diff --git a/e2e/schematics/application.test.ts b/e2e/schematics/application.test.ts
index 1cc6de6a77c1c..4d331bd8f2846 100644
--- a/e2e/schematics/application.test.ts
+++ b/e2e/schematics/application.test.ts
@@ -5,19 +5,19 @@ describe('Nrwl Workspace', () => {
     'should work',
     () => {
       newProject();
-      newApp('myapp');
-      newLib('mylib --ngmodule');
+      newApp('myApp --directory=myDir');
+      newLib('myLib --directory=myDir --ngmodule');
 
       updateFile(
-        'apps/myapp/src/app/app.module.ts',
+        'apps/my-dir/my-app/src/app/app.module.ts',
         `
         import { NgModule } from '@angular/core';
         import { BrowserModule } from '@angular/platform-browser';
-        import { MylibModule } from '@nrwl/mylib';
+        import { MyLibModule } from '@nrwl/my-dir/my-lib';
         import { AppComponent } from './app.component';
 
         @NgModule({
-          imports: [BrowserModule, MylibModule],
+          imports: [BrowserModule, MyLibModule],
           declarations: [AppComponent],
           bootstrap: [AppComponent]
         })
@@ -35,8 +35,8 @@ describe('Nrwl Workspace', () => {
     'should support router config generation (lazy)',
     () => {
       newProject();
-      newApp('myapp --routing');
-      newLib('mylib --routing --lazy --parentModule=apps/myapp/src/app/app.module.ts');
+      newApp('myApp --directory=myDir --routing');
+      newLib('myLib --directory=myDir --routing --lazy --parentModule=apps/my-dir/my-app/src/app/app.module.ts');
 
       runCLI('build --aot');
       expect(runCLI('test --single-run')).toContain('Executed 2 of 2 SUCCESS');
@@ -48,8 +48,8 @@ describe('Nrwl Workspace', () => {
     'should support router config generation (eager)',
     () => {
       newProject();
-      newApp('myapp --routing');
-      newLib('mylib --routing --parentModule=apps/myapp/src/app/app.module.ts');
+      newApp('myApp --directory=myDir --routing');
+      newLib('myLib --directory=myDir --routing --parentModule=apps/my-dir/my-app/src/app/app.module.ts');
 
       runCLI('build --aot');
       expect(runCLI('test --single-run')).toContain('Executed 2 of 2 SUCCESS');
diff --git a/e2e/schematics/tslint.test.ts b/e2e/schematics/tslint.test.ts
index 85a27d926efca..34fdd2fbbf246 100644
--- a/e2e/schematics/tslint.test.ts
+++ b/e2e/schematics/tslint.test.ts
@@ -18,12 +18,14 @@ describe('Lint', () => {
         `
       import '../../../libs/mylib';
       import '@nrwl/lazylib';
+      import '@nrwl/mylib/deep';
     `
       );
 
       const out = runCLI('lint --type-check', { silenceError: true });
       expect(out).toContain('relative imports of libraries are forbidden');
       expect(out).toContain('import of lazy-loaded libraries are forbidden');
+      expect(out).toContain('deep imports into libraries are forbidden');
     },
     1000000
   );
diff --git a/packages/schematics/migrations/20171202-change-schema.ts b/packages/schematics/migrations/20171202-change-schema.ts
index 25bb9ac4df2c3..3ae1d395c3f9d 100644
--- a/packages/schematics/migrations/20171202-change-schema.ts
+++ b/packages/schematics/migrations/20171202-change-schema.ts
@@ -9,8 +9,8 @@ export default {
       const rule = ruleName in json.rules ? json.rules[ruleName] : null;
 
       // Only modify when the rule is configured with optional arguments
-      if (Array.isArray(rule) && typeof rule[2] === 'object' && rule[2] !== null) {
-        rule[2][ruleOptionName] = [];
+      if (Array.isArray(rule) && typeof rule[1] === 'object' && rule[1] !== null) {
+        rule[1][ruleOptionName] = [];
       }
     });
   }
diff --git a/packages/schematics/migrations/20171205-remove-npmscope-from-tslintjson.ts b/packages/schematics/migrations/20171205-remove-npmscope-from-tslintjson.ts
new file mode 100644
index 0000000000000..9e472d94abbcd
--- /dev/null
+++ b/packages/schematics/migrations/20171205-remove-npmscope-from-tslintjson.ts
@@ -0,0 +1,16 @@
+import { updateJsonFile } from '../src/collection/utility/fileutils';
+
+export default {
+  description: 'Remove npmScope from tslint.json',
+  run: () => {
+    updateJsonFile('tslint.json', json => {
+      const ruleName = 'nx-enforce-module-boundaries';
+      const rule = ruleName in json.rules ? json.rules[ruleName] : null;
+
+      // Only modify when the rule is configured with optional arguments
+      if (Array.isArray(rule) && typeof rule[1] === 'object' && rule[1] !== null) {
+        rule[1].npmScope = undefined;
+      }
+    });
+  }
+};
diff --git a/packages/schematics/src/collection/app/app.spec.ts b/packages/schematics/src/collection/app/app.spec.ts
index c20f2327d343a..f00231ba929b7 100644
--- a/packages/schematics/src/collection/app/app.spec.ts
+++ b/packages/schematics/src/collection/app/app.spec.ts
@@ -14,49 +14,86 @@ describe('app', () => {
     appTree = createEmptyWorkspace(appTree);
   });
 
-  it('should update angular-cli.json', () => {
-    const tree = schematicRunner.runSchematic('app', { name: 'myApp' }, appTree);
-    const updatedAngularCLIJson = JSON.parse(getFileContent(tree, '/.angular-cli.json'));
-    expect(updatedAngularCLIJson.apps).toEqual([
-      {
-        assets: ['assets', 'favicon.ico'],
-        environmentSource: 'environments/environment.ts',
-        environments: { dev: 'environments/environment.ts', prod: 'environments/environment.prod.ts' },
-        index: 'index.html',
-        main: 'main.ts',
-        name: 'my-app',
-        outDir: 'dist/apps/my-app',
-        polyfills: 'polyfills.ts',
-        prefix: 'app',
-        root: 'apps/my-app/src',
-        scripts: [],
-        styles: ['styles.css'],
-        test: '../../../test.js',
-        testTsconfig: '../../../tsconfig.spec.json',
-        tsconfig: '../../../tsconfig.app.json'
-      }
-    ]);
+  describe('not nested', () => {
+    it('should update angular-cli.json', () => {
+      const tree = schematicRunner.runSchematic('app', { name: 'myApp' }, appTree);
+      const updatedAngularCLIJson = JSON.parse(getFileContent(tree, '/.angular-cli.json'));
+      expect(updatedAngularCLIJson.apps).toEqual([
+        {
+          assets: ['assets', 'favicon.ico'],
+          environmentSource: 'environments/environment.ts',
+          environments: { dev: 'environments/environment.ts', prod: 'environments/environment.prod.ts' },
+          index: 'index.html',
+          main: 'main.ts',
+          name: 'my-app',
+          outDir: 'dist/apps/my-app',
+          polyfills: 'polyfills.ts',
+          prefix: 'app',
+          root: 'apps/my-app/src',
+          scripts: [],
+          styles: ['styles.css'],
+          test: '../../../test.js',
+          testTsconfig: '../../../tsconfig.spec.json',
+          tsconfig: '../../../tsconfig.app.json'
+        }
+      ]);
+    });
+
+    it('should generate files', () => {
+      const tree = schematicRunner.runSchematic('app', { name: 'myApp' }, appTree);
+      expect(tree.exists('apps/my-app/src/main.ts')).toBeTruthy();
+      expect(tree.exists('apps/my-app/src/app/app.module.ts')).toBeTruthy();
+      expect(tree.exists('apps/my-app/src/app/app.component.ts')).toBeTruthy();
+      expect(tree.exists('apps/my-app/e2e/app.po.ts')).toBeTruthy();
+      expect(getFileContent(tree, 'apps/my-app/src/app/app.module.ts')).toContain('class AppModule');
+    });
   });
 
