diff --git a/src/main/java/com/google/devtools/build/lib/remote/merkletree/DirectoryTreeBuilder.java b/src/main/java/com/google/devtools/build/lib/remote/merkletree/DirectoryTreeBuilder.java
index 2522bd3fb90d50..1ddcf963520079 100644
--- a/src/main/java/com/google/devtools/build/lib/remote/merkletree/DirectoryTreeBuilder.java
+++ b/src/main/java/com/google/devtools/build/lib/remote/merkletree/DirectoryTreeBuilder.java
@@ -146,7 +146,7 @@ private static int buildFromActionInputs(
 
             case DIRECTORY:
               SortedMap<PathFragment, ActionInput> directoryInputs =
-                  explodeDirectory(path, execRoot);
+                  explodeDirectory(input.getExecPath(), execRoot);
               return buildFromActionInputs(
                   directoryInputs, metadataProvider, execRoot, digestUtil, tree);
 
diff --git a/src/test/shell/bazel/disk_cache_test.sh b/src/test/shell/bazel/disk_cache_test.sh
index 303134057ad74c..05c6546ebe5f73 100755
--- a/src/test/shell/bazel/disk_cache_test.sh
+++ b/src/test/shell/bazel/disk_cache_test.sh
@@ -66,4 +66,29 @@ EOF
   assert_equals "0" $(cat "${execution_file}")
 }
 
+function test_input_directories_in_external_repo_with_sibling_repository_layout() {
+  create_new_workspace
+  l=$TEST_TMPDIR/l
+  mkdir -p "$l/dir"
+  touch "$l/WORKSPACE"
+  touch "$l/dir/f"
+  cat > "$l/BUILD" <<'EOF'
+exports_files(["dir"])
+EOF
+
+  cat >> WORKSPACE <<EOF
+local_repository(name="l", path="$l")
+EOF
+
+  cat > BUILD <<'EOF'
+genrule(name="g", srcs=["@l//:dir"], outs=["go"], cmd="find $< > $@")
+EOF
+
+  bazel build \
+    --experimental_sibling_repository_layout  \
+    --disk_cache="$TEST_TMPDIR/cache" \
+    //:g || fail "build failed"
+
+}
+
 run_suite "local action cache test"