diff --git a/src/docs/changes/README.md b/src/docs/changes/README.md
index 596e168ac..16434a1b8 100644
--- a/src/docs/changes/README.md
+++ b/src/docs/changes/README.md
@@ -1,4 +1,7 @@
 # Change Log
+## v7.1.3 (unreleased)
+* The GroovyExtensionModuleTransformer now also works for Groovy 2.5+.
+
 ## v7.1.2 (2021-12-28)
 * Upgrade log4j to 2.17.1 due to CVE-2021-45105 and CVE-2021-44832
 
diff --git a/src/main/groovy/com/github/jengelman/gradle/plugins/shadow/transformers/GroovyExtensionModuleTransformer.groovy b/src/main/groovy/com/github/jengelman/gradle/plugins/shadow/transformers/GroovyExtensionModuleTransformer.groovy
index 5d814bb39..62255f3df 100644
--- a/src/main/groovy/com/github/jengelman/gradle/plugins/shadow/transformers/GroovyExtensionModuleTransformer.groovy
+++ b/src/main/groovy/com/github/jengelman/gradle/plugins/shadow/transformers/GroovyExtensionModuleTransformer.groovy
@@ -27,16 +27,25 @@ import org.gradle.api.file.FileTreeElement
 /**
  * Modified from eu.appsatori.gradle.fatjar.tasks.PrepareFiles.groovy
  * <p>
- * Resource transformer that merges Groovy extension module descriptor files into a single file. If there are several
- * META-INF/services/org.codehaus.groovy.runtime.ExtensionModule resources spread across many JARs the individual
- * entries will all be merged into a single META-INF/services/org.codehaus.groovy.runtime.ExtensionModule resource
+ * Resource transformer that merges Groovy extension module descriptor files into a single file.
+ * Groovy extension module descriptor files have the name org.codehaus.groovy.runtime.ExtensionModule
+ * and live in the META-INF/services (Groovy up to 2.4) or META-INF/groovy (Groovy 2.5+) directory.
+ * See https://issues.apache.org/jira/browse/GROOVY-8480 for more details of the change.
+ *
+ * If there are several descriptor files spread across many JARs the individual
+ * entries will be merged into a single descriptor file which will be
  * packaged into the resultant JAR produced by the shadowing process.
+ * It will live in the legacy directory (META-INF/services) if all of the processed descriptor
+ * files came from the legacy location, otherwise it will be written into the now standard location (META-INF/groovy).
+ * Note that certain JDK9+ tooling will break when using the legacy location.
  */
 @CacheableTransformer
 class GroovyExtensionModuleTransformer implements Transformer {
 
-    private static final GROOVY_EXTENSION_MODULE_DESCRIPTOR_PATH =
+    private static final GROOVY_LEGACY_EXTENSION_MODULE_DESCRIPTOR_PATH =
             "META-INF/services/org.codehaus.groovy.runtime.ExtensionModule"
+    private static final GROOVY_EXTENSION_MODULE_DESCRIPTOR_PATH =
+            "META-INF/groovy/org.codehaus.groovy.runtime.ExtensionModule"
 
     private static final MODULE_NAME_KEY = 'moduleName'
     private static final MODULE_VERSION_KEY = 'moduleVersion'
@@ -47,10 +56,16 @@ class GroovyExtensionModuleTransformer implements Transformer {
     private static final MERGED_MODULE_VERSION = '1.0.0'
 
     private final Properties module = new Properties()
+    private boolean legacy = true // default to Groovy 2.4 or earlier
 
     @Override
     boolean canTransformResource(FileTreeElement element) {
-        return element.relativePath.pathString == GROOVY_EXTENSION_MODULE_DESCRIPTOR_PATH
+        def path = element.relativePath.pathString
+        if (path == GROOVY_EXTENSION_MODULE_DESCRIPTOR_PATH) {
+            legacy = false // Groovy 2.5+
+            return true
+        }
+        return path == GROOVY_LEGACY_EXTENSION_MODULE_DESCRIPTOR_PATH
     }
 
