diff --git a/cabal-install/src/Distribution/Client/CmdBuild.hs b/cabal-install/src/Distribution/Client/CmdBuild.hs
index a9cf6c27227..e3b1f4459a8 100644
--- a/cabal-install/src/Distribution/Client/CmdBuild.hs
+++ b/cabal-install/src/Distribution/Client/CmdBuild.hs
@@ -33,7 +33,7 @@ import Distribution.Verbosity
 import Distribution.Simple.Utils
          ( wrapText, die' )
 import Distribution.Client.ScriptUtils
-         ( AcceptNoTargets(..), withContextAndSelectors, updateAndPersistScriptContext, TargetContext(..) )
+         ( AcceptNoTargets(..), withContextAndSelectors, updateContextAndWriteProjectFile, TargetContext(..) )
 
 import qualified Data.Map as Map
 
@@ -98,7 +98,7 @@ defaultBuildFlags = BuildFlags
 --
 buildAction :: NixStyleFlags BuildFlags -> [String] -> GlobalFlags -> IO ()
 buildAction flags@NixStyleFlags { extraFlags = buildFlags, ..} targetStrings globalFlags
-  = withContextAndSelectors RejectNoTargets "" Nothing flags targetStrings globalFlags $ \targetCtx ctx targetSelectors -> do
+  = withContextAndSelectors RejectNoTargets Nothing flags targetStrings globalFlags $ \targetCtx ctx targetSelectors -> do
     -- TODO: This flags defaults business is ugly
     let onlyConfigure = fromFlag (buildOnlyConfigure defaultBuildFlags
                                  <> buildOnlyConfigure buildFlags)
@@ -107,9 +107,9 @@ buildAction flags@NixStyleFlags { extraFlags = buildFlags, ..} targetStrings glo
             | otherwise = TargetActionBuild
 
     baseCtx <- case targetCtx of
-      ProjectContext                      -> return ctx
-      GlobalContext                       -> return ctx
-      ScriptContext path exemeta contents -> updateAndPersistScriptContext ctx path exemeta contents
+      ProjectContext             -> return ctx
+      GlobalContext              -> return ctx
+      ScriptContext path exemeta -> updateContextAndWriteProjectFile ctx path exemeta
 
     buildCtx <-
       runProjectPreBuildPhase verbosity baseCtx $ \elaboratedPlan -> do
diff --git a/cabal-install/src/Distribution/Client/CmdRepl.hs b/cabal-install/src/Distribution/Client/CmdRepl.hs
index 9fb161f3819..a09750b3770 100644
--- a/cabal-install/src/Distribution/Client/CmdRepl.hs
+++ b/cabal-install/src/Distribution/Client/CmdRepl.hs
@@ -45,7 +45,8 @@ import Distribution.Client.ProjectPlanning.Types
        ( elabOrderExeDependencies )
 import Distribution.Client.ScriptUtils
          ( AcceptNoTargets(..), withContextAndSelectors, TargetContext(..)
-         , updateContextAndWriteProjectFile, fakeProjectSourcePackage, lSrcpkgDescription )
+         , updateContextAndWriteProjectFile, updateContextAndWriteProjectFile'
+         , fakeProjectSourcePackage, lSrcpkgDescription )
 import Distribution.Client.Setup
          ( GlobalFlags, ConfigFlags(..) )
 import qualified Distribution.Client.Setup as Client
@@ -77,8 +78,6 @@ import Distribution.Types.CondTree
          ( CondTree(..), traverseCondTreeC )
 import Distribution.Types.Dependency
          ( Dependency(..), mainLibSet )
-import Distribution.Types.Executable
-         ( Executable(..) )
 import Distribution.Types.Library
          ( Library(..), emptyLibrary )
 import Distribution.Types.Version
@@ -87,8 +86,6 @@ import Distribution.Types.VersionRange
          ( anyVersion )
 import Distribution.Utils.Generic
          ( safeHead )
-import Distribution.Utils.Path
-         ( unsafeMakeSymbolicPath )
 import Distribution.Verbosity
          ( normal, lessVerbose )
 import Distribution.Simple.Utils
@@ -101,9 +98,9 @@ import Data.List
 import qualified Data.Map as Map
 import qualified Data.Set as Set
 import System.Directory
-         ( getCurrentDirectory, doesFileExist, canonicalizePath)
+         ( doesFileExist, getCurrentDirectory )
 import System.FilePath
-         ( (</>), dropDrive, joinPath, splitPath, dropFileName, takeFileName )
+         ( (</>) )
 
 data EnvFlags = EnvFlags
   { envPackages :: [Dependency]
@@ -190,7 +187,7 @@ replCommand = Client.installCommand {
 --
 replAction :: NixStyleFlags (ReplOptions, EnvFlags) -> [String] -> GlobalFlags -> IO ()
 replAction flags@NixStyleFlags { extraFlags = (replFlags, envFlags), ..} targetStrings globalFlags
-  = withContextAndSelectors AcceptNoTargets "repl:" (Just LibKind) flags targetStrings globalFlags $ \targetCtx ctx targetSelectors -> do
+  = withContextAndSelectors AcceptNoTargets (Just LibKind) flags targetStrings globalFlags $ \targetCtx ctx targetSelectors -> do
     when (buildSettingOnlyDeps (buildSettings ctx)) $
       die' verbosity $ "The repl command does not support '--only-dependencies'. "
           ++ "You may wish to use 'build --only-dependencies' and then "
@@ -215,26 +212,15 @@ replAction flags@NixStyleFlags { extraFlags = (replFlags, envFlags), ..} targetS
             }
           baseDep = Dependency "base" anyVersion mainLibSet
 
