diff --git a/lib/src/barback/dart2js_transformer.dart b/lib/src/barback/dart2js_transformer.dart
index e9678ff..e020deb 100644
--- a/lib/src/barback/dart2js_transformer.dart
+++ b/lib/src/barback/dart2js_transformer.dart
@@ -134,13 +134,13 @@
 
     var entrypoint = _environment.graph.packages[id.package].path(id.path);
 
-    // We define the packageRoot in terms of the entrypoint directory, and not
-    // the rootPackage, to ensure that the generated source-maps are valid.
+    // We define the .packages file in terms of the entrypoint directory, and
+    // not the rootPackage, to ensure that the generated source-maps are valid.
     // Source-maps contain relative URLs to package sources and these relative
     // URLs should be self-contained within the paths served by pub-serve.
     // See #1511 for details.
     var buildDir = _environment.getSourceDirectoryContaining(id.path);
-    var packageRoot = _environment.rootPackage.path(buildDir, "packages");
+    var packageConfig = _environment.rootPackage.path(buildDir, ".packages");
 
     // TODO(rnystrom): Should have more sophisticated error-handling here. Need
     // to report compile errors to the user in an easily visible way. Need to
@@ -154,7 +154,7 @@
             defaultsTo: _settings.mode == BarbackMode.RELEASE),
         verbose: _configBool('verbose'),
         environment: _configEnvironment,
-        packageRoot: packageRoot,
+        packageConfig: packageConfig,
         analyzeAll: _configBool('analyzeAll'),
         preserveUris: _configBool('preserveUris'),
         suppressWarnings: _configBool('suppressWarnings'),
@@ -223,6 +223,7 @@
   final AssetEnvironment _environment;
   final Transform _transform;
   String _libraryRootPath;
+  String _packagesFileContents;
 
   /// The map of previously loaded files.
   ///
@@ -279,6 +280,18 @@
         .getSourceDirectoryContaining(_transform.primaryInput.id.path);
     _libraryRootPath =
         _environment.rootPackage.path(buildDir, "packages", r"$sdk");
+
+    // We also define the entries within the .packages file in terms of the
+    // entrypoint directory, and not the rootPackage, to ensure that the
+    // generated source-maps are valid.
+    // Source-maps contain relative URLs to package sources and these relative
+    // URLs should be self-contained within the paths served by pub-serve.
+    // See #1511 for details.
+    var sb = new StringBuffer();
+    for (var package in _environment.graph.packages.keys) {
+      sb.write('$package:packages/$package/\n');
+    }
+    _packagesFileContents = '$sb';
   }
 
   /// A [CompilerInputProvider] for dart2js.
@@ -400,6 +413,8 @@
       if (id != null) {
         if (id.extension == '.dill') {
           return collectBytes(_transform.readInput(id));
+        } else if (id.path.endsWith('/.packages')) {
+          return _packagesFileContents;
         } else {
           return _transform.readInputAsString(id);
         }
diff --git a/lib/src/dart.dart b/lib/src/dart.dart
index f673858..4bb3117 100644
--- a/lib/src/dart.dart
+++ b/lib/src/dart.dart
@@ -10,7 +10,6 @@
 import 'package:analyzer/analyzer.dart';
 import 'package:barback/barback.dart';
 import 'package:compiler_unsupported/compiler.dart' as compiler;
-import 'package:compiler_unsupported/src/filenames.dart' show appendSlash;
 import 'package:path/path.dart' as p;
 
 import 'exceptions.dart';
@@ -51,8 +50,8 @@
 /// Uses [provider] to communcate between dart2js and the caller. Returns a
 /// future that completes when compilation is done.
 ///
-/// By default, the package root is assumed to be adjacent to [entrypoint], but
-/// if [packageRoot] is passed that will be used instead.
+/// By default, the .packages file is assumed to be adjacent to [entrypoint],
+/// but if [packageConfig] is passed that will be used instead.
 Future compile(String entrypoint, CompilerProvider provider,
     {Iterable<String> commandLineOptions,
     bool checked: false,
@@ -60,7 +59,7 @@
     bool minify: true,
     bool verbose: false,
     Map<String, String> environment,
-    String packageRoot,
+    String packageConfig,
     bool analyzeAll: false,
     bool preserveUris: false,
     bool suppressWarnings: false,
@@ -89,7 +88,6 @@
   if (platformBinaries != null) {
     options.add('--platform-binaries=$platformBinaries');
   }
-  options.add('--use-old-frontend');
 
   var sourceUrl = p.toUri(entrypoint);
   options.add("--out=$sourceUrl.js");
@@ -102,21 +100,22 @@
   if (environment == null) environment = {};
   if (commandLineOptions != null) options.addAll(commandLineOptions);
 
-  if (packageRoot == null) {
-    packageRoot = p.join(p.dirname(entrypoint), 'packages');
+  if (packageConfig == null) {
+    packageConfig = p.join(p.dirname(entrypoint), '.packages');
   } else {
-    packageRoot = p.normalize(p.absolute(packageRoot));
+    packageConfig = p.normalize(p.absolute(packageConfig));
   }
 
   await compiler.compile(
       p.toUri(entrypoint),
       provider.libraryRoot,
-      p.toUri(appendSlash(packageRoot)),
+      null,
       provider.provideInput,
       provider.handleDiagnostic,
       options,
       provider.provideOutput,
-      environment);
+      environment,
+      p.toUri(packageConfig));
 }
 
 /// Returns whether [dart] looks like an entrypoint file.