-  it('should generate files', () => {
-    const tree = schematicRunner.runSchematic('app', { name: 'myApp' }, appTree);
-    expect(tree.exists('apps/my-app/src/main.ts')).toBeTruthy();
-    expect(tree.exists('apps/my-app/src/app/app.module.ts')).toBeTruthy();
-    expect(tree.exists('apps/my-app/src/app/app.component.ts')).toBeTruthy();
-    expect(tree.exists('apps/my-app/e2e/app.po.ts')).toBeTruthy();
-    expect(getFileContent(tree, 'apps/my-app/src/app/app.module.ts')).toContain('class AppModule');
+  describe('nested', () => {
+    it('should update angular-cli.json', () => {
+      const tree = schematicRunner.runSchematic('app', { name: 'myApp', directory: 'myDir' }, appTree);
+      const updatedAngularCLIJson = JSON.parse(getFileContent(tree, '/.angular-cli.json'));
+      expect(updatedAngularCLIJson.apps).toEqual([
+        {
+          assets: ['assets', 'favicon.ico'],
+          environmentSource: 'environments/environment.ts',
+          environments: { dev: 'environments/environment.ts', prod: 'environments/environment.prod.ts' },
+          index: 'index.html',
+          main: 'main.ts',
+          name: 'my-dir/my-app',
+          outDir: 'dist/apps/my-dir/my-app',
+          polyfills: 'polyfills.ts',
+          prefix: 'app',
+          root: 'apps/my-dir/my-app/src',
+          scripts: [],
+          styles: ['styles.css'],
+          test: '../../../../test.js',
+          testTsconfig: '../../../../tsconfig.spec.json',
+          tsconfig: '../../../../tsconfig.app.json'
+        }
+      ]);
+    });
+
+    it('should generate files', () => {
+      const tree = schematicRunner.runSchematic('app', { name: 'myApp', directory: 'myDir' }, appTree);
+      expect(tree.exists('apps/my-dir/my-app/src/main.ts')).toBeTruthy();
+      expect(tree.exists('apps/my-dir/my-app/src/app/app.module.ts')).toBeTruthy();
+      expect(tree.exists('apps/my-dir/my-app/src/app/app.component.ts')).toBeTruthy();
+      expect(tree.exists('apps/my-dir/my-app/e2e/app.po.ts')).toBeTruthy();
+      expect(getFileContent(tree, 'apps/my-dir/my-app/src/app/app.module.ts')).toContain('class AppModule');
+    });
   });
 
   it('should import NgModule', () => {
-    const tree = schematicRunner.runSchematic('app', { name: 'myApp' }, appTree);
-    expect(getFileContent(tree, 'apps/my-app/src/app/app.module.ts')).toContain('NxModule.forRoot()');
+    const tree = schematicRunner.runSchematic('app', { name: 'myApp', directory: 'myDir' }, appTree);
+    expect(getFileContent(tree, 'apps/my-dir/my-app/src/app/app.module.ts')).toContain('NxModule.forRoot()');
   });
 
   describe('routing', () => {
     it('should include RouterTestingModule', () => {
-      const tree = schematicRunner.runSchematic('app', { name: 'myApp', routing: true }, appTree);
-      expect(getFileContent(tree, 'apps/my-app/src/app/app.module.ts')).toContain('RouterModule.forRoot');
-      expect(getFileContent(tree, 'apps/my-app/src/app/app.component.spec.ts')).toContain(
+      const tree = schematicRunner.runSchematic('app', { name: 'myApp', directory: 'myDir', routing: true }, appTree);
+      expect(getFileContent(tree, 'apps/my-dir/my-app/src/app/app.module.ts')).toContain('RouterModule.forRoot');
+      expect(getFileContent(tree, 'apps/my-dir/my-app/src/app/app.component.spec.ts')).toContain(
         'imports: [RouterTestingModule]'
       );
     });
diff --git a/packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/assets/__dot__gitkeep b/packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/assets/__dot__gitkeep
similarity index 100%
rename from packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/assets/__dot__gitkeep
rename to packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/assets/__dot__gitkeep
diff --git a/packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/assets/nx-logo.png b/packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/assets/nx-logo.png
similarity index 100%
rename from packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/assets/nx-logo.png
rename to packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/assets/nx-logo.png
diff --git a/packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/environments/environment.prod.ts__tmpl__ b/packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/environments/environment.prod.ts__tmpl__
similarity index 100%
rename from packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/environments/environment.prod.ts__tmpl__
rename to packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/environments/environment.prod.ts__tmpl__
diff --git a/packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/environments/environment.ts__tmpl__ b/packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/environments/environment.ts__tmpl__
similarity index 100%
rename from packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/environments/environment.ts__tmpl__
rename to packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/environments/environment.ts__tmpl__
diff --git a/packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/favicon.ico b/packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/favicon.ico
similarity index 100%
rename from packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/favicon.ico
rename to packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/favicon.ico
diff --git a/packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/index.html__tmpl__ b/packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/index.html__tmpl__
similarity index 97%
rename from packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/index.html__tmpl__
rename to packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/index.html__tmpl__
index 63b8497cace2b..cd8a591155806 100644
--- a/packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/index.html__tmpl__
+++ b/packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/index.html__tmpl__
@@ -11,4 +11,4 @@
 <body>
   <<%= prefix %>-root></<%= prefix %>-root>
 </body>
-</html>
+</html>
\ No newline at end of file
diff --git a/packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/main.ts__tmpl__ b/packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/main.ts__tmpl__
similarity index 100%
rename from packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/main.ts__tmpl__
rename to packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/main.ts__tmpl__
diff --git a/packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/polyfills.ts__tmpl__ b/packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/polyfills.ts__tmpl__
similarity index 100%
rename from packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/polyfills.ts__tmpl__
rename to packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/polyfills.ts__tmpl__
diff --git a/packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/styles.__style__ b/packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/styles.__style__
similarity index 100%
rename from packages/schematics/src/collection/app/files/apps/__name__/__sourceDir__/styles.__style__
rename to packages/schematics/src/collection/app/files/apps/__fullName__/__sourceDir__/styles.__style__
diff --git a/packages/schematics/src/collection/app/files/apps/__name__/e2e/app.e2e-spec.ts__tmpl__ b/packages/schematics/src/collection/app/files/apps/__fullName__/e2e/app.e2e-spec.ts__tmpl__
similarity index 100%
rename from packages/schematics/src/collection/app/files/apps/__name__/e2e/app.e2e-spec.ts__tmpl__
rename to packages/schematics/src/collection/app/files/apps/__fullName__/e2e/app.e2e-spec.ts__tmpl__
diff --git a/packages/schematics/src/collection/app/files/apps/__name__/e2e/app.po.ts__tmpl__ b/packages/schematics/src/collection/app/files/apps/__fullName__/e2e/app.po.ts__tmpl__
similarity index 100%
rename from packages/schematics/src/collection/app/files/apps/__name__/e2e/app.po.ts__tmpl__
rename to packages/schematics/src/collection/app/files/apps/__fullName__/e2e/app.po.ts__tmpl__
diff --git a/packages/schematics/src/collection/app/index.ts b/packages/schematics/src/collection/app/index.ts
index c3dc09aa684f0..d4b382a908b19 100644
--- a/packages/schematics/src/collection/app/index.ts
+++ b/packages/schematics/src/collection/app/index.ts
@@ -21,6 +21,12 @@ import { addBootstrapToModule } from '@schematics/angular/utility/ast-utils';
 import { insertImport } from '@schematics/angular/utility/route-utils';
 import { addApp, serializeJson } from '../utility/fileutils';
 import { addImportToTestBed } from '../utility/ast-utils';
+import { offsetFromRoot } from '../utility/common';
+
+interface NormalizedSchema extends Schema {
+  fullName: string;
+  fullPath: string;
+}
 