     @Override
@@ -95,7 +110,7 @@ class GroovyExtensionModuleTransformer implements Transformer {
 
     @Override
     void modifyOutputStream(ZipOutputStream os, boolean preserveFileTimestamps) {
-        ZipEntry entry = new ZipEntry(GROOVY_EXTENSION_MODULE_DESCRIPTOR_PATH)
+        ZipEntry entry = new ZipEntry(legacy ? GROOVY_LEGACY_EXTENSION_MODULE_DESCRIPTOR_PATH : GROOVY_EXTENSION_MODULE_DESCRIPTOR_PATH)
         entry.time = TransformerContext.getEntryTimestamp(preserveFileTimestamps, entry.time)
         os.putNextEntry(entry)
         IOUtil.copy(toInputStream(module), os)
diff --git a/src/test/groovy/com/github/jengelman/gradle/plugins/shadow/TransformerSpec.groovy b/src/test/groovy/com/github/jengelman/gradle/plugins/shadow/TransformerSpec.groovy
index 244e142df..77dcc5a01 100644
--- a/src/test/groovy/com/github/jengelman/gradle/plugins/shadow/TransformerSpec.groovy
+++ b/src/test/groovy/com/github/jengelman/gradle/plugins/shadow/TransformerSpec.groovy
@@ -643,6 +643,51 @@ staticExtensionClasses=com.acme.bar.SomeStaticExtension'''.stripIndent()).write(
             assert props.getProperty('staticExtensionClasses') == 'com.acme.foo.FooStaticExtension,com.acme.bar.SomeStaticExtension'
     }
 
+    def 'Groovy extension module transformer works for Groovy2_5+'() {
+        given:
+            def one = buildJar('one.jar')
+                    .insertFile('META-INF/groovy/org.codehaus.groovy.runtime.ExtensionModule',
+'''moduleName=foo
+moduleVersion=1.0.5
+extensionClasses=com.acme.foo.FooExtension,com.acme.foo.BarExtension
+staticExtensionClasses=com.acme.foo.FooStaticExtension'''.stripIndent()).write()
+
+            def two = buildJar('two.jar')
+                    .insertFile('META-INF/services/org.codehaus.groovy.runtime.ExtensionModule',
+'''moduleName=bar
+moduleVersion=2.3.5
+extensionClasses=com.acme.bar.SomeExtension,com.acme.bar.AnotherExtension
+staticExtensionClasses=com.acme.bar.SomeStaticExtension'''.stripIndent()).write()
+
+            buildFile << """
+                import ${GroovyExtensionModuleTransformer.name}
+                shadowJar {
+                    from('${escapedPath(one)}')
+                    from('${escapedPath(two)}')
+                }
+
+                shadowJar {
+                    transform(GroovyExtensionModuleTransformer)
+                }
+            """.stripIndent()
+
+        when:
+            run('shadowJar')
+
+        then:
+            output.exists()
+
+        and:
+            def text = getJarFileContents(output, 'META-INF/groovy/org.codehaus.groovy.runtime.ExtensionModule')
+            def props = new Properties()
+            props.load(new StringReader(text))
+            props.getProperty('moduleName') == 'MergedByShadowJar'
+            props.getProperty('moduleVersion') == '1.0.0'
+            props.getProperty('extensionClasses') == 'com.acme.foo.FooExtension,com.acme.foo.BarExtension,com.acme.bar.SomeExtension,com.acme.bar.AnotherExtension'
+            props.getProperty('staticExtensionClasses') == 'com.acme.foo.FooStaticExtension,com.acme.bar.SomeStaticExtension'
+            doesNotContain(output, ['META-INF/services/org.codehaus.groovy.runtime.ExtensionModule'])
+    }
+
     def 'Groovy extension module transformer short syntax'() {
         given:
             def one = buildJar('one.jar')