diff --git a/Changelog.md b/Changelog.md
index 09300833e..9ead22a5b 100644
--- a/Changelog.md
+++ b/Changelog.md
@@ -7,6 +7,8 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ## [Unreleased]
 
+* Add basic support for implicit namespaces [#1645](https://github.com/PyO3/maturin/pull/1696)
+
 ## [1.1.0] - 2023-06-10
 
 * Add basic support for GraalPy in [#1645](https://github.com/PyO3/maturin/pull/1645)
@@ -152,7 +154,7 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 * **Breaking Change**: Remove support for specifying python package metadata in `Cargo.toml` in [#1200](https://github.com/PyO3/maturin/pull/1200).
   Python package metadata should be specified in the `project` section of `pyproject.toml` instead as [PEP 621](https://peps.python.org/pep-0621/) specifies.
-* Initial support for shipping bin targets as wasm32-wasi binaries that are run through wasmtime in [#1107](https://github.com/PyO3/maturin/pull/1107). 
+* Initial support for shipping bin targets as wasm32-wasi binaries that are run through wasmtime in [#1107](https://github.com/PyO3/maturin/pull/1107).
   Note that wasmtime currently only support the five most popular platforms and that wasi binaries have restrictions when interacting with the host.
   Usage is by setting `--target wasm32-wasi`.
 * Add support for python first [`src` project layout](https://py-pkgs.org/04-package-structure.html#the-source-layout) in [#1185](https://github.com/PyO3/maturin/pull/1185)
diff --git a/src/project_layout.rs b/src/project_layout.rs
index 5bcd6312f..1469cbd7f 100644
--- a/src/project_layout.rs
+++ b/src/project_layout.rs
@@ -387,12 +387,6 @@ impl ProjectLayout {
         };
 
         if python_module.is_dir() {
-            if !python_module.join("__init__.py").is_file()
-                && !python_module.join("__init__.pyi").is_file()
-            {
-                bail!("Found a directory with the module name ({}) next to Cargo.toml, which indicates a mixed python/rust project, but the directory didn't contain an __init__.py file.", module_name)
-            }
-
             eprintln!("🍹 Building a mixed python/rust project");
 