 function addBootstrap(path: string): Rule {
   return (host: Tree) => {
@@ -48,7 +54,7 @@ function addNxModule(path: string): Rule {
     return host;
   };
 }
-function addAppToAngularCliJson(options: Schema): Rule {
+function addAppToAngularCliJson(options: NormalizedSchema): Rule {
   return (host: Tree) => {
     if (!host.exists('.angular-cli.json')) {
       throw new Error('Missing .angular-cli.json');
@@ -57,16 +63,16 @@ function addAppToAngularCliJson(options: Schema): Rule {
     const sourceText = host.read('.angular-cli.json')!.toString('utf-8');
     const json = JSON.parse(sourceText);
     json.apps = addApp(json.apps, {
-      name: options.name,
-      root: fullPath(options),
-      outDir: `dist/apps/${options.name}`,
+      name: options.fullName,
+      root: options.fullPath,
+      outDir: `dist/apps/${options.fullName}`,
       assets: ['assets', 'favicon.ico'],
       index: 'index.html',
       main: 'main.ts',
       polyfills: 'polyfills.ts',
-      test: '../../../test.js',
-      tsconfig: '../../../tsconfig.app.json',
-      testTsconfig: '../../../tsconfig.spec.json',
+      test: `${offsetFromRoot(options)}test.js`,
+      tsconfig: `${offsetFromRoot(options)}tsconfig.app.json`,
+      testTsconfig: `${offsetFromRoot(options)}tsconfig.spec.json`,
       prefix: options.prefix,
       styles: [`styles.${options.style}`],
       scripts: [],
@@ -109,7 +115,8 @@ function addRouterRootConfiguration(path: string): Rule {
 }
 
 export default function(schema: Schema): Rule {
-  const options = { ...schema, name: toFileName(schema.name) };
+  const options = normalizeOptions(schema);
+
   const templateSource = apply(url('./files'), [
     template({ utils: stringUtils, dot: '.', tmpl: '', ...(options as object) })
   ]);
@@ -122,13 +129,13 @@ export default function(schema: Schema): Rule {
       commonModule: false,
       flat: true,
       routing: false,
-      sourceDir: fullPath(options),
+      sourceDir: options.fullPath,
       spec: false
     }),
     externalSchematic('@schematics/angular', 'component', {
       name: 'app',
       selector: selector,
-      sourceDir: fullPath(options),
+      sourceDir: options.fullPath,
       flat: true,
       inlineStyle: options.inlineStyle,
       inlineTemplate: options.inlineTemplate,
@@ -142,17 +149,20 @@ export default function(schema: Schema): Rule {
       apply(url('./component-files'), [
         options.inlineTemplate ? filter(path => !path.endsWith('.html')) : noop(),
         template({ ...options, tmpl: '' }),
-        move(`${fullPath(options)}/app`)
+        move(`${options.fullPath}/app`)
       ]),
       MergeStrategy.Overwrite
     ),
-    addBootstrap(fullPath(options)),
-    addNxModule(fullPath(options)),
+    addBootstrap(options.fullPath),
+    addNxModule(options.fullPath),
     addAppToAngularCliJson(options),
-    options.routing ? addRouterRootConfiguration(fullPath(options)) : noop()
+    options.routing ? addRouterRootConfiguration(options.fullPath) : noop()
   ]);
 }
 
-function fullPath(options: Schema) {
-  return `apps/${options.name}/${options.sourceDir}`;
+function normalizeOptions(options: Schema): NormalizedSchema {
+  const name = toFileName(options.name);
+  const fullName = options.directory ? `${toFileName(options.directory)}/${name}` : name;
+  const fullPath = `apps/${fullName}/${options.sourceDir}`;
+  return { ...options, name, fullName, fullPath };
 }
diff --git a/packages/schematics/src/collection/app/schema.d.ts b/packages/schematics/src/collection/app/schema.d.ts
index 8271c6333e9e9..64c3ef3f714a1 100644
--- a/packages/schematics/src/collection/app/schema.d.ts
+++ b/packages/schematics/src/collection/app/schema.d.ts
@@ -1,5 +1,6 @@
 export interface Schema {
   name: string;
+  directory?: string;
   sourceDir?: string;
   inlineStyle?: boolean;
   inlineTemplate?: boolean;
diff --git a/packages/schematics/src/collection/app/schema.json b/packages/schematics/src/collection/app/schema.json
index 899645a905453..bfbff040ce4f7 100644
--- a/packages/schematics/src/collection/app/schema.json
+++ b/packages/schematics/src/collection/app/schema.json
@@ -8,6 +8,10 @@
       "type": "string",
       "description": "Application name"
     },
+    "directory": {
+      "type": "string",
+      "description": "A directory where the app is placed"
+    },
     "sourceDir": {
       "type": "string",
       "default": "src",
diff --git a/packages/schematics/src/collection/application/application.spec.ts b/packages/schematics/src/collection/application/application.spec.ts
index 32201aa0fd581..beb4912ec3f35 100644
--- a/packages/schematics/src/collection/application/application.spec.ts
+++ b/packages/schematics/src/collection/application/application.spec.ts
@@ -54,11 +54,5 @@ describe('application', () => {
 
