diff --git a/terraform/context_apply_test.go b/terraform/context_apply_test.go
index 2f4d43296..96dd8ad5c 100644
--- a/terraform/context_apply_test.go
+++ b/terraform/context_apply_test.go
@@ -2097,6 +2097,54 @@ func TestContext2Apply_destroy(t *testing.T) {
 	}
 }
 
+func TestContext2Apply_destroyNestedModule(t *testing.T) {
+	m := testModule(t, "apply-destroy-nested-module")
+	p := testProvider("aws")
+	p.ApplyFn = testApplyFn
+	p.DiffFn = testDiffFn
+
+	s := &State{
+		Modules: []*ModuleState{
+			&ModuleState{
+				Path: []string{"root", "child", "subchild"},
+				Resources: map[string]*ResourceState{
+					"aws_instance.bar": &ResourceState{
+						Type: "aws_instance",
+						Primary: &InstanceState{
+							ID: "bar",
+						},
+					},
+				},
+			},
+		},
+	}
+
+	ctx := testContext2(t, &ContextOpts{
+		Module: m,
+		Providers: map[string]ResourceProviderFactory{
+			"aws": testProviderFuncFixed(p),
+		},
+		State: s,
+	})
+
+	// First plan and apply a create operation
+	if _, err := ctx.Plan(); err != nil {
+		t.Fatalf("err: %s", err)
+	}
+
+	state, err := ctx.Apply()
+	if err != nil {
+		t.Fatalf("err: %s", err)
+	}
+
+	// Test that things were destroyed
+	actual := strings.TrimSpace(state.String())
+	expected := strings.TrimSpace(testTerraformApplyDestroyNestedModuleStr)
+	if actual != expected {
+		t.Fatalf("bad: \n%s", actual)
+	}
+}
+
 func TestContext2Apply_destroyOutputs(t *testing.T) {
 	m := testModule(t, "apply-destroy-outputs")
 	h := new(HookRecordApplyOrder)
diff --git a/terraform/terraform_test.go b/terraform/terraform_test.go
index 59dad38d4..c84e9803c 100644
--- a/terraform/terraform_test.go
+++ b/terraform/terraform_test.go
@@ -483,6 +483,11 @@ const testTerraformApplyDestroyStr = `
 <no state>
 `
 
+const testTerraformApplyDestroyNestedModuleStr = `
+module.child.subchild:
+  <no state>
+`
+
 const testTerraformApplyErrorStr = `
 aws_instance.bar:
   ID = bar
diff --git a/terraform/test-fixtures/apply-destroy-nested-module/child/main.tf b/terraform/test-fixtures/apply-destroy-nested-module/child/main.tf
new file mode 100644
index 000000000..852bce8b9
--- /dev/null
+++ b/terraform/test-fixtures/apply-destroy-nested-module/child/main.tf
@@ -0,0 +1,3 @@
+module "subchild" {
+    source = "./subchild"
+}
diff --git a/terraform/test-fixtures/apply-destroy-nested-module/child/subchild/main.tf b/terraform/test-fixtures/apply-destroy-nested-module/child/subchild/main.tf
new file mode 100644
index 000000000..6ff716a4d
--- /dev/null
+++ b/terraform/test-fixtures/apply-destroy-nested-module/child/subchild/main.tf
@@ -0,0 +1 @@
+resource "aws_instance" "bar" {}
diff --git a/terraform/test-fixtures/apply-destroy-nested-module/main.tf b/terraform/test-fixtures/apply-destroy-nested-module/main.tf
new file mode 100644
index 000000000..8a5a1b2e5
--- /dev/null
+++ b/terraform/test-fixtures/apply-destroy-nested-module/main.tf
@@ -0,0 +1,5 @@
+/*
+module "child" {
+    source = "./child"
+}
+*/
diff --git a/terraform/transform_orphan.go b/terraform/transform_orphan.go
index 8e609f609..bb381c823 100644
--- a/terraform/transform_orphan.go
+++ b/terraform/transform_orphan.go
@@ -100,9 +100,14 @@ func (t *OrphanTransformer) Transform(g *Graph) error {
 	moduleOrphans := t.State.ModuleOrphans(g.Path, config)
 	moduleVertexes := make([]dag.Vertex, len(moduleOrphans))
 	for i, path := range moduleOrphans {
+		var deps []string
+		if s := t.State.ModuleByPath(path); s != nil {
+			deps = s.Dependencies
+		}
+
 		moduleVertexes[i] = g.Add(&graphNodeOrphanModule{
 			Path:        path,
-			dependentOn: t.State.ModuleByPath(path).Dependencies,
+			dependentOn: deps,
 		})
 	}
 
@@ -356,3 +361,9 @@ func (n *graphNodeOrphanResourceFlat) CreateBeforeDestroy() bool {
 func (n *graphNodeOrphanResourceFlat) CreateNode() dag.Vertex {
 	return n
 }
+
+func (n *graphNodeOrphanResourceFlat) ProvidedBy() []string {
+	return modulePrefixList(
+		n.graphNodeOrphanResource.ProvidedBy(),
+		modulePrefixStr(n.PathValue))
+}