diff --git a/src/gn/filesystem_utils.cc b/src/gn/filesystem_utils.cc
index 6de3fbd..7a7078e 100644
--- a/src/gn/filesystem_utils.cc
+++ b/src/gn/filesystem_utils.cc
@@ -1025,10 +1025,25 @@
   OutputFile result = GetBuildDirAsOutputFile(context, type);
 
   if (source_dir.is_source_absolute()) {
-    // The source dir is source-absolute, so we trim off the two leading
-    // slashes to append to the toolchain object directory.
-    result.value().append(&source_dir.value()[2],
-                          source_dir.value().size() - 2);
+    std::string_view build_dir = context.build_settings->build_dir().value();
+    std::string_view source_dir_path = source_dir.value();
+    if (source_dir_path.substr(0, build_dir.size()) == build_dir) {
+      // The source dir is source-absolute, but in the build directory
+      // (e.g. `//out/Debug/gen/src/foo.cc` or
+      // `//out/Debug/toolchain1/gen/foo.cc`), which happens for generated
+      // sources. In this case, remove the build directory prefix, and replace
+      // it with `BUILD_DIR`. This will create results like `obj/BUILD_DIR/gen`
+      // or `toolchain2/obj/BUILD_DIR/toolchain1/gen` which look surprising,
+      // but guarantee unicity.
+      result.value().append("BUILD_DIR/");
+      result.value().append(&source_dir_path[build_dir.size()],
+                            source_dir_path.size() - build_dir.size());
+    } else {
+      // The source dir is source-absolute, so we trim off the two leading
+      // slashes to append to the toolchain object directory.
+      result.value().append(&source_dir.value()[2],
+                            source_dir.value().size() - 2);
+    }
   } else {
     // System-absolute.
     AppendFixedAbsolutePathSuffix(context.build_settings, source_dir, &result);
diff --git a/src/gn/ninja_c_binary_target_writer_unittest.cc b/src/gn/ninja_c_binary_target_writer_unittest.cc
index 6056c36..9476193 100644
--- a/src/gn/ninja_c_binary_target_writer_unittest.cc
+++ b/src/gn/ninja_c_binary_target_writer_unittest.cc
@@ -405,18 +405,18 @@
       "target_out_dir = obj/foo\n"
       "target_output_name = gen_obj\n"
       "\n"
-      "build obj/out/Debug/gen_obj.generated.o: cxx generated.cc"
+      "build obj/BUILD_DIR/gen_obj.generated.o: cxx generated.cc"
       " || obj/foo/generate.stamp\n"
       "  source_file_part = generated.cc\n"
       "  source_name_part = generated\n"
       "\n"
-      "build obj/foo/gen_obj.stamp: stamp obj/out/Debug/gen_obj.generated.o"
+      "build obj/foo/gen_obj.stamp: stamp obj/BUILD_DIR/gen_obj.generated.o"
       // The order-only dependency here is strictly unnecessary since the
       // sources list this as an order-only dep.
       " || obj/foo/generate.stamp\n";
 
   std::string obj_str = obj_out.str();
-  EXPECT_EQ(obj_expected, obj_str);
+  EXPECT_EQ(std::string(obj_expected), obj_str);
 
   // A shared library depends on gen_obj, having corresponding header for
   // generated obj.
@@ -442,7 +442,7 @@
       "target_output_name = libgen_lib\n"
       "\n"
       "\n"
-      "build ./libgen_lib.so: solink obj/out/Debug/gen_obj.generated.o"
+      "build ./libgen_lib.so: solink obj/BUILD_DIR/gen_obj.generated.o"
       // The order-only dependency here is strictly unnecessary since
       // obj/out/Debug/gen_obj.generated.o has dependency to
       // obj/foo/gen_obj.stamp
diff --git a/src/gn/substitution_writer_unittest.cc b/src/gn/substitution_writer_unittest.cc
index fc3c446..eaa521a 100644
--- a/src/gn/substitution_writer_unittest.cc
+++ b/src/gn/substitution_writer_unittest.cc
@@ -45,6 +45,12 @@
   SourceFile result = SubstitutionWriter::ApplyPatternToSource(
       nullptr, setup.settings(), pattern, SourceFile("//foo/bar/myfile.txt"));
   ASSERT_EQ("//out/Debug/gen/foo/bar/myfile.tmp", result.value());
+
+  result = SubstitutionWriter::ApplyPatternToSource(
+      nullptr, setup.settings(), pattern,
+      SourceFile("//out/Debug/gen/generated_file.cc"));
+  ASSERT_EQ("//out/Debug/gen/BUILD_DIR/gen/generated_file.tmp", result.value())
+      << result.value();
 }
 
 TEST(SubstitutionWriter, ApplyPatternToSourceAsOutputFile) {