diff --git a/poethepoet/plugin.py b/poethepoet/plugin.py
index 3c478c9c..f17614af 100644
--- a/poethepoet/plugin.py
+++ b/poethepoet/plugin.py
@@ -56,7 +56,11 @@ def get_poe(cls, application: Application, io: IO):
         except:  # noqa: E722
             poetry_env_path = None
 
-        cwd = Path().resolve()
+        # Get the cwd from poetry to ensure '--directory subdir' usage
+        try:
+            cwd = application.poetry.pyproject_path
+        except AttributeError:
+            cwd = Path().resolve()
         config = PoeConfig(cwd=cwd)
 
         if io.output.is_quiet():
diff --git a/tests/conftest.py b/tests/conftest.py
index 55189de5..94112d91 100644
--- a/tests/conftest.py
+++ b/tests/conftest.py
@@ -254,7 +254,7 @@ def run_poetry(args: List[str], cwd: str, env: Optional[Dict[str, str]] = None):
         venv_location,
         [
             ".[poetry_plugin]",
-            "./tests/fixtures/packages/poetry-1.2.1-py3-none-any.whl",
+            "./tests/fixtures/packages/poetry-1.8.2-py3-none-any.whl",
         ],
         require_empty=True,
     ):
diff --git a/tests/fixtures/packages/poetry-1.2.1-py3-none-any.whl b/tests/fixtures/packages/poetry-1.2.1-py3-none-any.whl
deleted file mode 100644
index d8f3d614..00000000
Binary files a/tests/fixtures/packages/poetry-1.2.1-py3-none-any.whl and /dev/null differ
diff --git a/tests/fixtures/packages/poetry-1.8.2-py3-none-any.whl b/tests/fixtures/packages/poetry-1.8.2-py3-none-any.whl
new file mode 100644
index 00000000..d54e3b6d
Binary files /dev/null and b/tests/fixtures/packages/poetry-1.8.2-py3-none-any.whl differ
diff --git a/tests/test_poetry_plugin.py b/tests/test_poetry_plugin.py
index 82ed12cf..c76f3734 100644
--- a/tests/test_poetry_plugin.py
+++ b/tests/test_poetry_plugin.py
@@ -134,3 +134,40 @@ def test_running_poetry_command_with_hooks(run_poetry, projects):
     assert "THIS IS YOUR ENV!" in result.stdout
     assert "THAT WAS YOUR ENV!" in result.stdout
     # assert result.stderr == ""
+
+
+@pytest.mark.slow()
+@pytest.mark.usefixtures("_setup_poetry_project")
+def test_running_poetry_command_with_hooks_with_directory(run_poetry, projects):
+    result = run_poetry(
+        ["--directory=" + str(projects["poetry_plugin"]), "env", "info"],
+        cwd=projects["poetry_plugin"].parent,
+    )
+    assert "THIS IS YOUR ENV!" in result.stdout
+    assert "THAT WAS YOUR ENV!" in result.stdout
+    # assert result.stderr == ""
+
+
+@pytest.mark.slow()
+@pytest.mark.usefixtures("_setup_poetry_project")
+def test_task_with_cli_dependency_with_directory(run_poetry, projects, is_windows):
+    result = run_poetry(
+        [
+            "--directory=" + str(projects["poetry_plugin"]),
+            "poe",
+            "cow-greet",
+            "yo yo yo",
+        ],
+        cwd=projects["poetry_plugin"].parent,
+    )
+    if is_windows:
+        assert result.stdout.startswith("Poe => cowpy 'yo yo yo'")
+        assert "< yo yo yo >" in result.stdout
+    else:
+        # On POSIX cowpy expects notices its being called as a subprocess and tries
+        # unproductively to take input from stdin
+        assert result.stdout.startswith("Poe => cowpy 'yo yo yo'")
+        assert (
+            "< Cowacter, eyes:default, tongue:False, thoughts:False >" in result.stdout
+        )
+    # assert result.stderr == ""