diff --git a/version.sh b/version.sh
index 39bef80af1..5b5f451534 100755
--- a/version.sh
+++ b/version.sh
@@ -26,7 +26,7 @@ fi
 test $revision || revision=UNKNOWN
 
 # releases extract the version number from the VERSION file
-version=$(cat VERSION 2> /dev/null)
+version=$(cd "$1" && cat VERSION 2> /dev/null)
 test $version || version=$revision
 
 test -n "$3" && version=$version-$3