diff --git a/coverage/config.py b/coverage/config.py
index 84d9758bf..2af4a1cc8 100644
--- a/coverage/config.py
+++ b/coverage/config.py
@@ -195,6 +195,7 @@ def __init__(self):
         self.run_include = None
         self.run_omit = None
         self.source = None
+        self.source_pkgs = []
         self.timid = False
         self._crash = None
 
@@ -361,6 +362,7 @@ def copy(self):
         ('run_include', 'run:include', 'list'),
         ('run_omit', 'run:omit', 'list'),
         ('source', 'run:source', 'list'),
+        ('source_pkgs', 'run:source_pkgs', 'list'),
         ('timid', 'run:timid', 'boolean'),
         ('_crash', 'run:_crash'),
 
diff --git a/coverage/control.py b/coverage/control.py
index d60db2126..ebc380091 100644
--- a/coverage/control.py
+++ b/coverage/control.py
@@ -99,7 +99,7 @@ def current(cls):
     def __init__(
         self, data_file=_DEFAULT_DATAFILE, data_suffix=None, cover_pylib=None,
         auto_data=False, timid=None, branch=None, config_file=True,
-        source=None, omit=None, include=None, debug=None,
+        source=None, source_pkgs=None, omit=None, include=None, debug=None,
         concurrency=None, check_preimported=False, context=None,
     ):
         """
@@ -188,7 +188,7 @@ def __init__(
             config_file=config_file,
             data_file=data_file, cover_pylib=cover_pylib, timid=timid,
             branch=branch, parallel=bool_or_none(data_suffix),
-            source=source, run_omit=omit, run_include=include, debug=debug,
+            source=source, source_pkgs=source_pkgs, run_omit=omit, run_include=include, debug=debug,
             report_omit=omit, report_include=include,
             concurrency=concurrency, context=context,
             )
diff --git a/coverage/inorout.py b/coverage/inorout.py
index ec5f2c1ac..fbd1a95ed 100644
--- a/coverage/inorout.py
+++ b/coverage/inorout.py
@@ -132,6 +132,7 @@ def __init__(self, warn, debug):
 
     def configure(self, config):
         """Apply the configuration to get ready for decision-time."""
+        self.source_pkgs.extend(config.source_pkgs)
         for src in config.source or []:
             if os.path.isdir(src):
                 self.source.append(canonical_filename(src))
diff --git a/tests/modules/ambigious/__init__.py b/tests/modules/ambigious/__init__.py
new file mode 100644
index 000000000..e69de29bb
diff --git a/tests/modules/ambigious/pkg1/__init__.py b/tests/modules/ambigious/pkg1/__init__.py
new file mode 100644
index 000000000..e69de29bb
diff --git a/tests/modules/ambigious/pkg1/ambigious.py b/tests/modules/ambigious/pkg1/ambigious.py
new file mode 100644
index 000000000..e69de29bb
diff --git a/tests/test_api.py b/tests/test_api.py
index 5ede9158b..514ed9948 100644
--- a/tests/test_api.py
+++ b/tests/test_api.py
@@ -926,6 +926,28 @@ def test_source_package_as_package_part_omitted(self):
         self.filenames_not_in(lines, "p1b")
         self.assertEqual(lines['p1c'], 0)
 
+    def test_ambigious_source_package_as_dir(self):
+        # pkg1 is a directory and a pkg, since we cd into tests/modules/ambigious
+        self.chdir(self.nice_file(TESTS_DIR, 'modules', "ambigious"))
+        # pkg1 defaults to directory because tests/modules/ambigious/pkg1 exists
+        lines = self.coverage_usepkgs(source=["pkg1"])
+        self.assertEqual(
+            self.coverage_usepkgs(source=["pkg1"]),
+            {
+                u"__init__.py": 0, u"__init__": 0,
+                u"ambigious.py": 0, u"ambigious": 0,
+            },
+        )
+
+    def test_ambigious_source_package_as_package(self):
+        # pkg1 is a directory and a pkg, since we cd into tests/modules/ambigious
+        self.chdir(self.nice_file(TESTS_DIR, 'modules', "ambigious"))
+        lines = self.coverage_usepkgs(source_pkgs=["pkg1"])
+        self.filenames_in(lines, "p1a p1b")
+        self.filenames_not_in(lines, "p2a p2b othera otherb osa osb ambigious")
+        # Because source= was specified, we do search for unexecuted files.
+        self.assertEqual(lines['p1c'], 0)
+
 
 class ReportIncludeOmitTest(IncludeOmitTestsMixin, CoverageTest):
     """Tests of the report include/omit functionality."""
diff --git a/tests/test_config.py b/tests/test_config.py
index 89ecb17c6..dd86303f2 100644
--- a/tests/test_config.py
+++ b/tests/test_config.py
@@ -462,6 +462,7 @@ class ConfigFileTest(UsingModulesMixin, CoverageTest):
         ; this omit is overriden by the omit from [report]
         omit = twenty
         source = myapp
+        source_pkgs = ned
         plugins =
             plugins.a_plugin
             plugins.another
@@ -553,6 +554,7 @@ def assert_config_settings_are_correct(self, cov):
         self.assertTrue(cov.config.parallel)
         self.assertEqual(cov.config.concurrency, ["thread"])
         self.assertEqual(cov.config.source, ["myapp"])
+        self.assertEqual(cov.config.source_pkgs, ["ned"])
         self.assertEqual(cov.config.disable_warnings, ["abcd", "efgh"])
 
         self.assertEqual(cov.get_exclude_list(), ["if 0:", r"pragma:?\s+no cover", "another_tab"])