     const tsconfigJson = JSON.parse(getFileContent(tree, '/my-app/tsconfig.json'));
     expect(tsconfigJson.compilerOptions.paths).toEqual({ '@myApp/*': ['libs/*'] });
-
-    const tslintJson = JSON.parse(getFileContent(tree, '/my-app/tslint.json'));
-    expect(tslintJson.rules['nx-enforce-module-boundaries']).toEqual([
-      true,
-      { allow: [], lazyLoad: [], npmScope: 'myApp' }
-    ]);
   });
 });
diff --git a/packages/schematics/src/collection/application/files/__directory__/tslint.json b/packages/schematics/src/collection/application/files/__directory__/tslint.json
index cd88d82203ee8..6ea54dbca98ea 100644
--- a/packages/schematics/src/collection/application/files/__directory__/tslint.json
+++ b/packages/schematics/src/collection/application/files/__directory__/tslint.json
@@ -113,7 +113,6 @@
     "nx-enforce-module-boundaries": [
       true,
       {
-        "npmScope": "<%= npmScope %>",
         "lazyLoad": [],
         "allow": []
       }
diff --git a/packages/schematics/src/collection/lib/files/libs/__name__/__sourceDir__/__fileName__.spec.ts__tmpl__ b/packages/schematics/src/collection/lib/files/libs/__fullName__/__sourceDir__/__fileName__.spec.ts__tmpl__
similarity index 100%
rename from packages/schematics/src/collection/lib/files/libs/__name__/__sourceDir__/__fileName__.spec.ts__tmpl__
rename to packages/schematics/src/collection/lib/files/libs/__fullName__/__sourceDir__/__fileName__.spec.ts__tmpl__
diff --git a/packages/schematics/src/collection/lib/files/libs/__name__/__sourceDir__/__fileName__.ts__tmpl__ b/packages/schematics/src/collection/lib/files/libs/__fullName__/__sourceDir__/__fileName__.ts__tmpl__
similarity index 100%
rename from packages/schematics/src/collection/lib/files/libs/__name__/__sourceDir__/__fileName__.ts__tmpl__
rename to packages/schematics/src/collection/lib/files/libs/__fullName__/__sourceDir__/__fileName__.ts__tmpl__
diff --git a/packages/schematics/src/collection/lib/files/libs/__name__/index.ts__tmpl__ b/packages/schematics/src/collection/lib/files/libs/__fullName__/index.ts__tmpl__
similarity index 100%
rename from packages/schematics/src/collection/lib/files/libs/__name__/index.ts__tmpl__
rename to packages/schematics/src/collection/lib/files/libs/__fullName__/index.ts__tmpl__
diff --git a/packages/schematics/src/collection/lib/index.ts b/packages/schematics/src/collection/lib/index.ts
index 74d368e3c7446..368e860ca6c5a 100644
--- a/packages/schematics/src/collection/lib/index.ts
+++ b/packages/schematics/src/collection/lib/index.ts
@@ -18,14 +18,21 @@ import { serializeJson, addApp, cliConfig } from '../utility/fileutils';
 import { insertImport } from '@schematics/angular/utility/route-utils';
 import * as ts from 'typescript';
 import { addGlobal, addReexport, addRoute } from '../utility/ast-utils';
+import { offsetFromRoot } from '../utility/common';
 
-function addLibToAngularCliJson(options: Schema): Rule {
+interface NormalizedSchema extends Schema {
+  name: string;
+  fullName: string;
+  fullPath: string;
+}
+
+function addLibToAngularCliJson(options: NormalizedSchema): Rule {
   return (host: Tree) => {
     const json = cliConfig(host);
     json.apps = addApp(json.apps, {
-      name: options.name,
-      root: fullPath(options),
-      test: '../../../test.js',
+      name: options.fullName,
+      root: options.fullPath,
+      test: `${offsetFromRoot(options)}test.js`,
       appRoot: ''
     });
 
@@ -54,7 +61,7 @@ function addLazyLoadedRouterConfiguration(modulePath: string): Rule {
 }
 
 function addRouterConfiguration(
-  schema: Schema,
+  schema: NormalizedSchema,
   indexFilePath: string,
   moduleFileName: string,
   modulePath: string
@@ -76,14 +83,14 @@ function addRouterConfiguration(
   };
 }
 
-function addLoadChildren(schema: Schema): Rule {
+function addLoadChildren(schema: NormalizedSchema): Rule {
   return (host: Tree) => {
     const json = cliConfig(host);
 
     const moduleSource = host.read(schema.parentModule)!.toString('utf-8');
     const sourceFile = ts.createSourceFile(schema.parentModule, moduleSource, ts.ScriptTarget.Latest, true);
 
-    const loadChildren = `@${json.project.npmScope}/${toFileName(schema.name)}#${toClassName(schema.name)}Module`;
+    const loadChildren = `@${json.project.npmScope}/${toFileName(schema.fullName)}#${toClassName(schema.name)}Module`;
     insert(host, schema.parentModule, [
       ...addRoute(
         schema.parentModule,
@@ -95,14 +102,14 @@ function addLoadChildren(schema: Schema): Rule {
   };
 }
 
-function addChildren(schema: Schema): Rule {
+function addChildren(schema: NormalizedSchema): Rule {
   return (host: Tree) => {
     const json = cliConfig(host);
 
     const moduleSource = host.read(schema.parentModule)!.toString('utf-8');
     const sourceFile = ts.createSourceFile(schema.parentModule, moduleSource, ts.ScriptTarget.Latest, true);
     const constName = `${toPropertyName(schema.name)}Routes`;
-    const importPath = `@${json.project.npmScope}/${toFileName(schema.name)}`;
+    const importPath = `@${json.project.npmScope}/${toFileName(schema.fullName)}`;
 
     insert(host, schema.parentModule, [
       insertImport(sourceFile, schema.parentModule, constName, importPath),
@@ -112,7 +119,7 @@ function addChildren(schema: Schema): Rule {
   };
 }
 
