diff --git a/src/bin/cargo/commands/vendor.rs b/src/bin/cargo/commands/vendor.rs
index 3f9c2dcaf3e..68a91b43287 100644
--- a/src/bin/cargo/commands/vendor.rs
+++ b/src/bin/cargo/commands/vendor.rs
@@ -32,6 +32,7 @@ pub fn cli() -> Command {
             "versioned-dirs",
             "Always include version in subdir name",
         ))
+        .arg(flag("include-path-deps", "Include path dependencies"))
         .arg(unsupported("no-merge-sources"))
         .arg(unsupported("relative-path"))
         .arg(unsupported("only-git-deps"))
@@ -75,6 +76,7 @@ pub fn exec(config: &mut Config, args: &ArgMatches) -> CliResult {
             no_delete: args.flag("no-delete"),
             destination: &path,
             versioned_dirs: args.flag("versioned-dirs"),
+            include_path_deps: args.flag("include-path-deps"),
             extra: args
                 .get_many::<PathBuf>("tomls")
                 .unwrap_or_default()
diff --git a/src/cargo/ops/vendor.rs b/src/cargo/ops/vendor.rs
index 3ee46db3284..0555377ff10 100644
--- a/src/cargo/ops/vendor.rs
+++ b/src/cargo/ops/vendor.rs
@@ -18,6 +18,7 @@ use std::path::{Path, PathBuf};
 pub struct VendorOptions<'a> {
     pub no_delete: bool,
     pub versioned_dirs: bool,
+    pub include_path_deps: bool,
     pub destination: &'a Path,
     pub extra: Vec<PathBuf>,
 }
@@ -62,6 +63,8 @@ struct VendorConfig {
 enum VendorSource {
     Directory {
         directory: String,
+        #[serde(rename = "replace-with", skip_serializing_if = "Option::is_none")]
+        replace_with: Option<String>,
     },
     Registry {
         registry: Option<String>,
@@ -153,12 +156,21 @@ fn sync(
             .get_many(resolve.iter())
             .with_context(|| "failed to download packages")?;
 
+        let current = ws
+            .current()
+            .with_context(|| "using virtual manifest in workspace")?
+            .package_id();
         for pkg in resolve.iter() {
-            // No need to vendor path crates since they're already in the
-            // repository
-            if pkg.source_id().is_path() {
+            // Since the target crate itself is also part of the packages,
+            // make sure we skip it.
+            if pkg == current {
+                continue;
+            }
+
+            if pkg.source_id().is_path() && !opts.include_path_deps {
                 continue;
             }
+
             ids.insert(
                 pkg,
                 packages
@@ -291,6 +303,11 @@ fn sync(
                 rev,
                 replace_with: merged_source_name.to_string(),
             }
+        } else if source_id.is_path() && opts.include_path_deps {
+            VendorSource::Directory {
+                directory: source_id.url().to_string(),
+                replace_with: Some(merged_source_name.to_string()),
+            }
         } else {
             panic!("Invalid source ID: {}", source_id)
         };
@@ -305,6 +322,7 @@ fn sync(
                 // This backslash normalization is for making output paths more
                 // cross-platform compatible.
                 directory: opts.destination.to_string_lossy().replace("\\", "/"),
+                replace_with: None,
             },
         );
     } else if !dest_dir_already_exists {
diff --git a/tests/testsuite/cargo_vendor/help/stdout.log b/tests/testsuite/cargo_vendor/help/stdout.log
index 7f37ab56edd..94f212967f5 100644
--- a/tests/testsuite/cargo_vendor/help/stdout.log
+++ b/tests/testsuite/cargo_vendor/help/stdout.log
@@ -10,6 +10,7 @@ Options:
   -s, --sync <TOML>            Additional `Cargo.toml` to sync and vendor
       --respect-source-config  Respect `[source]` config in `.cargo/config`
       --versioned-dirs         Always include version in subdir name
+      --include-path-deps      Include path dependencies
   -q, --quiet                  Do not print cargo log messages
   -v, --verbose...             Use verbose output (-vv very verbose/build.rs output)
       --color <WHEN>           Coloring: auto, always, never
diff --git a/tests/testsuite/vendor.rs b/tests/testsuite/vendor.rs
index 2b8b090c2e6..d1956bfbed2 100644
--- a/tests/testsuite/vendor.rs
+++ b/tests/testsuite/vendor.rs
@@ -1024,6 +1024,40 @@ fn git_crlf_preservation() {
     assert_eq!(input, output);
 }
 
+#[cargo_test]
+fn path_deps() {
+    let p = project()
+        .file(
+            "bar/Cargo.toml",
+            r#"
+                [package]
+                name = "bar"
+                version = "0.1.0"
+			"#,
+        )
+        .file("bar/src/lib.rs", "")
+        .file(
+            "Cargo.toml",
+            r#"
+                [package]
+                name = "foo"
+                version = "0.1.0"
+
+                [dependencies]
+                bar = { path = "bar" }
+            "#,
+        )
+        .file("src/lib.rs", "")
+        .build();
+
+    p.cargo("vendor --respect-source-config").run();
+    assert!(!p.root().join("vendor/bar").is_dir());
+
+    p.cargo("vendor --respect-source-config --include-path-deps")
+        .run();
+    assert!(p.root().join("vendor/bar").is_dir());
+}
+
 #[cargo_test]
 #[cfg(unix)]
 fn vendor_preserves_permissions() {