diff --git a/python/src/com/jetbrains/python/psi/impl/PyImportElementImpl.java b/python/src/com/jetbrains/python/psi/impl/PyImportElementImpl.java
index 308bb256bd8c..a54a712585eb 100644
--- a/python/src/com/jetbrains/python/psi/impl/PyImportElementImpl.java
+++ b/python/src/com/jetbrains/python/psi/impl/PyImportElementImpl.java
@@ -219,7 +219,10 @@ public class PyImportElementImpl extends PyBaseElementImpl<PyImportElementStub>
       if (qName == null || qName.getComponentCount() == 0 || !qName.getComponents().get(0).equals(the_name)) {
         return null;
       }
-      return ResolveImportUtil.resolveImportElement(this, PyQualifiedName.fromComponents(the_name));
+      if (qName.getComponentCount() == 1) {
+        return ResolveImportUtil.resolveImportElement(this, PyQualifiedName.fromComponents(the_name));
+      }
+      return new PyImportedModule((PyFile) getContainingFile(), PyQualifiedName.fromComponents(the_name));
     }
   }
 
diff --git a/python/src/com/jetbrains/python/psi/impl/PyImportedModule.java b/python/src/com/jetbrains/python/psi/impl/PyImportedModule.java
index 276bbd815589..e81836a9c4b5 100644
--- a/python/src/com/jetbrains/python/psi/impl/PyImportedModule.java
+++ b/python/src/com/jetbrains/python/psi/impl/PyImportedModule.java
@@ -4,11 +4,10 @@ import com.intellij.psi.PsiElement;
 import com.intellij.psi.PsiElementVisitor;
 import com.intellij.psi.impl.light.LightElement;
 import com.jetbrains.python.PythonLanguage;
-import com.jetbrains.python.psi.NameDefiner;
-import com.jetbrains.python.psi.PyElement;
-import com.jetbrains.python.psi.PyFile;
-import com.jetbrains.python.psi.PyImportElement;
+import com.jetbrains.python.psi.*;
+import com.jetbrains.python.psi.resolve.ResolveImportUtil;
 import org.jetbrains.annotations.NotNull;
+import org.jetbrains.annotations.Nullable;
 
 import java.util.List;
 
@@ -25,6 +24,14 @@ public class PyImportedModule extends LightElement implements NameDefiner {
     myImportedPrefix = importedPrefix;
   }
 
+  public PyFile getContainingFile() {
+    return myContainingFile;
+  }
+
+  public PyQualifiedName getImportedPrefix() {
+    return myImportedPrefix;
+  }
+
   @NotNull
   public Iterable<PyElement> iterateNames() {
     throw new UnsupportedOperationException();
@@ -32,29 +39,27 @@ public class PyImportedModule extends LightElement implements NameDefiner {
 
   public PsiElement getElementNamed(String the_name) {
     PyQualifiedName prefix = myImportedPrefix.append(the_name);
-    final List<PyImportElement> imports = ((PyFileImpl)myContainingFile).getImportTargets();
-    for (PyImportElement anImport : imports) {
-      final PyQualifiedName qName = anImport.getImportedQName();
-      if (qName != null && matchesPrefix(qName, prefix)) {
-        if (qName.getComponentCount() == prefix.getComponentCount()) {
-          return anImport;
-        }
-        return new PyImportedModule(myContainingFile, prefix);
+    final PyImportElement importElement = findMatchingImportElement(prefix);
+    if (importElement != null) {
+      final PyQualifiedName qName = importElement.getImportedQName();
+      if (qName != null && qName.getComponentCount() == prefix.getComponentCount()) {
+        return resolve(importElement, prefix);
       }
+      return new PyImportedModule(myContainingFile, prefix);
     }
     return null;
   }
 