-function updateTsLint(schema: Schema): Rule {
+function updateTsLint(schema: NormalizedSchema): Rule {
   return (host: Tree) => {
     const tsLint = JSON.parse(host.read('tslint.json')!.toString('utf-8'));
     if (
@@ -121,7 +128,7 @@ function updateTsLint(schema: Schema): Rule {
       tsLint['rules']['nx-enforce-module-boundaries'][1] &&
       tsLint['rules']['nx-enforce-module-boundaries'][1]['lazyLoad']
     ) {
-      tsLint['rules']['nx-enforce-module-boundaries'][1]['lazyLoad'].push(toFileName(schema.name));
+      tsLint['rules']['nx-enforce-module-boundaries'][1]['lazyLoad'].push(toFileName(schema.fullName));
       host.overwrite('tslint.json', serializeJson(tsLint));
     }
     return host;
@@ -129,16 +136,16 @@ function updateTsLint(schema: Schema): Rule {
 }
 
 export default function(schema: Schema): Rule {
-  const options = { ...schema, name: toFileName(schema.name) };
-  const moduleFileName = `${toFileName(schema.name)}.module`;
-  const modulePath = `${fullPath(schema)}/${moduleFileName}.ts`;
-  const indexFile = `libs/${toFileName(options.name)}/index.ts`;
+  const options = normalizeOptions(schema);
+  const moduleFileName = `${toFileName(options.name)}.module`;
+  const modulePath = `${options.fullPath}/${moduleFileName}.ts`;
+  const indexFile = `libs/${toFileName(options.fullName)}/index.ts`;
 
-  if (schema.routing && schema.nomodule) {
+  if (options.routing && options.nomodule) {
     throw new Error(`nomodule and routing cannot be used together`);
   }
 
-  if (!schema.routing && schema.lazy) {
+  if (!options.routing && options.lazy) {
     throw new Error(`routing must be set`);
   }
 
@@ -154,15 +161,18 @@ export default function(schema: Schema): Rule {
   return chain([
     branchAndMerge(chain([mergeWith(templateSource)])),
     addLibToAngularCliJson(options),
-    schema.routing && schema.lazy ? addLazyLoadedRouterConfiguration(modulePath) : noop(),
-    schema.routing && schema.lazy ? updateTsLint(schema) : noop(),
-    schema.routing && schema.lazy && schema.parentModule ? addLoadChildren(schema) : noop(),
+    options.routing && options.lazy ? addLazyLoadedRouterConfiguration(modulePath) : noop(),
+    options.routing && options.lazy ? updateTsLint(options) : noop(),
+    options.routing && options.lazy && options.parentModule ? addLoadChildren(options) : noop(),
 
-    schema.routing && !schema.lazy ? addRouterConfiguration(schema, indexFile, moduleFileName, modulePath) : noop(),
-    schema.routing && !schema.lazy && schema.parentModule ? addChildren(schema) : noop()
+    options.routing && !options.lazy ? addRouterConfiguration(options, indexFile, moduleFileName, modulePath) : noop(),
+    options.routing && !options.lazy && options.parentModule ? addChildren(options) : noop()
   ]);
 }
 
-function fullPath(options: Schema) {
-  return `libs/${toFileName(options.name)}/${options.sourceDir}`;
+function normalizeOptions(options: Schema): NormalizedSchema {
+  const name = toFileName(options.name);
+  const fullName = options.directory ? `${toFileName(options.directory)}/${name}` : name;
+  const fullPath = `libs/${fullName}/${options.sourceDir}`;
+  return { ...options, name, fullName, fullPath };
 }
diff --git a/packages/schematics/src/collection/lib/lib.spec.ts b/packages/schematics/src/collection/lib/lib.spec.ts
index 9b30f1c4939f6..63a11cd11ba91 100644
--- a/packages/schematics/src/collection/lib/lib.spec.ts
+++ b/packages/schematics/src/collection/lib/lib.spec.ts
@@ -16,33 +16,58 @@ describe('lib', () => {
     schematicRunner.logger.subscribe(s => console.log(s));
   });
 
-  it('should update angular-cli.json', () => {
-    const tree = schematicRunner.runSchematic('lib', { name: 'myLib' }, appTree);
-    const updatedAngularCLIJson = JSON.parse(getFileContent(tree, '/.angular-cli.json'));
-    expect(updatedAngularCLIJson.apps).toEqual([
-      {
-        appRoot: '',
-        name: 'my-lib',
-        root: 'libs/my-lib/src',
-        test: '../../../test.js'
-      }
-    ]);
-  });
+  describe('not nested', () => {
+    it('should update angular-cli.json', () => {
+      const tree = schematicRunner.runSchematic('lib', { name: 'myLib' }, appTree);
+      const updatedAngularCLIJson = JSON.parse(getFileContent(tree, '/.angular-cli.json'));
+      expect(updatedAngularCLIJson.apps).toEqual([
+        {
+          appRoot: '',
+          name: 'my-lib',
+          root: 'libs/my-lib/src',
+          test: '../../../test.js'
+        }
+      ]);
+    });
 
-  it('should generate files', () => {
-    const tree = schematicRunner.runSchematic('lib', { name: 'myLib', nomodule: true }, appTree);
-    expect(tree.exists('libs/my-lib/src/my-lib.ts')).toBeTruthy();
-    expect(tree.exists('libs/my-lib/src/my-lib.spec.ts')).toBeTruthy();
-    expect(tree.exists('libs/my-lib/index.ts')).toBeTruthy();
-    expect(getFileContent(tree, 'libs/my-lib/src/my-lib.ts')).toContain('class MyLib');
+    it('should generate files', () => {
+      const tree = schematicRunner.runSchematic('lib', { name: 'myLib', nomodule: true }, appTree);
+      expect(tree.exists('libs/my-lib/src/my-lib.ts')).toBeTruthy();
+      expect(tree.exists('libs/my-lib/src/my-lib.spec.ts')).toBeTruthy();
+      expect(tree.exists('libs/my-lib/index.ts')).toBeTruthy();
+      expect(getFileContent(tree, 'libs/my-lib/src/my-lib.ts')).toContain('class MyLib');
+    });
+
+    it('should generate files', () => {
+      const tree = schematicRunner.runSchematic('lib', { name: 'myLib' }, appTree);
+      expect(tree.exists('libs/my-lib/src/my-lib.module.ts')).toBeTruthy();
+      expect(tree.exists('libs/my-lib/src/my-lib.module.spec.ts')).toBeTruthy();
+      expect(tree.exists('libs/my-lib/index.ts')).toBeTruthy();
+      expect(getFileContent(tree, 'libs/my-lib/src/my-lib.module.ts')).toContain('class MyLibModule');
+    });
   });
 
