diff --git a/internal/io/io.go b/internal/io/io.go
index 6812410d5..701fb8a39 100644
--- a/internal/io/io.go
+++ b/internal/io/io.go
@@ -135,6 +135,8 @@ func WalkFiles(root string, f func(path string) error) error {
 	})
 }
 
+// FindManifestLocations walks the file system rooted at root, and returns the
+// *relative* paths of directories containing a .manifest file.
 func FindManifestLocations(root string) ([]string, error) {
 	var foundBundleRoots []string
 
diff --git a/pkg/config/config.go b/pkg/config/config.go
index b4ab90936..3b4f68776 100644
--- a/pkg/config/config.go
+++ b/pkg/config/config.go
@@ -219,12 +219,6 @@ func FindBundleRootDirectories(path string) ([]string, error) {
 			foundBundleRoots = append(foundBundleRoots, roots...)
 		}
 
-		// rather than calling rio.FindManifestLocations later, let's
-		// check for .manifest directories as part of the same walk
-		if !info.IsDir() && info.Name() == ".manifest" {
-			foundBundleRoots = append(foundBundleRoots, filepath.Dir(path))
-		}
-
 		return nil
 	}); err != nil {
 		return nil, fmt.Errorf("failed to walk path: %w", err)
@@ -268,6 +262,13 @@ func rootsFromRegalDirectory(regalDir *os.File) ([]string, error) {
 		foundBundleRoots = append(foundBundleRoots, customRulesDir)
 	}
 
+	manifestRoots, err := rio.FindManifestLocations(filepath.Dir(regalDir.Name()))
+	if err != nil {
+		return nil, fmt.Errorf("failed while looking for manifest locations: %w", err)
+	}
+
+	foundBundleRoots = append(foundBundleRoots, util.Map(util.FilepathJoiner(parent), manifestRoots)...)
+
 	return foundBundleRoots, nil
 }