-        (,) GlobalRepl <$> updateContextAndWriteProjectFile ctx sourcePackage
-      ScriptContext scriptPath scriptExecutable _ -> do
+        (,) GlobalRepl <$> updateContextAndWriteProjectFile' ctx sourcePackage
+      ScriptContext scriptPath scriptExecutable -> do
         unless (length targetStrings == 1) $
           die' verbosity $ "'repl' takes a single argument which should be a script: " ++ unwords targetStrings
         existsScriptPath <- doesFileExist scriptPath
         unless existsScriptPath $
           die' verbosity $ "'repl' takes a single argument which should be a script: " ++ unwords targetStrings
 
-        -- We want to use the script dir in hs-source-dirs, but hs-source-dirs wants a relpath from the projectRoot
-        -- and ghci also needs to be able to find that script from cwd using that relpath
-        backtoscript <- doublyRelativePath projectRoot (dropFileName scriptPath)
-        let
-          sourcePackage = fakeProjectSourcePackage projectRoot
-            & lSrcpkgDescription . L.condExecutables
-            .~ [("script", CondNode executable (targetBuildDepends $ buildInfo executable) [])]
-          executable = scriptExecutable
-            & L.modulePath   .~ takeFileName scriptPath
-            & L.hsSourceDirs .~ [unsafeMakeSymbolicPath backtoscript]
-
-        (,) GlobalRepl <$> updateContextAndWriteProjectFile ctx sourcePackage
+        (,) GlobalRepl <$> updateContextAndWriteProjectFile ctx scriptPath scriptExecutable
 
     (originalComponent, baseCtx') <- if null (envPackages envFlags)
       then return (Nothing, baseCtx)
@@ -357,20 +343,6 @@ data OriginalComponentInfo = OriginalComponentInfo
 data ReplType = ProjectRepl | GlobalRepl
   deriving (Show, Eq)
 
--- Workaround for hs-script-dirs not taking absolute paths.
--- Construct a path to b that is relative to both a and cwd.
-doublyRelativePath :: FilePath -> FilePath -> IO FilePath
-doublyRelativePath a b = do
-  cpa <- dropDrive <$> canonicalizePath a
-  cwd <- dropDrive <$> getCurrentDirectory
-  cpb <- dropDrive <$> canonicalizePath b
-  let cpaSegs = splitPath cpa
-      cwdSegs = splitPath cwd
-      -- Make sure we get all the way down to root from either a or b
-      toRoot = joinPath . map (const "..") $ if length cpaSegs > length cwdSegs then cpaSegs else cwdSegs
-  -- Climb down to b from root
-  return $ toRoot </> cpb
-
 addDepsToProjectTarget :: [Dependency]
                        -> PackageId
                        -> ProjectBaseContext
diff --git a/cabal-install/src/Distribution/Client/CmdRun.hs b/cabal-install/src/Distribution/Client/CmdRun.hs
index 693d8a898c0..4fb3823b435 100644
--- a/cabal-install/src/Distribution/Client/CmdRun.hs
+++ b/cabal-install/src/Distribution/Client/CmdRun.hs
@@ -61,7 +61,7 @@ import Distribution.Simple.Program.Run
 import Distribution.Types.UnitId
          ( UnitId )
 import Distribution.Client.ScriptUtils
-         ( AcceptNoTargets(..), withContextAndSelectors, updateAndPersistScriptContext, TargetContext(..) )
+         ( AcceptNoTargets(..), withContextAndSelectors, updateContextAndWriteProjectFile, TargetContext(..) )
 
 import qualified Data.Set as Set
 import System.Directory
@@ -119,11 +119,11 @@ runCommand = CommandUI
 --
 runAction :: NixStyleFlags () -> [String] -> GlobalFlags -> IO ()
 runAction flags@NixStyleFlags {..} targetStrings globalFlags
-  = withContextAndSelectors RejectNoTargets "" (Just ExeKind) flags targetStrings globalFlags $ \targetCtx ctx targetSelectors -> do
+  = withContextAndSelectors RejectNoTargets (Just ExeKind) flags targetStrings globalFlags $ \targetCtx ctx targetSelectors -> do
     baseCtx <- case targetCtx of
-      ProjectContext                      -> return ctx
-      GlobalContext                       -> return ctx
-      ScriptContext path exemeta contents -> updateAndPersistScriptContext ctx path exemeta contents
+      ProjectContext             -> return ctx
+      GlobalContext              -> return ctx
+      ScriptContext path exemeta -> updateContextAndWriteProjectFile ctx path exemeta
 
     buildCtx <-
       runProjectPreBuildPhase verbosity baseCtx $ \elaboratedPlan -> do
diff --git a/cabal-install/src/Distribution/Client/ScriptUtils.hs b/cabal-install/src/Distribution/Client/ScriptUtils.hs
index 91033ceca35..ed9a7857c35 100644
--- a/cabal-install/src/Distribution/Client/ScriptUtils.hs
+++ b/cabal-install/src/Distribution/Client/ScriptUtils.hs
@@ -8,7 +8,7 @@
 module Distribution.Client.ScriptUtils (
     getScriptCacheDirectoryRoot, getScriptHash, getScriptCacheDirectory, ensureScriptCacheDirectory,
     withContextAndSelectors, AcceptNoTargets(..), TargetContext(..),
-    updateContextAndWriteProjectFile, updateAndPersistScriptContext,
+    updateContextAndWriteProjectFile, updateContextAndWriteProjectFile',
     fakeProjectSourcePackage, lSrcpkgDescription
   ) where
 
