diff --git a/pisi/index.py b/pisi/index.py
index 41e5c1ad..22b8e52a 100644
--- a/pisi/index.py
+++ b/pisi/index.py
@@ -58,7 +58,7 @@ class Index(XmlFile):
             for fn in files:
                 if fn.endswith(const.package_prefix):
                     ui.info('Adding ' + fn + ' to package index\n')
-                    self.add_package(os.path.join(root, fn))
+                    self.add_package(os.path.join(root, fn), repo_uri)
 
     def update_db(self, repo):
         pkgdb = packagedb.get_db(repo)
@@ -66,7 +66,7 @@ class Index(XmlFile):
         for pkg in self.packages:
             pkgdb.add_package(pkg)
 
-    def add_package(self, path):
+    def add_package(self, path, repo_uri):
         package = Package(path, 'r')
         # extract control files
         util.clean_dir(config.install_dir())
@@ -75,7 +75,9 @@ class Index(XmlFile):
         md = metadata.MetaData()
         md.read(os.path.join(config.install_dir(), const.metadata_xml))
         # TODO: in the future we'll do all of this with purl/pfile/&helpers
-        md.package.packageURI = path
+        # After that, we'll remove the ugly repo_uri parameter from this
+        # function.
+        md.package.packageURI = util.removepathprefix(repo_uri, path)
         # check package semantics
         if md.verify():
             self.packages.append(md.package)
diff --git a/pisi/operations.py b/pisi/operations.py
index 2f8d73a8..1feb0bf2 100644
--- a/pisi/operations.py
+++ b/pisi/operations.py
@@ -57,10 +57,22 @@ def install_single_name(name):
     # find package in repository
     repo = packagedb.which_repo(name)
     if repo:
+        # TODO: Allright this is ugly, but works.  Eventually, we'll
+        # change this...
+        from repodb import repodb
+        repo = repodb.get_repo(repo)
         pkg = packagedb.get_package(name)
-        ui.info("Installing %s from repository %s\n" %(name, repo))
-        ui.debug("Package URI: %s\n" % pkg.packageURI)
-        install_single_file(pkg.packageURI)
+
+        if repo.indexuri.isLocalFile():
+            pkg_path = pkg.packageURI
+        else:
+            pkg_path = os.path.join(os.path.dirname(repo.indexuri.getUri()),
+                                    pkg.packageURI)
+
+        ui.debug("Package URI: %s\n" % pkg_path)
+
+        # Package will handle remote file for us!
+        install_single_file(pkg_path)
     else:
         ui.error("Package %s not found in the repository file.\n" % pkg)