diff --git a/lib/module.js b/lib/module.js
index 515ab6789ca658..520a3df32bd58d 100644
--- a/lib/module.js
+++ b/lib/module.js
@@ -508,6 +508,19 @@ Module.requireRepl = function() {
   return Module._load('internal/repl', '.');
 };
 
+Module._preloadModules = function(requests) {
+  if (requests) {
+    // Preloaded modules have a dummy parent module which is deemed to exist
+    // in the current working directory. This seeds the search path for
+    // preloaded modules.
+    var parent = new Module('internal/preload', null);
+    parent.paths = Module._nodeModulePaths(process.cwd());
+    requests.forEach(function(request) {
+      Module._load(request, parent, false);
+    });
+  }
+};
+
 Module._initPaths();
 
 // backwards compatibility
diff --git a/src/node.js b/src/node.js
index 065c337e743993..b07716703cb19a 100644
--- a/src/node.js
+++ b/src/node.js
@@ -858,10 +858,7 @@
   // Load preload modules
   startup.preloadModules = function() {
     if (process._preload_modules) {
-      var Module = NativeModule.require('module');
-      process._preload_modules.forEach(function(module) {
-        Module._load(module);
-      });
+      NativeModule.require('module')._preloadModules(process._preload_modules);
     }
   };
 
diff --git a/test/fixtures/cluster-preload.js b/test/fixtures/cluster-preload.js
index 651fc480e8b84a..23e020aa20e5b1 100644
--- a/test/fixtures/cluster-preload.js
+++ b/test/fixtures/cluster-preload.js
@@ -1,3 +1,15 @@
+var assert = require('assert');
+
+// https://github.com/nodejs/io.js/issues/1803
+// this module is used as a preload module. It should have a parent with the
+// module search paths initialized from the current working directory
+assert.ok(module.parent);
+var expectedPaths = require('module')._nodeModulePaths(process.cwd());
+assert.ok(module.parent.paths.length === expectedPaths.length &&
+  module.parent.paths.every(function(e,i) {
+    return e === expectedPaths[i];
+  }));
+
 var cluster = require('cluster');
 cluster.isMaster || process.exit(42 + cluster.worker.id); // +42 to distinguish
 // from exit(1) for other random reasons