@@ -72,6 +72,8 @@ import Distribution.Types.PackageDescription
     ( PackageDescription(..), emptyPackageDescription )
 import Distribution.Types.PackageName.Magic
     ( fakePackageId, fakePackageCabalFileName )
+import Distribution.Utils.Path
+    ( unsafeMakeSymbolicPath )
 import Language.Haskell.Extension
     ( Language(..) )
 import Distribution.Client.HashValue
@@ -87,9 +89,9 @@ import qualified Data.ByteString.Char8 as BS
 import Data.ByteString.Lazy ()
 import qualified Text.Parsec as P
 import System.Directory
-    ( getTemporaryDirectory, removeDirectoryRecursive, doesFileExist, canonicalizePath )
+    ( canonicalizePath, doesFileExist, getCurrentDirectory, getTemporaryDirectory, removeDirectoryRecursive )
 import System.FilePath
-    ( (</>), takeExtension )
+    ( (</>), dropDrive, dropFileName, joinPath, splitPath, takeFileName )
 
 
 -- | Get the directory where script builds are cached.
@@ -100,37 +102,27 @@ getScriptCacheDirectoryRoot = do
   cabalDir <- getCabalDir
   return $ cabalDir </> "script-builds"
 
--- | Get the hash of (@prefix@ ++ the script's absolute path)
+-- | Get the hash of a script's absolute path)
 --
--- Two hashes for the same @prefix@ will be the same whenever
--- the absolute path is the same. Two hashes with different
--- @prefix@ will always differ.
---
--- @prefix@ must not contain path separator characters because
--- it could cause unwanted collisions.
-getScriptHash :: String -> FilePath -> IO String
-getScriptHash prefix script
-  | '/' `notElem` prefix && '\\' `notElem` prefix = showHashValue . hashValue . fromString . (prefix ++) <$> canonicalizePath script
-  | otherwise                                     = error "getScriptHash: prefix must not contain '/' or '\\'"
+-- Two hashes will be the same as long as the absolute paths
+-- are the same.
+getScriptHash :: FilePath -> IO String
+getScriptHash script = showHashValue . hashValue . fromString <$> canonicalizePath script
 
 -- | Get the directory for caching a script build.
 --
 -- The only identity of a script is it's absolute path, so append the
 -- hashed path to @CABAL_DIR\/script-builds\/@ to get the cache directory.
---
--- @prefix@ must not contain path separator characters.
-getScriptCacheDirectory :: String -> FilePath -> IO FilePath
-getScriptCacheDirectory prefix script = (</>) <$> getScriptCacheDirectoryRoot <*> getScriptHash prefix script
+getScriptCacheDirectory :: FilePath -> IO FilePath
+getScriptCacheDirectory script = (</>) <$> getScriptCacheDirectoryRoot <*> getScriptHash script
 
 -- | Get the directory for caching a script build and ensure it exists.
 --
 -- The only identity of a script is it's absolute path, so append the
 -- hashed path to @CABAL_DIR\/script-builds\/@ to get the cache directory.
---
--- @prefix@ must not contain path separator characters.
-ensureScriptCacheDirectory :: Verbosity -> String -> FilePath -> IO FilePath
-ensureScriptCacheDirectory verbosity prefix script = do
-  cacheDir <- getScriptCacheDirectory prefix script
+ensureScriptCacheDirectory :: Verbosity -> FilePath -> IO FilePath
+ensureScriptCacheDirectory verbosity script = do
+  cacheDir <- getScriptCacheDirectory script
   createDirectoryIfMissingVerbose verbosity True cacheDir
   return cacheDir
 
@@ -144,9 +136,9 @@ data AcceptNoTargets
 data TargetContext
   = ProjectContext -- ^ The target selectors are part of a project.
   | GlobalContext  -- ^ The target selectors are from the global context.
-  | ScriptContext FilePath Executable BS.ByteString
+  | ScriptContext FilePath Executable
   -- ^ The target selectors refer to a script. Contains the path to the script and
-  -- the executable of contents parsed from the script
+  -- the executable metadata parsed from the script
   deriving (Eq, Show)
 
 -- | Determine whether the targets represent regular targets or a script
@@ -157,7 +149,6 @@ data TargetContext
 -- delete it after the action finishes.
 withContextAndSelectors
   :: AcceptNoTargets     -- ^ What your command should do when no targets are found.
-  -> String              -- ^ A prefix to add to the path before hashing, if you don't want to use the default cache dir.
   -> Maybe ComponentKind -- ^ A target filter
   -> NixStyleFlags a     -- ^ Command line flags
   -> [String]            -- ^ Target strings or a script and args.
@@ -165,7 +156,7 @@ withContextAndSelectors
   -> (TargetContext -> ProjectBaseContext -> [TargetSelector] -> IO b)
   -- ^ The body of your command action.
   -> IO b
-withContextAndSelectors noTargets cachePrefix kind flags@NixStyleFlags {..} targetStrings globalFlags act
+withContextAndSelectors noTargets kind flags@NixStyleFlags {..} targetStrings globalFlags act
   = withTemporaryTempDirectory $ \mkTmpDir -> do
     (tc, ctx) <- withProjectOrGlobalConfig verbosity ignoreProject globalConfigFlag with (without mkTmpDir)
 
