diff --git a/packages/compat/src/compat-app-builder.ts b/packages/compat/src/compat-app-builder.ts
index 15f5c2cb1..a13799f7b 100644
--- a/packages/compat/src/compat-app-builder.ts
+++ b/packages/compat/src/compat-app-builder.ts
@@ -641,7 +641,16 @@ export class CompatAppBuilder {
       if (!child.isEngine()) {
         this.findActiveAddons(child, engine, true);
       }
-      engine.addons.set(child, resolvePath(pkg.root, 'package.json'));
+      let canResolveFrom: string;
+      if (pkg === this.appPackageWithMovedDeps) {
+        // we want canResolveFrom to always be a rewritten package path, and our
+        // app's package is not rewritten yet here.
+        canResolveFrom = resolvePath(this.root, 'package.json');
+      } else {
+        // whereas our addons are already moved
+        canResolveFrom = resolvePath(pkg.root, 'package.json');
+      }
+      engine.addons.set(child, canResolveFrom);
     }
     // ensure addons are applied in the correct order, if set (via @embroider/compat/v1-addon)
     if (!isChild) {