-  it('should generate files', () => {
-    const tree = schematicRunner.runSchematic('lib', { name: 'myLib' }, appTree);
-    expect(tree.exists('libs/my-lib/src/my-lib.module.ts')).toBeTruthy();
-    expect(tree.exists('libs/my-lib/src/my-lib.module.spec.ts')).toBeTruthy();
-    expect(tree.exists('libs/my-lib/index.ts')).toBeTruthy();
-    expect(getFileContent(tree, 'libs/my-lib/src/my-lib.module.ts')).toContain('class MyLibModule');
+  describe('nested', () => {
+    it('should update angular-cli.json', () => {
+      const tree = schematicRunner.runSchematic('lib', { name: 'myLib', directory: 'myDir' }, appTree);
+      const updatedAngularCLIJson = JSON.parse(getFileContent(tree, '/.angular-cli.json'));
+      expect(updatedAngularCLIJson.apps).toEqual([
+        {
+          appRoot: '',
+          name: 'my-dir/my-lib',
+          root: 'libs/my-dir/my-lib/src',
+          test: '../../../../test.js'
+        }
+      ]);
+    });
+
+    it('should generate files', () => {
+      const tree = schematicRunner.runSchematic('lib', { name: 'myLib', directory: 'myDir', nomodule: true }, appTree);
+      expect(tree.exists('libs/my-dir/my-lib/src/my-lib.ts')).toBeTruthy();
+      expect(tree.exists('libs/my-dir/my-lib/src/my-lib.spec.ts')).toBeTruthy();
+      expect(tree.exists('libs/my-dir/my-lib/index.ts')).toBeTruthy();
+      expect(getFileContent(tree, 'libs/my-dir/my-lib/src/my-lib.ts')).toContain('class MyLib');
+    });
   });
 
   describe('router', () => {
@@ -60,53 +85,75 @@ describe('lib', () => {
 
     describe('lazy', () => {
       it('should add RouterModule.forChild', () => {
-        const tree = schematicRunner.runSchematic('lib', { name: 'myLib', routing: true, lazy: true }, appTree);
-        expect(tree.exists('libs/my-lib/src/my-lib.module.ts')).toBeTruthy();
-        expect(getFileContent(tree, 'libs/my-lib/src/my-lib.module.ts')).toContain('RouterModule.forChild');
+        const tree = schematicRunner.runSchematic(
+          'lib',
+          { name: 'myLib', directory: 'myDir', routing: true, lazy: true },
+          appTree
+        );
+        expect(tree.exists('libs/my-dir/my-lib/src/my-lib.module.ts')).toBeTruthy();
+        expect(getFileContent(tree, 'libs/my-dir/my-lib/src/my-lib.module.ts')).toContain('RouterModule.forChild');
       });
 
       it('should update the parent module', () => {
         appTree = createApp(appTree, 'myapp');
         const tree = schematicRunner.runSchematic(
           'lib',
-          { name: 'myLib', routing: true, lazy: true, parentModule: 'apps/myapp/src/app/app.module.ts' },
+          {
+            name: 'myLib',
+            directory: 'myDir',
+            routing: true,
+            lazy: true,
+            parentModule: 'apps/myapp/src/app/app.module.ts'
+          },
           appTree
         );
         expect(getFileContent(tree, 'apps/myapp/src/app/app.module.ts')).toContain(
-          `RouterModule.forRoot([{path: 'my-lib', loadChildren: '@proj/my-lib#MyLibModule'}])`
+          `RouterModule.forRoot([{path: 'my-lib', loadChildren: '@proj/my-dir/my-lib#MyLibModule'}])`
         );
 
         const tree2 = schematicRunner.runSchematic(
           'lib',
-          { name: 'myLib2', routing: true, lazy: true, parentModule: 'apps/myapp/src/app/app.module.ts' },
+          {
+            name: 'myLib2',
+            directory: 'myDir',
+            routing: true,
+            lazy: true,
+            parentModule: 'apps/myapp/src/app/app.module.ts'
+          },
           tree
         );
         expect(getFileContent(tree2, 'apps/myapp/src/app/app.module.ts')).toContain(
-          `RouterModule.forRoot([{path: 'my-lib', loadChildren: '@proj/my-lib#MyLibModule'}, {path: 'my-lib2', loadChildren: '@proj/my-lib2#MyLib2Module'}])`
+          `RouterModule.forRoot([{path: 'my-lib', loadChildren: '@proj/my-dir/my-lib#MyLibModule'}, {path: 'my-lib2', loadChildren: '@proj/my-dir/my-lib2#MyLib2Module'}])`
         );
       });
 
       it('should register the module as lazy loaded in tslint.json', () => {
-        const tree = schematicRunner.runSchematic('lib', { name: 'myLib', routing: true, lazy: true }, appTree);
+        const tree = schematicRunner.runSchematic(
+          'lib',
+          { name: 'myLib', directory: 'myDir', routing: true, lazy: true },
+          appTree
+        );
         const tslint = JSON.parse(getFileContent(tree, 'tslint.json'));
-        expect(tslint['rules']['nx-enforce-module-boundaries'][1]['lazyLoad']).toEqual(['my-lib']);
+        expect(tslint['rules']['nx-enforce-module-boundaries'][1]['lazyLoad']).toEqual(['my-dir/my-lib']);
       });
     });
 
     describe('eager', () => {
       it('should add RouterModule and define an array of routes', () => {
-        const tree = schematicRunner.runSchematic('lib', { name: 'myLib', routing: true }, appTree);
-        expect(tree.exists('libs/my-lib/src/my-lib.module.ts')).toBeTruthy();
-        expect(getFileContent(tree, 'libs/my-lib/src/my-lib.module.ts')).toContain('RouterModule]');
-        expect(getFileContent(tree, 'libs/my-lib/src/my-lib.module.ts')).toContain('const myLibRoutes: Route[] = ');
-        expect(getFileContent(tree, 'libs/my-lib/index.ts')).toContain('myLibRoutes');
+        const tree = schematicRunner.runSchematic('lib', { name: 'myLib', directory: 'myDir', routing: true }, appTree);
+        expect(tree.exists('libs/my-dir/my-lib/src/my-lib.module.ts')).toBeTruthy();
+        expect(getFileContent(tree, 'libs/my-dir/my-lib/src/my-lib.module.ts')).toContain('RouterModule]');
+        expect(getFileContent(tree, 'libs/my-dir/my-lib/src/my-lib.module.ts')).toContain(
+          'const myLibRoutes: Route[] = '
+        );
+        expect(getFileContent(tree, 'libs/my-dir/my-lib/index.ts')).toContain('myLibRoutes');
       });
 
       it('should update the parent module', () => {
         appTree = createApp(appTree, 'myapp');
         const tree = schematicRunner.runSchematic(
           'lib',
-          { name: 'myLib', routing: true, parentModule: 'apps/myapp/src/app/app.module.ts' },
+          { name: 'myLib', directory: 'myDir', routing: true, parentModule: 'apps/myapp/src/app/app.module.ts' },
           appTree
         );
         expect(getFileContent(tree, 'apps/myapp/src/app/app.module.ts')).toContain(
@@ -115,7 +162,7 @@ describe('lib', () => {
 