@@ -203,16 +194,16 @@ withContextAndSelectors noTargets cachePrefix kind flags@NixStyleFlags {..} targ
       exists <- doesFileExist script
       if exists then do
         -- In the script case we always want a dummy context even when ignoreProject is False
-        let mkCacheDir = ensureScriptCacheDirectory verbosity cachePrefix script
+        let mkCacheDir = ensureScriptCacheDirectory verbosity script
         (_, ctx) <- withProjectOrGlobalConfig verbosity (Flag True) globalConfigFlag with (without mkCacheDir)
 
         let projectRoot = distProjectRootDirectory $ distDirLayout ctx
         writeFile (projectRoot </> "scriptlocation") =<< canonicalizePath script
 
-        (executable, contents) <- readScriptBlockFromScript verbosity =<< BS.readFile script
+        executable <- readScriptBlockFromScript verbosity =<< BS.readFile script
 
         let executable' = executable & L.buildInfo . L.defaultLanguage %~ maybe (Just Haskell2010) Just
-        return (ScriptContext script executable' contents, ctx, defaultTarget)
+        return (ScriptContext script executable', ctx, defaultTarget)
       else reportTargetSelectorProblems verbosity err
 
 withTemporaryTempDirectory :: (IO FilePath -> IO a) -> IO a
@@ -229,8 +220,8 @@ withTemporaryTempDirectory act = newEmptyMVar >>= \m -> bracket (getMkTmp m) (rm
     rmTmp m _ = tryTakeMVar m >>= maybe (return ()) (handleDoesNotExist () . removeDirectoryRecursive)
 
 -- | Add the 'SourcePackage' to the context and use it to write a .cabal file.
-updateContextAndWriteProjectFile :: ProjectBaseContext -> SourcePackage (PackageLocation (Maybe FilePath)) -> IO ProjectBaseContext
-updateContextAndWriteProjectFile ctx srcPkg = do
+updateContextAndWriteProjectFile' :: ProjectBaseContext -> SourcePackage (PackageLocation (Maybe FilePath)) -> IO ProjectBaseContext
+updateContextAndWriteProjectFile' ctx srcPkg = do
   let projectRoot = distProjectRootDirectory $ distDirLayout ctx
       projectFile = projectRoot </> fakePackageCabalFileName
       writeProjectFile = writeGenericPackageDescription (projectRoot </> fakePackageCabalFileName) (srcpkgDescription srcPkg)
@@ -244,20 +235,38 @@ updateContextAndWriteProjectFile ctx srcPkg = do
   else writeProjectFile
   return (ctx & lLocalPackages %~ (++ [SpecificSourcePackage srcPkg]))
 
--- Write a .cabal file and the script source file (Main.hs or Main.lhs)
--- and add add the executable metadata to the base context.
-updateAndPersistScriptContext :: ProjectBaseContext -> FilePath -> Executable -> BS.ByteString -> IO ProjectBaseContext
-updateAndPersistScriptContext ctx scriptPath scriptExecutable scriptContents = do
+-- | Add add the executable metadata to the context and write a .cabal file.
+updateContextAndWriteProjectFile :: ProjectBaseContext -> FilePath -> Executable -> IO ProjectBaseContext
+updateContextAndWriteProjectFile ctx scriptPath scriptExecutable = do
   let projectRoot = distProjectRootDirectory $ distDirLayout ctx
-      mainName = if takeExtension scriptPath == ".lhs" then "Main.lhs" else "Main.hs"
 
-      sourcePackage = fakeProjectSourcePackage projectRoot
-        & lSrcpkgDescription . L.condExecutables
-        .~ [("script", CondNode executable (targetBuildDepends $ buildInfo executable) [])]
-      executable = scriptExecutable & L.modulePath .~ mainName
-
-  BS.writeFile (projectRoot </> mainName) scriptContents
-  updateContextAndWriteProjectFile ctx sourcePackage
+  -- We want to use the script dir in hs-source-dirs, but hs-source-dirs wants a relpath from the projectRoot
+  -- and ghci also needs to be able to find that script from cwd using that relpath
+  backtoscript <- doublyRelativePath projectRoot scriptPath
+  let
+    sourcePackage = fakeProjectSourcePackage projectRoot
+      & lSrcpkgDescription . L.condExecutables
+      .~ [("script", CondNode executable (targetBuildDepends $ buildInfo executable) [])]
+    executable = scriptExecutable
+      & L.modulePath   .~ takeFileName scriptPath
+      & L.hsSourceDirs %~ (unsafeMakeSymbolicPath backtoscript :)
+
+  updateContextAndWriteProjectFile' ctx sourcePackage
+
+-- | Workaround for hs-script-dirs not taking absolute paths.
+-- Construct a path to scriptPath that is relative to both
+-- the project rood and working directory.
+doublyRelativePath :: FilePath -> FilePath -> IO FilePath
+doublyRelativePath projectRoot scriptPath = do
+  prd <- dropDrive <$> canonicalizePath projectRoot
+  cwd <- dropDrive <$> getCurrentDirectory
+  spd <- dropDrive . dropFileName <$> canonicalizePath scriptPath
+  let prdSegs = splitPath prd
+      cwdSegs = splitPath cwd
+      -- Make sure we get all the way down to root from either a or b
+      toRoot = joinPath . map (const "..") $ if length prdSegs > length cwdSegs then prdSegs else cwdSegs
+  -- Climb down to b from root
+  return $ toRoot </> spd
 