-  private static boolean matchesPrefix(PyQualifiedName qName, PyQualifiedName prefix) {
-    if (qName.getComponentCount() < prefix.getComponentCount()) {
-      return false;
-    }
-    for (int i = 0; i < prefix.getComponentCount(); i++) {
-      if (!qName.getComponents().get(i).equals(prefix.getComponents().get(i))) {
-        return false;
+  @Nullable
+  private PyImportElement findMatchingImportElement(PyQualifiedName prefix) {
+    final List<PyImportElement> imports = ((PyFileImpl)myContainingFile).getImportTargets();
+    for (PyImportElement anImport : imports) {
+      final PyQualifiedName qName = anImport.getImportedQName();
+      if (qName != null && qName.matchesPrefix(prefix)) {
+        return anImport;
       }
     }
-    return true;
+    return null;
   }
 
   public boolean mustResolveOutside() {
@@ -77,4 +82,22 @@ public class PyImportedModule extends LightElement implements NameDefiner {
   public String toString() {
     return "PyImportedModule:" + myImportedPrefix;
   }
+
+  @NotNull
+  @Override
+  public PsiElement getNavigationElement() {
+    final PyImportElement importElement = findMatchingImportElement(myImportedPrefix);
+    if (importElement != null) {
+      final PsiElement element = resolve(importElement, myImportedPrefix);
+      if (element != null) {
+        return element;
+      }
+    }
+    return super.getNavigationElement();
+  }
+
+  @Nullable
+  private PsiElement resolve(PyImportElement importElement, final PyQualifiedName prefix) {
+    return PyUtil.turnDirIntoInit(ResolveImportUtil.resolveImportElement(importElement, prefix));
+  }
 }
diff --git a/python/src/com/jetbrains/python/psi/impl/PyQualifiedName.java b/python/src/com/jetbrains/python/psi/impl/PyQualifiedName.java
index 22ebc448de5f..dfc50b79796f 100644
--- a/python/src/com/jetbrains/python/psi/impl/PyQualifiedName.java
+++ b/python/src/com/jetbrains/python/psi/impl/PyQualifiedName.java
@@ -1,5 +1,6 @@
 package com.jetbrains.python.psi.impl;
 
+import com.intellij.openapi.util.text.StringUtil;
 import com.intellij.psi.stubs.StubInputStream;
 import com.intellij.psi.stubs.StubOutputStream;
 import com.intellij.util.io.StringRef;
@@ -61,6 +62,18 @@ public class PyQualifiedName {
     return true;
   }
 
