname) = os.path.split(os.path.join(self.subdir, output))
+        (ofile_path, ofile_fname) = os.path.split(os.path.join(self.subdir, self.build_subdir, output))
         ofile_abs = os.path.join(self.environment.build_dir, ofile_path, ofile_fname)
+        os.makedirs(os.path.split(ofile_abs)[0], exist_ok=True)
 
         # Perform the appropriate action
         if kwargs['configuration'] is not None:
@@ -2715,7 +2720,6 @@ def func_configure_file(self, node: mparser.BaseNode, args: T.List[TYPE_var],
             if len(inputs) > 1:
                 raise InterpreterException('At most one input file can given in configuration mode')
             if inputs:
-                os.makedirs(os.path.join(self.environment.build_dir, self.subdir), exist_ok=True)
                 file_encoding = kwargs['encoding']
                 missing_variables, confdata_useless = \
                     mesonlib.do_conf_file(inputs_abs[0], ofile_abs, conf,
diff --git a/mesonbuild/interpreter/type_checking.py b/mesonbuild/interpreter/type_checking.py
index ed34be950065..0911ce3831bc 100644
--- a/mesonbuild/interpreter/type_checking.py
+++ b/mesonbuild/interpreter/type_checking.py
@@ -584,6 +584,7 @@ def _objects_validator(vals: T.List[ObjectTypes]) -> T.Optional[str]:
                 ('1.1.0', 'generated sources as positional "objects" arguments')
         },
     ),
+    KwargInfo('build_subdir', str, default='', since='1.7.0')
 ]
 
 
diff --git a/test cases/common/109 custom target capture/meson.build b/test cases/common/109 custom target capture/meson.build
index b7622014a99d..9fd7e22aec1a 100644
--- a/test cases/common/109 custom target capture/meson.build	
+++ b/test cases/common/109 custom target capture/meson.build	
@@ -22,3 +22,13 @@ if not os.path.exists(sys.argv[1]):
 '''
 
 test('capture-wrote', python3, args : ['-c', ct_output_exists, mytarget])
+
+mytarget = custom_target('bindat',
+  output : 'data.dat',
+  input : 'data_source.txt',
+  build_subdir : 'subdir2',
+  capture : true,
+  command : [python3, comp, '@INPUT@'],
+  install : true,
+  install_dir : 'subdir2'
+)
diff --git a/test cases/common/109 custom target capture/test.json b/test cases/common/109 custom target capture/test.json
index ba66b024aaa9..663a8f3201fc 100644
--- a/test cases/common/109 custom target capture/test.json	
+++ b/test cases/common/109 custom target capture/test.json	
@@ -1,5 +1,6 @@
 {
   "installed": [
-    {"type": "file", "file": "usr/subdir/data.dat"}
+    {"type": "file", "file": "usr/subdir/data.dat"},
+    {"type": "file", "file": "usr/subdir2/data.dat"}
   ]
 }
diff --git a/test cases/common/117 shared module/meson.build b/test cases/common/117 shared module/meson.build
index 94d17a716da9..494ce42ee04c 100644
--- a/test cases/common/117 shared module/meson.build	
+++ b/test cases/common/117 shared module/meson.build	
@@ -34,6 +34,14 @@ test('import test', e, args : m)
 m2 = build_target('mymodule2', 'module.c', target_type: 'shared_module')
 test('import test 2', e, args : m2)
 
+# Same as above, but built and installed in a sub directory
+m2_subdir = build_target('mymodule2', 'module.c',
+                         target_type: 'shared_module',
+                         build_subdir: 'subdir',
+                         install: true,
+                         install_dir: join_paths(get_option('libdir'), 'modules/subdir'))
+test('import test 2 subdir', e, args : m2_subdir)
+
 # Shared module that does not export any symbols
 shared_module('nosyms', 'nosyms.c',
   override_options: ['werror=false'],
diff --git a/test cases/common/117 shared module/test.json b/test cases/common/117 shared module/test.json
index 33bfeff07600..b24149cf3df7 100644
--- a/test cases/common/117 shared module/test.json	
+++ b/test cases/common/117 shared module/test.json	
@@ -2,6 +2,9 @@
   "installed": [
     {"type": "expr", "file": "usr/lib/modules/libnosyms?so"},
     {"type": "implibempty", "file": "usr/lib/modules/libnosyms"},
-    {"type": "pdb", "file": "usr/lib/modules/nosyms"}
+    {"type": "pdb", "file": "usr/lib/modules/nosyms"},
+    {"type": "expr", "file": "usr/lib/modules/subdir/libmymodule2?so"},
+    {"type": "implib", "file": "usr/lib/modules/subdir/libmymodule2"},
+    {"type": "pdb", "file": "usr/lib/modules/subdir/mymodule2"}
   ]
 }
diff --git a/test cases/common/14 configure file/meson.build b/test cases/common/14 configure file/meson.build
index 036a562b796c..5a918b084abf 100644
--- a/test cases/common/14 configure file/meson.build	
+++ b/test cases/common/14 configure file/meson.build	
@@ -30,6 +30,13 @@ configure_file(input : files('config.h.in'),
   output : 'config2.h',
   configuration : conf)
 
+# Test if build_subdir works
+configure_file(input : files('config.h.in'),
+  output : 'config2.h',
+  build_subdir : 'subdir',
+  install_dir : 'share/appdir/subdir',
+  configuration : conf)
+
 # Now generate a header file with an external script.
 genprog = import('python3').find_python()
 scriptfile = '@0@/generator.py'.format(meson.current_source_dir())
diff --git a/test cases/common/14 configure file/test.json b/test cases/common/14 configure file/test.json
index 5a6ccd57a8fb..45565b9c5176 100644
--- a/test cases/common/14 configure file/test.json	
+++ b/test cases/common/14 configure file/test.json	
@@ -4,6 +4,7 @@
     {"type": "file", "file": "usr/share/appdir/config2b.h"},
     {"type": "file", "file": "usr/share/appdireh/config2-1.h"},
     {"type": "file", "file": "usr/share/appdirok/config2-2.h"},
-    {"type": "file", "file": "usr/share/configure file test/invalid-utf8-1.bin"}
+    {"type": "file", "file": "usr/share/configure file test/invalid-utf8-1.bin"},
+    {"type": "file", "file": "usr/share/appdir/subdir/config2.h"}
   ]
 }