 parseScriptBlock :: BS.ByteString -> ParseResult Executable
 parseScriptBlock str =
@@ -279,16 +288,14 @@ readScriptBlock verbosity = parseString parseScriptBlock verbosity "script block
 --
 -- * @-}@
 --
--- Return the metadata and the contents of the file without the #! line.
-readScriptBlockFromScript :: Verbosity -> BS.ByteString -> IO (Executable, BS.ByteString)
+-- Return the metadata.
+readScriptBlockFromScript :: Verbosity -> BS.ByteString -> IO Executable
 readScriptBlockFromScript verbosity str = do
     str' <- case extractScriptBlock str of
               Left e -> die' verbosity $ "Failed extracting script block: " ++ e
               Right x -> return x
     when (BS.all isSpace str') $ warn verbosity "Empty script block"
-    (\x -> (x, noShebang)) <$> readScriptBlock verbosity str'
-  where
-    noShebang = BS.unlines . filter (not . BS.isPrefixOf "#!") . BS.lines $ str
+    readScriptBlock verbosity str'
 
 -- | Extract the first encountered script metadata block started end
 -- terminated by the tokens
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdBuild/Script/cabal.out b/cabal-testsuite/PackageTests/NewBuild/CmdBuild/Script/cabal.out
index 732deece540..1bb1a5b78c4 100644
--- a/cabal-testsuite/PackageTests/NewBuild/CmdBuild/Script/cabal.out
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdBuild/Script/cabal.out
@@ -4,5 +4,6 @@ Build profile: -w ghc-<GHCVER> -O1
 In order, the following will be built:
  - fake-package-0 (exe:script) (first run)
 Configuring executable 'script' for fake-package-0..
+Warning: 'hs-source-dirs: <PATH>' is a relative path outside of the source tree. This will not work when generating a tarball with 'sdist'.
 Preprocessing executable 'script' for fake-package-0..
 Building executable 'script' for fake-package-0..
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdBuild/Script/cabal.test.hs b/cabal-testsuite/PackageTests/NewBuild/CmdBuild/Script/cabal.test.hs
index 93434c243cd..db31636dc42 100644
--- a/cabal-testsuite/PackageTests/NewBuild/CmdBuild/Script/cabal.test.hs
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdBuild/Script/cabal.test.hs
@@ -4,8 +4,7 @@ main = cabalTest . void $ do
     cabal' "v2-build" ["script.hs"]
 
     env      <- getTestEnv
-    cacheDir <- getScriptCacheDirectory "" (testCurrentDir env </> "script.hs")
+    cacheDir <- getScriptCacheDirectory $ testCurrentDir env </> "script.hs"
 
