diff --git a/lisp/progmodes/project.el b/lisp/progmodes/project.el
index 8a128df0d16..d2bac95aaea 100644
--- a/lisp/progmodes/project.el
+++ b/lisp/progmodes/project.el
@@ -369,8 +369,8 @@ the user.")
 
 (cl-defgeneric project-files (project &optional dirs)
   "Return a list of files in directories DIRS in PROJECT.
-DIRS is a list of absolute directories; it should be some
-subset of the project root and external roots.
+DIRS is a list of absolute directories; the values can be some of the
+project roots or external roots or subdirectories of those.
 
 The default implementation uses `find-program'.  PROJECT is used
 to find the list of ignores for each directory."
@@ -679,7 +679,7 @@ See `project-vc-extra-root-markers' for the marker value format.")
            (backend (cadr project)))
        (when backend
          (require (intern (concat "vc-" (downcase (symbol-name backend))))))
-       (if (and (file-equal-p dir (nth 2 project))
+       (if (and (file-in-directory-p dir (nth 2 project))
                 (cond
                  ((eq backend 'Hg))
                  ((and (eq backend 'Git)
diff --git a/test/lisp/progmodes/project-tests.el b/test/lisp/progmodes/project-tests.el
index cbc0bd1e8b9..947ad94a385 100644
--- a/test/lisp/progmodes/project-tests.el
+++ b/test/lisp/progmodes/project-tests.el
@@ -157,6 +157,20 @@ When `project-ignores' includes a name matching project dir."
     (should (equal '(".dir-locals.el" "foo")
                    (mapcar #'file-name-nondirectory (project-files project))))))
 
+(ert-deftest project-vc-supports-files-in-subdirectory ()
+  "Check that it lists only files from subdirectory."
+  (skip-unless (eq (vc-responsible-backend default-directory) 'Git))
+  (let* ((dir (ert-resource-directory))
+         (_ (vc-file-clearprops dir))
+         (project-vc-extra-root-markers '("project-tests.el"))
+         (project (project-current nil dir)))
+    (should-not (null project))
+    (should (string-match-p "/test/lisp/progmodes/\\'" (project-root project)))
+    (should (equal '(".dir-locals.el" "etc" "foo")
+                   (mapcar #'file-name-nondirectory
+                           (project-files project
+                                          (list dir)))))))
+
 (ert-deftest project-vc-nonexistent-directory-no-error ()
   "Check that is doesn't error out when the current dir does not exist."
   (skip-unless (eq (vc-responsible-backend default-directory) 'Git))