             Ok(ProjectLayout {
diff --git a/test-crates/pyo3-mixed-implicit/Cargo.toml b/test-crates/pyo3-mixed-implicit/Cargo.toml
new file mode 100644
index 000000000..fb22b7487
--- /dev/null
+++ b/test-crates/pyo3-mixed-implicit/Cargo.toml
@@ -0,0 +1,14 @@
+[package]
+authors = ["Kevin Patterson <kevin.r.patterson@intel.com>"]
+name = "pyo3-mixed-implicit"
+version = "2.1.3"
+description = "Implements a dummy function combining rust and python"
+readme = "README.md"
+edition = "2021"
+
+[dependencies]
+pyo3 = { version = "0.19.0", features = ["extension-module"] }
+
+[lib]
+name = "pyo3_mixed_implicit"
+crate-type = ["cdylib"]
diff --git a/test-crates/pyo3-mixed-implicit/README.md b/test-crates/pyo3-mixed-implicit/README.md
new file mode 100644
index 000000000..3eec24982
--- /dev/null
+++ b/test-crates/pyo3-mixed-implicit/README.md
@@ -0,0 +1,30 @@
+# pyo3-mixed-implicit
+
+A package for testing maturin with a mixed pyo3/python project with an implicit namespace package and Rust submodule.
+
+## Usage
+
+```bash
+pip install .
+```
+
+```python
+import pyo3_mixed_implicit
+assert pyo3_mixed_implicit.some_rust.get_22() == 22
+```
+
+## Testing
+
+Install tox:
+
+```bash
+pip install tox
+```
+
+Run it:
+
+```bash
+tox
+```
+
+The tests are in `tests/test_pyo3_mixed_implicit.py`, while the configuration is in tox.ini
diff --git a/test-crates/pyo3-mixed-implicit/check_installed/check_installed.py b/test-crates/pyo3-mixed-implicit/check_installed/check_installed.py
new file mode 100644
index 000000000..a3b2ddcaf
--- /dev/null
+++ b/test-crates/pyo3-mixed-implicit/check_installed/check_installed.py
@@ -0,0 +1,8 @@
+#!/usr/bin/env python3
+
+import pyo3_mixed_implicit.some_rust as some_rust
+
+assert some_rust.get_22() == 22
+assert some_rust.double(lambda: 4) == 8
+
+print("SUCCESS")
diff --git a/test-crates/pyo3-mixed-implicit/pyproject.toml b/test-crates/pyo3-mixed-implicit/pyproject.toml
new file mode 100644
index 000000000..f452a6edc
--- /dev/null
+++ b/test-crates/pyo3-mixed-implicit/pyproject.toml
@@ -0,0 +1,16 @@
+[build-system]
+requires = ["maturin>=0.15,<0.16"]
+build-backend = "maturin"
+
+[project]
+name = "pyo3_mixed_implicit.some_rust"
+classifiers = [
+    "Programming Language :: Python",
+    "Programming Language :: Rust"
+]
+
+[tool.maturin]
+features = ["pyo3/extension-module"]
+module-name = "pyo3_mixed_implicit.some_rust.rust"
+python-source = "pysrc"
+
diff --git a/test-crates/pyo3-mixed-implicit/pysrc/pyo3_mixed_implicit/some_rust/__init__.py b/test-crates/pyo3-mixed-implicit/pysrc/pyo3_mixed_implicit/some_rust/__init__.py
new file mode 100644
index 000000000..21b0c5d6c
--- /dev/null
+++ b/test-crates/pyo3-mixed-implicit/pysrc/pyo3_mixed_implicit/some_rust/__init__.py
@@ -0,0 +1,4 @@
+from .rust import get_22
+from .double import double
+
+__all__ = ["get_22", "double"]
diff --git a/test-crates/pyo3-mixed-implicit/pysrc/pyo3_mixed_implicit/some_rust/double.py b/test-crates/pyo3-mixed-implicit/pysrc/pyo3_mixed_implicit/some_rust/double.py
new file mode 100644
index 000000000..2eed18d52
--- /dev/null
+++ b/test-crates/pyo3-mixed-implicit/pysrc/pyo3_mixed_implicit/some_rust/double.py
@@ -0,0 +1,5 @@
+from typing import Callable
+
+
+def double(fn: Callable[[], int]) -> int:
+    return 2 * fn()
diff --git a/test-crates/pyo3-mixed-implicit/src/lib.rs b/test-crates/pyo3-mixed-implicit/src/lib.rs
new file mode 100644
index 000000000..0c5711a3b
--- /dev/null
+++ b/test-crates/pyo3-mixed-implicit/src/lib.rs
@@ -0,0 +1,13 @@
+use pyo3::prelude::*;
+
+#[pyfunction]
+fn get_22() -> usize {
+    22
+}
+
+#[pymodule]
+fn rust(_py: Python, m: &PyModule) -> PyResult<()> {
+    m.add_wrapped(wrap_pyfunction!(get_22))?;
+
+    Ok(())
+}
diff --git a/test-crates/pyo3-mixed-implicit/tests/test_pyo3_mixed_implicit.py b/test-crates/pyo3-mixed-implicit/tests/test_pyo3_mixed_implicit.py
new file mode 100644
index 000000000..1be6c8549
--- /dev/null
+++ b/test-crates/pyo3-mixed-implicit/tests/test_pyo3_mixed_implicit.py
@@ -0,0 +1,11 @@
+#!/usr/bin/env python3
+
+import pyo3_mixed_implicit.some_rust as some_rust
+
+
+def test_get_rust_and_python():
+    assert some_rust.get_22() == 22
+    assert some_rust.double(lambda: 4) == 8
+
+
+print("SUCCESS")
diff --git a/test-crates/pyo3-mixed-implicit/tox.ini b/test-crates/pyo3-mixed-implicit/tox.ini
new file mode 100644
index 000000000..421774193
--- /dev/null
+++ b/test-crates/pyo3-mixed-implicit/tox.ini
@@ -0,0 +1,7 @@
+[tox]
+envlist = py36,py37,py38
+isolated_build = True
+
+[testenv]
+deps = pytest
+commands = pytest tests/
diff --git a/test-dockerfile.sh b/test-dockerfile.sh
index b0d79780d..d6613be41 100755
--- a/test-dockerfile.sh
+++ b/test-dockerfile.sh
@@ -11,7 +11,7 @@ venv-docker/bin/pip install -U pip cffi
 # FIXME: Can we run the tests without activate? Currently hello-world fails because then the binary is not in PATH
 source venv-docker/bin/activate
 
-for test_crate in hello-world cffi-pure cffi-mixed pyo3-pure pyo3-mixed pyo3-mixed-submodule
+for test_crate in hello-world cffi-pure cffi-mixed pyo3-pure pyo3-mixed pyo3-mixed-submodule pyo3-mixed-implicit
 do
   echo "Testing $test_crate"
   docker run -e RUST_BACKTRACE=1 --rm -v "$(pwd):/io" -w /io/test-crates/$test_crate maturin build -i python3.11
diff --git a/tests/run.rs b/tests/run.rs
index 06790c0c0..c0c105a89 100644
--- a/tests/run.rs
+++ b/tests/run.rs
@@ -67,6 +67,16 @@ fn develop_pyo3_mixed_submodule() {
     ));
 }
 
+#[test]
+fn develop_pyo3_mixed_implicit() {
+    handle_result(develop::test_develop(
+        "test-crates/pyo3-mixed-implicit",
+        None,
+        "develop-pyo3-mixed-implicit",
+        false,
+    ));
+}
+
 #[test]
 fn develop_pyo3_mixed_py_subdir() {
     handle_result(develop::test_develop(
@@ -216,6 +226,17 @@ fn integration_pyo3_mixed_submodule() {
     ));
 }
 
+#[test]
+fn integration_pyo3_mixed_implicit() {
+    handle_result(integration::test_integration(
+        "test-crates/pyo3-mixed-implicit",
+        None,
+        "integration-pyo3-mixed-implicit",
+        false,
+        None,
+    ));
+}
+
 #[test]
 fn integration_pyo3_mixed_py_subdir() {
     handle_result(integration::test_integration(