     shouldExist $ cacheDir </> "fake-package.cabal"
-    shouldExist $ cacheDir </> "Main.hs"
     shouldExist $ cacheDir </> "scriptlocation"
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdBuild/ScriptBuildRepl/cabal.out b/cabal-testsuite/PackageTests/NewBuild/CmdBuild/ScriptBuildRepl/cabal.out
new file mode 100644
index 00000000000..b0655570836
--- /dev/null
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdBuild/ScriptBuildRepl/cabal.out
@@ -0,0 +1,14 @@
+# cabal v2-build
+Resolving dependencies...
+Build profile: -w ghc-<GHCVER> -O1
+In order, the following will be built:
+ - fake-package-0 (exe:script) (first run)
+Configuring executable 'script' for fake-package-0..
+Warning: 'hs-source-dirs: <PATH>' is a relative path outside of the source tree. This will not work when generating a tarball with 'sdist'.
+Preprocessing executable 'script' for fake-package-0..
+Building executable 'script' for fake-package-0..
+# cabal v2-repl
+Build profile: -w ghc-<GHCVER> -O1
+In order, the following will be built:
+ - fake-package-0 (exe:script) (ephemeral targets)
+Preprocessing executable 'script' for fake-package-0..
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdBuild/ScriptBuildRepl/cabal.test.hs b/cabal-testsuite/PackageTests/NewBuild/CmdBuild/ScriptBuildRepl/cabal.test.hs
new file mode 100644
index 00000000000..9c0f021da5d
--- /dev/null
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdBuild/ScriptBuildRepl/cabal.test.hs
@@ -0,0 +1,5 @@
+import Test.Cabal.Prelude
+
+main = cabalTest . void $ do
+    cabal' "v2-build" ["script.hs"]
+    cabalWithStdin "v2-repl" ["script.hs"] ""
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdBuild/ScriptBuildRepl/script.hs b/cabal-testsuite/PackageTests/NewBuild/CmdBuild/ScriptBuildRepl/script.hs
new file mode 100644
index 00000000000..cd2fae4e8f4
--- /dev/null
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdBuild/ScriptBuildRepl/script.hs
@@ -0,0 +1,6 @@
+{- cabal:
+build-depends: base
+-}
+
+main :: IO ()
+main = putStrLn "Hello World"
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdBuild/ScriptBuildRun/cabal.out b/cabal-testsuite/PackageTests/NewBuild/CmdBuild/ScriptBuildRun/cabal.out
index 238ec82dc8a..a9548f08d31 100644
--- a/cabal-testsuite/PackageTests/NewBuild/CmdBuild/ScriptBuildRun/cabal.out
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdBuild/ScriptBuildRun/cabal.out
@@ -4,6 +4,7 @@ Build profile: -w ghc-<GHCVER> -O1
 In order, the following will be built:
  - fake-package-0 (exe:script) (first run)
 Configuring executable 'script' for fake-package-0..
+Warning: 'hs-source-dirs: <PATH>' is a relative path outside of the source tree. This will not work when generating a tarball with 'sdist'.
 Preprocessing executable 'script' for fake-package-0..
 Building executable 'script' for fake-package-0..
 # cabal v2-run
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdBuild/ScriptRerun/cabal.out b/cabal-testsuite/PackageTests/NewBuild/CmdBuild/ScriptRerun/cabal.out
index a3a2453901c..f104a4884aa 100644
--- a/cabal-testsuite/PackageTests/NewBuild/CmdBuild/ScriptRerun/cabal.out
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdBuild/ScriptRerun/cabal.out
@@ -4,6 +4,7 @@ Build profile: -w ghc-<GHCVER> -O1
 In order, the following will be built:
  - fake-package-0 (exe:script) (first run)
 Configuring executable 'script' for fake-package-0..
+Warning: 'hs-source-dirs: <PATH>' is a relative path outside of the source tree. This will not work when generating a tarball with 'sdist'.
 Preprocessing executable 'script' for fake-package-0..
 Building executable 'script' for fake-package-0..
 # cabal v2-build
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdClean/Keep/cabal.out b/cabal-testsuite/PackageTests/NewBuild/CmdClean/Keep/cabal.out
index 4d11e547d3e..2df9eadc0c5 100644
--- a/cabal-testsuite/PackageTests/NewBuild/CmdClean/Keep/cabal.out
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdClean/Keep/cabal.out
@@ -4,6 +4,7 @@ Build profile: -w ghc-<GHCVER> -O1
 In order, the following will be built:
  - fake-package-0 (exe:script) (first run)
 Configuring executable 'script' for fake-package-0..
+Warning: 'hs-source-dirs: <PATH>' is a relative path outside of the source tree. This will not work when generating a tarball with 'sdist'.
 Preprocessing executable 'script' for fake-package-0..
 Building executable 'script' for fake-package-0..
 # cabal v2-build
@@ -12,6 +13,7 @@ Build profile: -w ghc-<GHCVER> -O1
 In order, the following will be built:
  - fake-package-0 (exe:script) (configuration changed)
 Configuring executable 'script' for fake-package-0..
+Warning: 'hs-source-dirs: <PATH>' is a relative path outside of the source tree. This will not work when generating a tarball with 'sdist'.
 Preprocessing executable 'script' for fake-package-0..
 Building executable 'script' for fake-package-0..
 # cabal v2-clean
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdClean/Keep/cabal.test.hs b/cabal-testsuite/PackageTests/NewBuild/CmdClean/Keep/cabal.test.hs
index 007a00cc8c3..8063d229034 100644
--- a/cabal-testsuite/PackageTests/NewBuild/CmdClean/Keep/cabal.test.hs
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdClean/Keep/cabal.test.hs
@@ -11,8 +11,8 @@ main = cabalTest . void $ do
     liftIO $ removeFile (td </> "script2.hs")
     cabal' "v2-clean" []
 
-    cacheDir  <- getScriptCacheDirectory "" (td </> "script.hs")
-    cacheDir2 <- getScriptCacheDirectory "" (td </> "script2.hs")
+    cacheDir  <- getScriptCacheDirectory (td </> "script.hs")
+    cacheDir2 <- getScriptCacheDirectory (td </> "script2.hs")
 
     shouldDirectoryExist cacheDir
     shouldDirectoryNotExist cacheDir2
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdClean/Orphan/cabal.out b/cabal-testsuite/PackageTests/NewBuild/CmdClean/Orphan/cabal.out
index 4d11e547d3e..2df9eadc0c5 100644
--- a/cabal-testsuite/PackageTests/NewBuild/CmdClean/Orphan/cabal.out
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdClean/Orphan/cabal.out
@@ -4,6 +4,7 @@ Build profile: -w ghc-<GHCVER> -O1
 In order, the following will be built:
  - fake-package-0 (exe:script) (first run)
 Configuring executable 'script' for fake-package-0..
+Warning: 'hs-source-dirs: <PATH>' is a relative path outside of the source tree. This will not work when generating a tarball with 'sdist'.
 Preprocessing executable 'script' for fake-package-0..
 Building executable 'script' for fake-package-0..
 # cabal v2-build
@@ -12,6 +13,7 @@ Build profile: -w ghc-<GHCVER> -O1
 In order, the following will be built:
  - fake-package-0 (exe:script) (configuration changed)
 Configuring executable 'script' for fake-package-0..
+Warning: 'hs-source-dirs: <PATH>' is a relative path outside of the source tree. This will not work when generating a tarball with 'sdist'.
 Preprocessing executable 'script' for fake-package-0..
 Building executable 'script' for fake-package-0..
 # cabal v2-clean
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdClean/Orphan/cabal.test.hs b/cabal-testsuite/PackageTests/NewBuild/CmdClean/Orphan/cabal.test.hs
index e2dfccc6e2c..39ba5185e94 100644
--- a/cabal-testsuite/PackageTests/NewBuild/CmdClean/Orphan/cabal.test.hs
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdClean/Orphan/cabal.test.hs
@@ -11,8 +11,8 @@ main = cabalTest . void $ do
     liftIO $ removeFile (td </> "script2.hs")
     cabal' "v2-clean" ["script.hs"]
 