         const tree2 = schematicRunner.runSchematic(
           'lib',
-          { name: 'myLib2', routing: true, parentModule: 'apps/myapp/src/app/app.module.ts' },
+          { name: 'myLib2', directory: 'myDir', routing: true, parentModule: 'apps/myapp/src/app/app.module.ts' },
           tree
         );
         expect(getFileContent(tree2, 'apps/myapp/src/app/app.module.ts')).toContain(
diff --git a/packages/schematics/src/collection/lib/ngfiles/libs/__name__/__sourceDir__/__fileName__.module.spec.ts__tmpl__ b/packages/schematics/src/collection/lib/ngfiles/libs/__fullName__/__sourceDir__/__fileName__.module.spec.ts__tmpl__
similarity index 100%
rename from packages/schematics/src/collection/lib/ngfiles/libs/__name__/__sourceDir__/__fileName__.module.spec.ts__tmpl__
rename to packages/schematics/src/collection/lib/ngfiles/libs/__fullName__/__sourceDir__/__fileName__.module.spec.ts__tmpl__
diff --git a/packages/schematics/src/collection/lib/ngfiles/libs/__name__/__sourceDir__/__fileName__.module.ts__tmpl__ b/packages/schematics/src/collection/lib/ngfiles/libs/__fullName__/__sourceDir__/__fileName__.module.ts__tmpl__
similarity index 100%
rename from packages/schematics/src/collection/lib/ngfiles/libs/__name__/__sourceDir__/__fileName__.module.ts__tmpl__
rename to packages/schematics/src/collection/lib/ngfiles/libs/__fullName__/__sourceDir__/__fileName__.module.ts__tmpl__
diff --git a/packages/schematics/src/collection/lib/ngfiles/libs/__name__/index.ts__tmpl__ b/packages/schematics/src/collection/lib/ngfiles/libs/__fullName__/index.ts__tmpl__
similarity index 100%
rename from packages/schematics/src/collection/lib/ngfiles/libs/__name__/index.ts__tmpl__
rename to packages/schematics/src/collection/lib/ngfiles/libs/__fullName__/index.ts__tmpl__
diff --git a/packages/schematics/src/collection/lib/schema.d.ts b/packages/schematics/src/collection/lib/schema.d.ts
index 11cf317c67c1c..0f62e3cbd1fac 100644
--- a/packages/schematics/src/collection/lib/schema.d.ts
+++ b/packages/schematics/src/collection/lib/schema.d.ts
@@ -1,5 +1,6 @@
 export interface Schema {
   name: string;
+  directory?: string;
   sourceDir?: string;
   nomodule: boolean;
 
diff --git a/packages/schematics/src/collection/lib/schema.json b/packages/schematics/src/collection/lib/schema.json
index 75cef36f2eb70..851f89ef6bf3d 100644
--- a/packages/schematics/src/collection/lib/schema.json
+++ b/packages/schematics/src/collection/lib/schema.json
@@ -8,6 +8,10 @@
       "type": "string",
       "description": "Library name"
     },
+    "directory": {
+      "type": "string",
+      "description": "A directory where the app is placed"
+    },
     "sourceDir": {
       "type": "string",
       "default": "src",
diff --git a/packages/schematics/src/collection/utility/common.ts b/packages/schematics/src/collection/utility/common.ts
index 037a1677b798c..801ec329938c5 100644
--- a/packages/schematics/src/collection/utility/common.ts
+++ b/packages/schematics/src/collection/utility/common.ts
@@ -1,6 +1,7 @@
 import { Tree, Rule } from '@angular-devkit/schematics';
 import { angularJsVersion } from './lib-versions';
 import { serializeJson } from './fileutils';
+import { Schema } from '../app/schema';
 
 export function addUpgradeToPackageJson(): Rule {
   return (host: Tree) => {
@@ -23,3 +24,14 @@ export function addUpgradeToPackageJson(): Rule {
     return host;
   };
 }
+
+export function offsetFromRoot(options: Schema): string {
+  let offset = '../../../';
+  if (options.directory) {
+    const parts = options.directory.split('/').length;
+    for (let i = 0; i < parts; ++i) {
+      offset += '../';
+    }
+  }
+  return offset;
+}
diff --git a/packages/schematics/src/collection/utility/lib-versions.ts b/packages/schematics/src/collection/utility/lib-versions.ts
index 7307afe519158..df2c91c963097 100644
--- a/packages/schematics/src/collection/utility/lib-versions.ts
+++ b/packages/schematics/src/collection/utility/lib-versions.ts
@@ -4,7 +4,7 @@ export const angularJsVersion = '1.6.6';
 export const ngrxVersion = '^4.1.0';
 export const nxVersion = '*';
 export const schematicsVersion = '*';
-export const latestMigration = '20171129-change-schema';
+export const latestMigration = '20171205-remove-npmscope-from-tslintjson';
 export const prettierVersion = '1.8.2';
 
 export const libVersions = {
diff --git a/packages/schematics/src/collection/workspace/index.ts b/packages/schematics/src/collection/workspace/index.ts
index 3ba9441d2eeba..0a1eac37ab9d4 100644
--- a/packages/schematics/src/collection/workspace/index.ts
+++ b/packages/schematics/src/collection/workspace/index.ts
@@ -13,7 +13,14 @@ import {
 } from '@angular-devkit/schematics';
 import { Schema } from './schema';
 import * as path from 'path';
-import { angularCliVersion, ngrxVersion, nxVersion, prettierVersion, schematicsVersion } from '../utility/lib-versions';
+import {
+  angularCliVersion,
+  latestMigration,
+  ngrxVersion,
+  nxVersion,
+  prettierVersion,
+  schematicsVersion
+} from '../utility/lib-versions';
 import * as fs from 'fs';
 import { join } from 'path';
 import { serializeJson, updateJsonFile } from '../utility/fileutils';
@@ -71,6 +78,7 @@ function updateAngularCLIJson(options: Schema) {
     }
     const angularCliJson = JSON.parse(host.read('.angular-cli.json')!.toString('utf-8'));
     angularCliJson.project.npmScope = npmScope(options);
+    angularCliJson.project.latestMigration = latestMigration;
 
