diff --git a/lib/cmock.rb b/lib/cmock.rb
index c1d80af..c224fa1 100644
--- a/lib/cmock.rb
+++ b/lib/cmock.rb
@@ -27,9 +27,9 @@ class CMock
     @silent        = (cm_config.verbosity < 2)
   end
 
-  def setup_mocks(files)
+  def setup_mocks(files, folder = nil)
     [files].flatten.each do |src|
-      generate_mock src
+      generate_mock(src, folder)
     end
   end
 
@@ -41,11 +41,11 @@ class CMock
 
   private ###############################
 
-  def generate_mock(src)
+  def generate_mock(src, folder)
     name = File.basename(src, '.*')
     ext = File.extname(src)
     puts "Creating mock for #{name}..." unless @silent
-    @cm_generator.create_mock(name, @cm_parser.parse(name, File.read(src)), ext)
+    @cm_generator.create_mock(name, @cm_parser.parse(name, File.read(src)), ext, folder)
   end
 
   def generate_skeleton(src)
diff --git a/lib/cmock_generator.rb b/lib/cmock_generator.rb
index f08cadd..b442895 100644
--- a/lib/cmock_generator.rb
+++ b/lib/cmock_generator.rb
@@ -21,6 +21,7 @@ class CMockGenerator
     @fail_on_unexpected_calls = @config.fail_on_unexpected_calls
 
     @subdir = @config.subdir
+    @folder = nil
 
     @includes_h_pre_orig_header  = (@config.includes || @config.includes_h_pre_orig_header || []).map { |h| h =~ /</ ? h : "\"#{h}\"" }
     @includes_h_post_orig_header = (@config.includes_h_post_orig_header || []).map { |h| h =~ /</ ? h : "\"#{h}\"" }
@@ -44,12 +45,24 @@ class CMockGenerator
     end
   end
 
-  def create_mock(module_name, parsed_stuff, module_ext = nil)
+  def create_mock(module_name, parsed_stuff, module_ext = nil, folder = nil)
     @module_name = module_name
     @module_ext  = module_ext || '.h'
     @mock_name   = @prefix + @module_name + @suffix
     @clean_mock_name = TypeSanitizer.sanitize_c_identifier(@mock_name)
+
+    @folder = if folder && @subdir
+                File.join(@subdir, folder)
+              elsif @subdir
+                @subdir
+              else
+                folder
+              end
+    # adds a trailing slash to the folder output
+    @folder = File.join(@folder, '') if @folder
+
     create_mock_subdir
+
     create_mock_header_file(parsed_stuff)
     create_mock_source_file(parsed_stuff)
   end
@@ -62,7 +75,7 @@ class CMockGenerator
   private if $ThisIsOnlyATest.nil? ##############################
 
   def create_mock_subdir
-    @file_writer.create_subdir(@subdir)
+    @file_writer.create_subdir(@folder)
   end
 
   def create_using_statement(file, function)
@@ -71,12 +84,12 @@ class CMockGenerator
 
   def create_mock_header_file(parsed_stuff)
     if @include_inline == :include
-      @file_writer.create_file(@module_name + (@module_ext || '.h'), @subdir) do |file, _filename|
+      @file_writer.create_file(@module_name + (@module_ext || '.h'), @folder) do |file, _filename|
         file << parsed_stuff[:normalized_source]
       end
     end
 
-    @file_writer.create_file(@mock_name + (@module_ext || '.h'), @subdir) do |file, filename|
+    @file_writer.create_file(@mock_name + (@module_ext || '.h'), @folder) do |file, filename|
       create_mock_header_header(file, filename)
       create_mock_header_service_call_declarations(file)
       create_typedefs(file, parsed_stuff[:typedefs])
@@ -89,7 +102,7 @@ class CMockGenerator
   end
 
   def create_mock_source_file(parsed_stuff)
-    @file_writer.create_file(@mock_name + '.c', @subdir) do |file, filename|
+    @file_writer.create_file(@mock_name + '.c', @folder) do |file, filename|
       create_source_header_section(file, filename, parsed_stuff[:functions])
       create_instance_structure(file, parsed_stuff[:functions])
       create_extern_declarations(file)
@@ -116,7 +129,7 @@ class CMockGenerator
 
   def create_mock_header_header(file, _filename)
     define_name   = @clean_mock_name.upcase
-    orig_filename = (@subdir ? @subdir + '/' : '') + @module_name + (@module_ext || '.h')
+    orig_filename = (@folder || '') + @module_name + (@module_ext || '.h')
     file << "/* AUTOGENERATED FILE. DO NOT EDIT. */\n"
     file << "#ifndef _#{define_name}_H\n"
     file << "#define _#{define_name}_H\n\n"
@@ -165,7 +178,7 @@ class CMockGenerator
   end
 
   def create_source_header_section(file, filename, functions)
-    header_file = (@subdir ? @subdir + '/' : '') + filename.gsub('.c', (@module_ext || '.h'))
+    header_file = (@folder || '') + filename.gsub('.c', (@module_ext || '.h'))
     file << "/* AUTOGENERATED FILE. DO NOT EDIT. */\n" unless functions.empty?
     file << "#include <string.h>\n"
     file << "#include <stdlib.h>\n"