-    cacheDir  <- getScriptCacheDirectory "" (td </> "script.hs")
-    cacheDir2 <- getScriptCacheDirectory "" (td </> "script2.hs")
+    cacheDir  <- getScriptCacheDirectory (td </> "script.hs")
+    cacheDir2 <- getScriptCacheDirectory (td </> "script2.hs")
 
     shouldDirectoryNotExist cacheDir
     shouldDirectoryNotExist cacheDir2
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdClean/Script/cabal.out b/cabal-testsuite/PackageTests/NewBuild/CmdClean/Script/cabal.out
index 7fe551a7e71..1c376584e11 100644
--- a/cabal-testsuite/PackageTests/NewBuild/CmdClean/Script/cabal.out
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdClean/Script/cabal.out
@@ -4,6 +4,7 @@ Build profile: -w ghc-<GHCVER> -O1
 In order, the following will be built:
  - fake-package-0 (exe:script) (first run)
 Configuring executable 'script' for fake-package-0..
+Warning: 'hs-source-dirs: <PATH>' is a relative path outside of the source tree. This will not work when generating a tarball with 'sdist'.
 Preprocessing executable 'script' for fake-package-0..
 Building executable 'script' for fake-package-0..
 # cabal v2-clean
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdClean/Script/cabal.test.hs b/cabal-testsuite/PackageTests/NewBuild/CmdClean/Script/cabal.test.hs
index cccfba8942e..d3870ce1520 100644
--- a/cabal-testsuite/PackageTests/NewBuild/CmdClean/Script/cabal.test.hs
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdClean/Script/cabal.test.hs
@@ -5,7 +5,7 @@ main = cabalTest . void $ do
     cabal' "v2-clean" ["script.hs"]
 
     env <- getTestEnv
-    cacheDir <- getScriptCacheDirectory "" (testCurrentDir env </> "script.hs")
+    cacheDir <- getScriptCacheDirectory (testCurrentDir env </> "script.hs")
 
     shouldDirectoryNotExist cacheDir
     shouldDirectoryNotExist (testDistDir env)
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdRepl/Script/cabal.test.hs b/cabal-testsuite/PackageTests/NewBuild/CmdRepl/Script/cabal.test.hs
index dbe97ea38c3..f453256b186 100644
--- a/cabal-testsuite/PackageTests/NewBuild/CmdRepl/Script/cabal.test.hs
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdRepl/Script/cabal.test.hs
@@ -5,8 +5,7 @@ main = cabalTest . void $ do
     assertOutputContains "Hello World" res
 
     env      <- getTestEnv
-    cacheDir <- getScriptCacheDirectory "repl:" (testCurrentDir env </> "script.hs")
+    cacheDir <- getScriptCacheDirectory $ testCurrentDir env </> "script.hs"
 
     shouldExist $ cacheDir </> "fake-package.cabal"
     shouldExist $ cacheDir </> "scriptlocation"
-    shouldNotExist $ cacheDir </> "Main.hs"
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdRun/Script/cabal.out b/cabal-testsuite/PackageTests/NewBuild/CmdRun/Script/cabal.out
index 31d7de3ca73..ce76cbacd69 100644
--- a/cabal-testsuite/PackageTests/NewBuild/CmdRun/Script/cabal.out
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdRun/Script/cabal.out
@@ -4,5 +4,6 @@ Build profile: -w ghc-<GHCVER> -O1
 In order, the following will be built:
  - fake-package-0 (exe:script) (first run)
 Configuring executable 'script' for fake-package-0..
+Warning: 'hs-source-dirs: <PATH>' is a relative path outside of the source tree. This will not work when generating a tarball with 'sdist'.
 Preprocessing executable 'script' for fake-package-0..
 Building executable 'script' for fake-package-0..
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdRun/Script/cabal.test.hs b/cabal-testsuite/PackageTests/NewBuild/CmdRun/Script/cabal.test.hs
index 98873d58d14..045c88117d7 100644
--- a/cabal-testsuite/PackageTests/NewBuild/CmdRun/Script/cabal.test.hs
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdRun/Script/cabal.test.hs
@@ -5,8 +5,7 @@ main = cabalTest $ do
     assertOutputContains "Hello World" res
 
     env      <- getTestEnv
-    cacheDir <- getScriptCacheDirectory "" (testCurrentDir env </> "script.hs")
+    cacheDir <- getScriptCacheDirectory (testCurrentDir env </> "script.hs")
 
