diff --git a/phpBB/includes/template/filter.php b/phpBB/includes/template/filter.php
index abee32c8f7..66d28242a3 100644
--- a/phpBB/includes/template/filter.php
+++ b/phpBB/includes/template/filter.php
@@ -361,6 +361,43 @@ class phpbb_template_filter extends php_user_filter
 		return $text_blocks;
 	}
 
+	/**
+	* Parse paths of the form {FOO}/a/{BAR}/b
+	*
+	* Note: this method assumes at least one variable in the path, this should
+	* be checked before this method is called.
+	*
+	* @param string $path The path to parse
+	* @param string $include_type The type of template function to call
+	* @return string An appropriately formatted string to include in the
+	* 	template or an empty string if an expression like S_FIRST_ROW was
+	* 	incorrectly used
+	*/
+	private function parse_dynamic_path($path, $include_type)
+	{
+		$matches = array();
+		$replace = array();
+		$is_expr = true;
+
+		preg_match_all('#\{((?:' . self::REGEX_NS . '\.)*)(\$)?(' . self::REGEX_VAR . ')\}#', $path, $matches);
+		foreach ($matches[0] as $var_str)
+		{
+			$tmp_is_expr = false;
+			$var = $this->get_varref($var_str, $tmp_is_expr);
+			$is_expr = $is_expr && $tmp_is_expr;
+			$replace[] = "' . $var . '";
+		}
+
+		if (!$is_expr)
+		{
+			return " \$_template->$include_type('" . str_replace($matches[0], $replace, $path) . "', true);";
+		}
+		else
+		{
+			return '';
+		}
+	}
+
 	/**
 	* Compile variables
 	*
@@ -774,15 +811,9 @@ class phpbb_template_filter extends php_user_filter
 	private function compile_tag_include($tag_args)
 	{
 		// Process dynamic includes
-		if ($tag_args[0] == '{')
+		if (strpos($tag_args, '{') !== false)
 		{
-			$var = $this->get_varref($tag_args, $is_expr);
-
-			// Make sure someone didn't try to include S_FIRST_ROW or similar
-			if (!$is_expr)
-			{
-				return "if (isset($var)) { \$_template->_tpl_include($var); }";
-			}
+			return $this->parse_dynamic_path($tag_args, '_tpl_include');
 		}
 
 		return "\$_template->_tpl_include('$tag_args');";
@@ -796,6 +827,11 @@ class phpbb_template_filter extends php_user_filter
 	*/
 	private function compile_tag_include_php($tag_args)
 	{
+		if (strpos($tag_args, '{') !== false)
+		{
+			return $this->parse_dynamic_path($tag_args, '_php_include');
+		}
+
 		return "\$_template->_php_include('$tag_args');";
 	}
 
@@ -883,14 +919,9 @@ class phpbb_template_filter extends php_user_filter
 	private function compile_tag_include_js($tag_args)
 	{
 		// Process dynamic includes
-		if ($tag_args[0] == '{')
+		if (strpos($tag_args, '{') !== false)
 		{
-			$var = $this->get_varref($tag_args, $is_expr);
-			if (!$is_expr)
-			{
-				return " \$_template->_js_include($var, true);";
-			}
-			return '';
+			return $this->parse_dynamic_path($tag_args, '_js_include');
 		}
 
 		// Locate file
diff --git a/phpBB/includes/template/template.php b/phpBB/includes/template/template.php
index 5d3ce4c82b..36d7bc5307 100644
--- a/phpBB/includes/template/template.php
+++ b/phpBB/includes/template/template.php
@@ -538,7 +538,11 @@ class phpbb_template
 		// Locate file
 		if ($locate)
 		{
-			$file = $this->locator->get_first_file_location(array($file), true, true);
+			$located = $this->locator->get_first_file_location(array($file), false, true);
+			if ($located)
+			{
+				$file = $located;
+			}
 		}
 		else if ($relative)
 		{
diff --git a/tests/template/includephp_test.php b/tests/template/includephp_test.php
index f008a734eb..c93a53e2ad 100644
--- a/tests/template/includephp_test.php
+++ b/tests/template/includephp_test.php
@@ -23,6 +23,18 @@ class phpbb_template_includephp_test extends phpbb_template_template_test_case
 		$this->assertEquals("Path is relative to board root.\ntesting included php", $this->display('test'), "Testing INCLUDEPHP");
 	}
 
