diff --git a/plugin-gradle/CHANGES.md b/plugin-gradle/CHANGES.md
index 9a745003a4..614aafb162 100644
--- a/plugin-gradle/CHANGES.md
+++ b/plugin-gradle/CHANGES.md
@@ -3,6 +3,7 @@
 ### Version 3.5.0-SNAPSHOT - TBD ([javadoc](https://diffplug.github.io/spotless/javadoc/snapshot/), [snapshot](https://oss.sonatype.org/content/repositories/snapshots/com/diffplug/spotless/spotless-plugin-gradle/))
 
 * Default eclipse version for `EclipseFormatterStep` bumped to `4.6.3` from `4.6.1`. ([#116](https://github.com/diffplug/spotless/issues/116))
+* Fixed wildcard targets for `includeFlat` subprojects ([#121](https://github.com/diffplug/spotless/issues/121))
 
 ### Version 3.4.0 - May 21st 2017 ([javadoc](https://diffplug.github.io/spotless/javadoc/spotless-plugin-gradle/3.4.0/), [jcenter](https://bintray.com/diffplug/opensource/spotless-plugin-gradle/3.4.0))
 
diff --git a/plugin-gradle/src/main/java/com/diffplug/gradle/spotless/FormatExtension.java b/plugin-gradle/src/main/java/com/diffplug/gradle/spotless/FormatExtension.java
index a45f368de7..398a09de1b 100644
--- a/plugin-gradle/src/main/java/com/diffplug/gradle/spotless/FormatExtension.java
+++ b/plugin-gradle/src/main/java/com/diffplug/gradle/spotless/FormatExtension.java
@@ -169,10 +169,10 @@ protected FileCollection parseTarget(Object target) {
 			if (getProject() == getProject().getRootProject()) {
 				excludes.add(".gradle");
 			}
-			// no build folders
-			excludes.add(relativize(dir, getProject().getBuildDir()));
+			// no build folders (flatInclude means that subproject might not be subfolders, see https://github.com/diffplug/spotless/issues/121)
+			relativizeIfSubdir(excludes, dir, getProject().getBuildDir());
 			for (Project subproject : getProject().getSubprojects()) {
-				excludes.add(relativize(dir, subproject.getBuildDir()));
+				relativizeIfSubdir(excludes, dir, subproject.getBuildDir());
 			}
 			if (target instanceof String) {
 				return (FileCollection) getProject().fileTree(dir).include((String) target).exclude(excludes);
@@ -185,11 +185,22 @@ protected FileCollection parseTarget(Object target) {
 		}
 	}
 
-	static String relativize(File root, File dest) {
+	private static void relativizeIfSubdir(List<String> relativePaths, File root, File dest) {
+		String relativized = relativize(root, dest);
+		if (relativized != null) {
+			relativePaths.add(relativized);
+		}
+	}
+
+	/**
+	 * Returns the relative path between root and dest,
+	 * or null if dest is not a child of root.
+	 */
+	static @Nullable String relativize(File root, File dest) {
 		String rootPath = root.getAbsolutePath();
 		String destPath = dest.getAbsolutePath();
 		if (!destPath.startsWith(rootPath)) {
-			throw new IllegalArgumentException(dest + " is not a child of " + root);
+			return null;
 		} else {
 			return destPath.substring(rootPath.length());
 		}