     shouldExist $ cacheDir </> "fake-package.cabal"
-    shouldExist $ cacheDir </> "Main.hs"
     shouldExist $ cacheDir </> "scriptlocation"
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptLiterate/cabal.out b/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptLiterate/cabal.out
index 31d7de3ca73..ce76cbacd69 100644
--- a/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptLiterate/cabal.out
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptLiterate/cabal.out
@@ -4,5 +4,6 @@ Build profile: -w ghc-<GHCVER> -O1
 In order, the following will be built:
  - fake-package-0 (exe:script) (first run)
 Configuring executable 'script' for fake-package-0..
+Warning: 'hs-source-dirs: <PATH>' is a relative path outside of the source tree. This will not work when generating a tarball with 'sdist'.
 Preprocessing executable 'script' for fake-package-0..
 Building executable 'script' for fake-package-0..
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptMultiModule/A.hs b/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptMultiModule/A.hs
new file mode 100644
index 00000000000..6f1817649be
--- /dev/null
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptMultiModule/A.hs
@@ -0,0 +1,3 @@
+module A where
+
+helloworld = "Hello World"
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptMultiModule/cabal.out b/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptMultiModule/cabal.out
new file mode 100644
index 00000000000..ce76cbacd69
--- /dev/null
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptMultiModule/cabal.out
@@ -0,0 +1,9 @@
+# cabal v2-run
+Resolving dependencies...
+Build profile: -w ghc-<GHCVER> -O1
+In order, the following will be built:
+ - fake-package-0 (exe:script) (first run)
+Configuring executable 'script' for fake-package-0..
+Warning: 'hs-source-dirs: <PATH>' is a relative path outside of the source tree. This will not work when generating a tarball with 'sdist'.
+Preprocessing executable 'script' for fake-package-0..
+Building executable 'script' for fake-package-0..
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptMultiModule/cabal.test.hs b/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptMultiModule/cabal.test.hs
new file mode 100644
index 00000000000..ee9110853e8
--- /dev/null
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptMultiModule/cabal.test.hs
@@ -0,0 +1,5 @@
+import Test.Cabal.Prelude
+
+main = cabalTest $ do
+    res <- cabal' "v2-run" ["script.hs"]
+    assertOutputContains "Hello World" res
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptMultiModule/script.hs b/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptMultiModule/script.hs
new file mode 100644
index 00000000000..3714be53e50
--- /dev/null
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptMultiModule/script.hs
@@ -0,0 +1,10 @@
+#! /usr/bin/env cabal
+{- cabal:
+build-depends: base >= 4.3 && <5
+other-modules: A
+-}
+
+import A (helloworld)
+
+main :: IO ()
+main = putStrLn helloworld
diff --git a/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptRerun/cabal.out b/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptRerun/cabal.out
index 65fdda7f736..f53cbfda420 100644
--- a/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptRerun/cabal.out
+++ b/cabal-testsuite/PackageTests/NewBuild/CmdRun/ScriptRerun/cabal.out
@@ -4,6 +4,7 @@ Build profile: -w ghc-<GHCVER> -O1
 In order, the following will be built:
  - fake-package-0 (exe:script) (first run)
 Configuring executable 'script' for fake-package-0..
+Warning: 'hs-source-dirs: <PATH>' is a relative path outside of the source tree. This will not work when generating a tarball with 'sdist'.
 Preprocessing executable 'script' for fake-package-0..
 Building executable 'script' for fake-package-0..
 # cabal v2-run
diff --git a/cabal-testsuite/src/Test/Cabal/Prelude.hs b/cabal-testsuite/src/Test/Cabal/Prelude.hs
index 64edf3d1e51..18715f3e315 100644
--- a/cabal-testsuite/src/Test/Cabal/Prelude.hs
+++ b/cabal-testsuite/src/Test/Cabal/Prelude.hs
@@ -752,10 +752,10 @@ concatOutput :: String -> String
 concatOutput = unwords . lines . filter ((/=) '\r')
 
 -- | The directory where script build artifacts are expected to be cached
-getScriptCacheDirectory :: String -> FilePath -> TestM FilePath
-getScriptCacheDirectory prefix script = do
+getScriptCacheDirectory :: FilePath -> TestM FilePath
+getScriptCacheDirectory script = do
     cabalDir <- testCabalDir `fmap` getTestEnv
-    hashinput <- liftIO $ (prefix ++) `fmap` canonicalizePath script
+    hashinput <- liftIO $ canonicalizePath script
     let hash = C.unpack . Base16.encode . SHA256.hash . C.pack $ hashinput
     return $ cabalDir </> "script-builds" </> hash
 
diff --git a/doc/cabal-commands.rst b/doc/cabal-commands.rst
index e9e29e08d63..f15650e7d68 100644
--- a/doc/cabal-commands.rst
+++ b/doc/cabal-commands.rst
@@ -337,7 +337,8 @@ cannot be excluded for technical reasons).
 
     $ cabal v2-repl path/to/script
 
-The configuration information for the script is cached under the cabal directory.
+The configuration information for the script is cached under the cabal directory
+and can be pre-built with ``cabal v2-build path/to/script``.
 See ``cabal v2-run`` for more information on scripts.
 
 cabal v2-run
@@ -383,7 +384,9 @@ a script that looks like:
     {- cabal:
     build-depends: base ^>= 4.11
                 , shelly ^>= 1.8.1
+    other-modules: M
     -}
+    import M
 
     main :: IO ()
     main = do