+	public function test_includephp_variables()
+	{
+		$this->setup_engine(array('tpl_allow_php' => true));
+
+		$cache_file = $this->template->cachepath . 'includephp_variables.html.php';
+
+		$this->run_template('includephp_variables.html', array('TEMPLATES' => 'templates'), array(), array(), "Path includes variables.\ntesting included php", $cache_file);
+
+		$this->template->set_filenames(array('test' => 'includephp_variables.html'));
+		$this->assertEquals("Path includes variables.\ntesting included php", $this->display('test'), "Testing INCLUDEPHP");
+	}
+
 	public function test_includephp_absolute()
 	{
 		$path_to_php = dirname(__FILE__) . '/templates/_dummy_include.php.inc';
diff --git a/tests/template/template_includejs_test.php b/tests/template/template_includejs_test.php
index a8f9a9037f..22b020208b 100644
--- a/tests/template/template_includejs_test.php
+++ b/tests/template/template_includejs_test.php
@@ -20,11 +20,14 @@ class phpbb_template_template_includejs_test extends phpbb_template_template_tes
 		$scripts = array(
 			'<script src="' . $this->test_path . '/templates/parent_and_child.js?assets_version=1"></script>',
 			'<script src="' . $this->test_path . '/parent_templates/parent_only.js?assets_version=1"></script>',
-			'<script src="' . $this->test_path . '/templates/child_only.js?assets_version=1"></script>'
+			'<script src="' . $this->test_path . '/templates/child_only.js?assets_version=1"></script>',
+			'<script src="' . $this->test_path . '/templates/subdir/parent_only.js?assets_version=1"></script>',
+			'<script src="' . $this->test_path . '/templates/subdir/subsubdir/parent_only.js?assets_version=1"></script>',
+			'<script src="' . $this->test_path . '/templates/subdir/parent_only.js?assets_version=1"></script>',
 		);
 
 		// Run test
 		$cache_file = $this->template->cachepath . 'includejs.html.php';
-		$this->run_template('includejs.html', array('PARENT' => 'parent_only.js'), array(), array(), implode('', $scripts), $cache_file);
+		$this->run_template('includejs.html', array('PARENT' => 'parent_only.js', 'SUBDIR' => 'subdir', 'EXT' => 'js'), array(), array(), implode('', $scripts), $cache_file);
 	}
 }
diff --git a/tests/template/template_test.php b/tests/template/template_test.php
index f8677ed913..83995cb4ac 100644
--- a/tests/template/template_test.php
+++ b/tests/template/template_test.php
@@ -183,6 +183,13 @@ class phpbb_template_template_test extends phpbb_template_template_test_case
 				array(),
 				'value',
 			),
+			array(
+				'include_variables.html',
+				array('SUBDIR' => 'subdir', 'VARIABLE' => 'value'),
+				array(),
+				array(),
+				'value',
+			),
 			array(
 				'loop_vars.html',
 				array(),
diff --git a/tests/template/templates/include_variables.html b/tests/template/templates/include_variables.html
new file mode 100644
index 0000000000..8371a061b5
--- /dev/null
+++ b/tests/template/templates/include_variables.html
@@ -0,0 +1 @@
+<!-- INCLUDE {SUBDIR}/variable.html -->
diff --git a/tests/template/templates/includejs.html b/tests/template/templates/includejs.html
index 8a2587d76b..ef73700eeb 100644
--- a/tests/template/templates/includejs.html
+++ b/tests/template/templates/includejs.html
@@ -2,4 +2,7 @@
 <!-- INCLUDEJS {PARENT} -->
 <!-- DEFINE $TEST = 'child_only.js' -->
 <!-- INCLUDEJS {$TEST} -->
-{SCRIPTS}
\ No newline at end of file
+<!-- INCLUDEJS subdir/{PARENT} -->
+<!-- INCLUDEJS {SUBDIR}/subsubdir/{PARENT} -->
+<!-- INCLUDEJS {SUBDIR}/parent_only.{EXT} -->
+{SCRIPTS}
diff --git a/tests/template/templates/includephp_variables.html b/tests/template/templates/includephp_variables.html
new file mode 100644
index 0000000000..6106efc86a
--- /dev/null
+++ b/tests/template/templates/includephp_variables.html
@@ -0,0 +1,2 @@
+Path includes variables.
+<!-- INCLUDEPHP ../tests/template/{TEMPLATES}/_dummy_include.php.inc -->
diff --git a/tests/template/templates/subdir/parent_only.js b/tests/template/templates/subdir/parent_only.js
new file mode 100644
index 0000000000..e69de29bb2
diff --git a/tests/template/templates/subdir/subsubdir/parent_only.js b/tests/template/templates/subdir/subsubdir/parent_only.js
new file mode 100644
index 0000000000..e69de29bb2
diff --git a/tests/template/templates/subdir/variable.html b/tests/template/templates/subdir/variable.html
new file mode 100644
index 0000000000..f68f91597c
--- /dev/null
+++ b/tests/template/templates/subdir/variable.html
@@ -0,0 +1 @@
+{VARIABLE}