     if (angularCliJson.apps.length !== 1) {
       throw new Error('Can only convert projects with one app');
@@ -141,7 +149,7 @@ function updateTsLintJson(options: Schema) {
       ['no-trailing-whitespace', 'one-line', 'quotemark', 'typedef-whitespace', 'whitespace'].forEach(key => {
         json[key] = undefined;
       });
-      json['nx-enforce-module-boundaries'] = [true, { npmScope: npmScope(options), lazyLoad: [], allow: [] }];
+      json['nx-enforce-module-boundaries'] = [true, { lazyLoad: [], allow: [] }];
     });
     return host;
   };
diff --git a/packages/schematics/src/tslint/nxEnforceModuleBoundariesRule.spec.ts b/packages/schematics/src/tslint/nxEnforceModuleBoundariesRule.spec.ts
index d013b02f66d26..b46347f34836e 100644
--- a/packages/schematics/src/tslint/nxEnforceModuleBoundariesRule.spec.ts
+++ b/packages/schematics/src/tslint/nxEnforceModuleBoundariesRule.spec.ts
@@ -6,7 +6,7 @@ import { Rule } from './nxEnforceModuleBoundariesRule';
 describe('Enforce Module Boundaries', () => {
   it('should not error when everything is in order', () => {
     const failures = runRule(
-      { npmScope: 'mycompany', allow: ['@mycompany/mylib/deep'] },
+      { allow: ['@mycompany/mylib/deep'] },
       `
       import '@mycompany/mylib';
       import '@mycompany/mylib/deep';
@@ -25,14 +25,14 @@ describe('Enforce Module Boundaries', () => {
   });
 
   it('should error about deep imports into libraries', () => {
-    const failures = runRule({ npmScope: 'mycompany' }, `import '@mycompany/mylib/blah';`);
+    const failures = runRule({}, `import '@mycompany/mylib/blah';`);
 
     expect(failures.length).toEqual(1);
     expect(failures[0].getFailure()).toEqual('deep imports into libraries are forbidden');
   });
 
   it('should error on importing a lazy-loaded library', () => {
-    const failures = runRule({ npmScope: 'mycompany', lazyLoad: ['mylib'] }, `import '@mycompany/mylib';`);
+    const failures = runRule({ lazyLoad: ['mylib'] }, `import '@mycompany/mylib';`);
 
     expect(failures.length).toEqual(1);
     expect(failures[0].getFailure()).toEqual('import of lazy-loaded libraries are forbidden');
@@ -47,6 +47,6 @@ function runRule(ruleArguments: any, content: string): RuleFailure[] {
   };
 
   const sourceFile = ts.createSourceFile('proj/apps/myapp/src/main.ts', content, ts.ScriptTarget.Latest, true);
-  const rule = new Rule(options, 'proj');
+  const rule = new Rule(options, 'proj', 'mycompany', ['mylib']);
   return rule.apply(sourceFile);
 }
diff --git a/packages/schematics/src/tslint/nxEnforceModuleBoundariesRule.ts b/packages/schematics/src/tslint/nxEnforceModuleBoundariesRule.ts
index 1efe32dec95ad..625fdf54aa5a5 100644
--- a/packages/schematics/src/tslint/nxEnforceModuleBoundariesRule.ts
+++ b/packages/schematics/src/tslint/nxEnforceModuleBoundariesRule.ts
@@ -2,40 +2,71 @@ import * as path from 'path';
 import * as Lint from 'tslint';
 import { IOptions } from 'tslint';
 import * as ts from 'typescript';
+import { readFileSync } from 'fs';
 
 export class Rule extends Lint.Rules.AbstractRule {
-  constructor(options: IOptions, private path?: string) {
+  constructor(options: IOptions, private path?: string, private npmScope?: string, private appNames?: string[]) {
     super(options);
     if (!path) {
+      const cliConfig = this.readCliConfig();
       this.path = process.cwd();
+      this.npmScope = cliConfig.project.npmScope;
+      this.appNames = cliConfig.apps.map(a => a.name);
     }
   }
 
   public apply(sourceFile: ts.SourceFile): Lint.RuleFailure[] {
-    return this.applyWithWalker(new EnforceModuleBoundariesWalker(sourceFile, this.getOptions(), this.path));
+    return this.applyWithWalker(
+      new EnforceModuleBoundariesWalker(sourceFile, this.getOptions(), this.path, this.npmScope, this.appNames)
+    );
+  }
+
+  private readCliConfig(): any {
+    return JSON.parse(readFileSync(`.angular-cli.json`, 'UTF-8'));
   }
 }
 
 class EnforceModuleBoundariesWalker extends Lint.RuleWalker {
-  constructor(sourceFile: ts.SourceFile, options: IOptions, private projectPath: string) {
+  constructor(
+    sourceFile: ts.SourceFile,
+    options: IOptions,
+    private projectPath: string,
+    private npmScope: string,
+    private appNames: string[]
+  ) {
     super(sourceFile, options);
   }
 
   public visitImportDeclaration(node: ts.ImportDeclaration) {
-    const npmScope = `@${this.getOptions()[0].npmScope}`;
-    const lazyLoad = this.getOptions()[0].lazyLoad;
+    const imp = node.moduleSpecifier.getText().substring(1, node.moduleSpecifier.getText().length - 1);
     const allow: string[] = Array.isArray(this.getOptions()[0].allow)
       ? this.getOptions()[0].allow.map(a => `${a}`)
       : [];
-    const imp = node.moduleSpecifier.getText().substring(1, node.moduleSpecifier.getText().length - 1);
-    const impParts = imp.split(path.sep);
+    const lazyLoad: string[] = Array.isArray(this.getOptions()[0].lazyLoad)
+      ? this.getOptions()[0].lazyLoad.map(a => `${a}`)
+      : [];
 
-    if (impParts[0] === npmScope && allow.indexOf(imp) === -1 && impParts.length > 2) {
-      this.addFailureAt(node.getStart(), node.getWidth(), 'deep imports into libraries are forbidden');
-    } else if (impParts[0] === npmScope && impParts.length === 2 && lazyLoad && lazyLoad.indexOf(impParts[1]) > -1) {
+    // whitelisted import => return
+    if (allow.indexOf(imp) > -1) {
+      super.visitImportDeclaration(node);
+      return;
+    }
+
+    const lazyLoaded = lazyLoad.filter(a => imp.startsWith(`@${this.npmScope}/${a}`))[0];
+    if (lazyLoaded) {
       this.addFailureAt(node.getStart(), node.getWidth(), 'import of lazy-loaded libraries are forbidden');
-    } else if (this.isRelative(imp) && this.isRelativeImportIntoAnotherProject(imp)) {
+      return;
+    }
+
+    if (this.isRelative(imp) && this.isRelativeImportIntoAnotherProject(imp)) {
       this.addFailureAt(node.getStart(), node.getWidth(), 'relative imports of libraries are forbidden');
+      return;
+    }
+
+    const app = this.appNames.filter(a => imp.startsWith(`@${this.npmScope}/${a}`))[0];
+    if (app && imp !== `@${this.npmScope}/${app}`) {
+      this.addFailureAt(node.getStart(), node.getWidth(), 'deep imports into libraries are forbidden');
+      return;
     }
 
     super.visitImportDeclaration(node);