diff --git a/tools/compiler_cli/package.json b/tools/compiler_cli/package.json
index 61ba603234..1f27e74189 100644
--- a/tools/compiler_cli/package.json
+++ b/tools/compiler_cli/package.json
@@ -1,11 +1,11 @@
 {
-  "name": "angular2-template-compiler",
-  "version": "0.1.9",
+  "name": "@angular/compiler-cli",
+  "version": "0.2.0",
   "description": "Execute angular2 template compiler in nodejs.",
   "main": "index.js",
   "typings": "index.d.ts",
   "bin": {
-     "ng2tc": "./main.js"
+     "ngc": "./main.js"
   },
   "dependencies": {
     "ts-metadata-collector": "^0.1.0",
@@ -14,10 +14,10 @@
     "parse5": "1.3.2"
   },
   "peerDependencies": {
-    "typescript": "^1.8.0 || ^1.9.0-dev",
-    "@angular/compiler": "^0.0.0-5",
-    "@angular/platform-server": "^0.0.0-5",
-    "@angular/core": "^0.0.0-5"
+    "typescript": "^1.9.0-dev",
+    "@angular/compiler": "^2.0.0-rc",
+    "@angular/platform-server": "^2.0.0-rc",
+    "@angular/core": "^2.0.0-rc"
   },
   "repository": {
     "type": "git",
diff --git a/tools/compiler_cli/src/codegen.ts b/tools/compiler_cli/src/codegen.ts
index 135e3e1ef6..bfe3956aa6 100644
--- a/tools/compiler_cli/src/codegen.ts
+++ b/tools/compiler_cli/src/codegen.ts
@@ -31,6 +31,8 @@ const PREAMBLE = `/**
  */
 `;
 
+// TODO(alexeagle): we end up passing options and ngOptions everywhere.
+// Maybe this should extend ts.CompilerOptions so we only need this one.
 export interface AngularCompilerOptions {
   // Absolute path to a directory where generated file structure is written
   genDir: string;
@@ -46,10 +48,13 @@ export interface AngularCompilerOptions {
 
   // Lookup angular's symbols using the old angular2/... npm namespace.
   legacyPackageLayout: boolean;
+
+  // Print extra information while running the compiler
+  trace: boolean;
 }
 
 export class CodeGenerator {
-  constructor(private ngOptions: AngularCompilerOptions, private basePath: string,
+  constructor(private options: ts.CompilerOptions, private ngOptions: AngularCompilerOptions,
               private program: ts.Program, public host: ts.CompilerHost,
               private staticReflector: StaticReflector, private resolver: CompileMetadataResolver,
               private compiler: compiler.OfflineCompiler,
@@ -91,16 +96,29 @@ export class CodeGenerator {
     return result;
   }
 
+  // Write codegen in a directory structure matching the sources.
+  private calculateEmitPath(filePath: string) {
+    let root = this.ngOptions.basePath;
+    for (let eachRootDir of this.options.rootDirs || []) {
+      if (this.ngOptions.trace) {
+        console.log(
+            `Check if ${filePath} is under rootDirs element ${eachRootDir}`);
+      }
+      if (path.relative(eachRootDir, filePath).indexOf('.') !== 0) {
+        root = eachRootDir;
+      }
+    }
+
+    return path.join(this.ngOptions.genDir, path.relative(root, filePath));
+  }
+
   // TODO(tbosch): add a cache for shared css files
   // TODO(tbosch): detect cycles!
   private generateStylesheet(filepath: string, shim: boolean): Promise<any> {
     return this.compiler.loadAndCompileStylesheet(filepath, shim, '.ts')
         .then((sourceWithImports) => {
-          // Write codegen in a directory structure matching the sources.
-          // TODO(alexeagle): relativize paths by the rootDirs option
-          const emitPath =
-              path.join(this.ngOptions.genDir,
-                        path.relative(this.basePath, sourceWithImports.source.moduleUrl));
+          const emitPath = this.calculateEmitPath(sourceWithImports.source.moduleUrl);
+          // TODO(alexeagle): should include the sourceFile to the WriteFileCallback
           this.host.writeFile(emitPath, PREAMBLE + sourceWithImports.source.source, false);
           return Promise.all(
               sourceWithImports.importedUrls.map(url => this.generateStylesheet(url, shim)));
@@ -128,11 +146,7 @@ export class CodeGenerator {
               });
               const generated = this.generateSource(metadatas);
               const sourceFile = this.program.getSourceFile(absSourcePath);
-
-              // Write codegen in a directory structure matching the sources.
-              // TODO(alexeagle): relativize paths by the rootDirs option
-              const emitPath = path.join(this.ngOptions.genDir,
-                                         path.relative(this.basePath, generated.moduleUrl));
+              const emitPath = this.calculateEmitPath(generated.moduleUrl);
               this.host.writeFile(emitPath, PREAMBLE + generated.source, false, () => {},
                                   [sourceFile]);
               return Promise.all(stylesheetPromises);
@@ -161,7 +175,7 @@ export class CodeGenerator {
         new compiler.DirectiveResolver(staticReflector), new compiler.PipeResolver(staticReflector),
         new compiler.ViewResolver(staticReflector), null, null, staticReflector);
 
-    return new CodeGenerator(ngOptions, ngOptions.basePath, program, compilerHost, staticReflector,
-                             resolver, offlineCompiler, reflectorHost);
+    return new CodeGenerator(options, ngOptions, program, compilerHost,
+                             staticReflector, resolver, offlineCompiler, reflectorHost);
   }
 }
diff --git a/tools/compiler_cli/src/main.ts b/tools/compiler_cli/src/main.ts
index 1934be926a..99915411ff 100644
--- a/tools/compiler_cli/src/main.ts
+++ b/tools/compiler_cli/src/main.ts
@@ -42,10 +42,9 @@ export function main(project: string, basePath?: string): Promise<any> {
     const errors = program.getOptionsDiagnostics();
     check(errors);
 
-    const doCodegen =
-        ngOptions.skipTemplateCodegen ?
-            Promise.resolve(null) :
-            CodeGenerator.create(ngOptions, program, parsed.options, host).codegen();
+    const doCodegen = ngOptions.skipTemplateCodegen ?
+                          Promise.resolve(null) :
+                          CodeGenerator.create(ngOptions, program, parsed.options, host).codegen();
 
     return doCodegen.then(() => {
       tsc.typeCheck(host, program);
diff --git a/tools/compiler_cli/src/reflector_host.ts b/tools/compiler_cli/src/reflector_host.ts
index d5bfc8a6dd..c4bd6e19db 100644
--- a/tools/compiler_cli/src/reflector_host.ts
+++ b/tools/compiler_cli/src/reflector_host.ts
@@ -59,6 +59,9 @@ export class NodeReflectorHost implements StaticReflectorHost, ImportGenerator {
     // TODO(tbosch): if a file does not yet exist (because we compile it later),
     // we still need to create it so that the `resolve` method works!
     if (!this.compilerHost.fileExists(importedFile)) {
+      if (this.ngOptions.trace) {
+        console.log(`Generating empty file ${importedFile} to allow resolution of import`);
+      }
       this.compilerHost.writeFile(importedFile, '', false);
       fs.writeFileSync(importedFile, '');
     }