+  public boolean matchesPrefix(PyQualifiedName prefix) {
+    if (getComponentCount() < prefix.getComponentCount()) {
+      return false;
+    }
+    for (int i = 0; i < prefix.getComponentCount(); i++) {
+      if (!getComponents().get(i).equals(prefix.getComponents().get(i))) {
+        return false;
+      }
+    }
+    return true;
+  }
+
   public static void serialize(@Nullable PyQualifiedName qName, StubOutputStream dataStream) throws IOException {
     if (qName == null) {
       dataStream.writeVarInt(0);
@@ -97,4 +110,9 @@ public class PyQualifiedName {
     }
     return myComponents.get(myComponents.size()-1);
   }
+
+  @Override
+  public String toString() {
+    return StringUtil.join(myComponents, ".");
+  }
 }
diff --git a/python/src/com/jetbrains/python/psi/impl/PyReferenceExpressionImpl.java b/python/src/com/jetbrains/python/psi/impl/PyReferenceExpressionImpl.java
index f6bcdc32572c..ceb8b515a0b6 100644
--- a/python/src/com/jetbrains/python/psi/impl/PyReferenceExpressionImpl.java
+++ b/python/src/com/jetbrains/python/psi/impl/PyReferenceExpressionImpl.java
@@ -241,6 +241,9 @@ public class PyReferenceExpressionImpl extends PyElementImpl implements PyRefere
     if (target instanceof PyFile) {
       return new PyModuleType((PyFile) target);
     }
+    if (target instanceof PyImportedModule) {
+      return new PyImportedModuleType((PyImportedModule) target);
+    }
     if (target instanceof PyTargetExpression && context.allowDataFlow() && anchor != null) {
       final ScopeOwner scopeOwner = PsiTreeUtil.getParentOfType(anchor, ScopeOwner.class);
       if (scopeOwner != null && scopeOwner == PsiTreeUtil.getParentOfType(target, ScopeOwner.class)) {
diff --git a/python/src/com/jetbrains/python/psi/resolve/ResolveImportUtil.java b/python/src/com/jetbrains/python/psi/resolve/ResolveImportUtil.java
index beb2d3be0dda..58a967d996f7 100644
--- a/python/src/com/jetbrains/python/psi/resolve/ResolveImportUtil.java
+++ b/python/src/com/jetbrains/python/psi/resolve/ResolveImportUtil.java
@@ -68,6 +68,9 @@ public class ResolveImportUtil {
    */
   @Nullable
   public static PsiDirectory stepBackFrom(PsiFile base, int depth) {
+    if (depth == 0) {
+      return base.getContainingDirectory();
+    }
     PsiDirectory result;
     if (base != null) {
       base = base.getOriginalFile(); // just to make sure 
diff --git a/python/src/com/jetbrains/python/psi/types/PyImportedModuleType.java b/python/src/com/jetbrains/python/psi/types/PyImportedModuleType.java
new file mode 100644
index 000000000000..f18b8acc8cbb
--- /dev/null
+++ b/python/src/com/jetbrains/python/psi/types/PyImportedModuleType.java
@@ -0,0 +1,50 @@
+package com.jetbrains.python.psi.types;
+
+import com.intellij.codeInsight.lookup.LookupElement;
+import com.intellij.codeInsight.lookup.LookupElementBuilder;
+import com.intellij.psi.PsiElement;
+import com.intellij.util.ProcessingContext;
+import com.jetbrains.python.psi.PyImportElement;
+import com.jetbrains.python.psi.PyQualifiedExpression;
+import com.jetbrains.python.psi.impl.PyFileImpl;
+import com.jetbrains.python.psi.impl.PyImportedModule;
+import com.jetbrains.python.psi.impl.PyQualifiedName;
+
+import java.util.ArrayList;
+import java.util.List;
+
+/**
+ * @author yole
+ */
+public class PyImportedModuleType implements PyType {
+  private PyImportedModule myImportedModule;
+
+  public PyImportedModuleType(PyImportedModule importedModule) {
+    myImportedModule = importedModule;
+  }
+
+  public PsiElement resolveMember(String name) {
+    return myImportedModule.getElementNamed(name);
+  }
+
+  public Object[] getCompletionVariants(PyQualifiedExpression referenceExpression, ProcessingContext context) {
+    List<LookupElement> result = new ArrayList<LookupElement>();
+    final List<PyImportElement> importTargets = ((PyFileImpl)myImportedModule.getContainingFile()).getImportTargets();
+    final int imported = myImportedModule.getImportedPrefix().getComponentCount();
+    for (PyImportElement importTarget : importTargets) {
+      final PyQualifiedName qName = importTarget.getImportedQName();
+      if (qName != null && qName.matchesPrefix(myImportedModule.getImportedPrefix())) {
+        final List<String> components = qName.getComponents();
+        if (components.size() > imported) {
+          String module = components.get(imported);
+          result.add(LookupElementBuilder.create(module));
+        }
+      }
+    }
+    return result.toArray(new Object[result.size()]);
+  }
+
+  public String getName() {
+    return "PyImportedModuleType:" + myImportedModule.toString();
+  }
+}
diff --git a/python/testData/completion/py874.after.py b/python/testData/completion/py874.after.py
new file mode 100644
index 000000000000..39dd3f1cfa93
--- /dev/null
+++ b/python/testData/completion/py874.after.py
@@ -0,0 +1,2 @@
+import root.nested_mod
+root.nested_mod
diff --git a/python/testData/completion/py874.py b/python/testData/completion/py874.py
new file mode 100644
index 000000000000..75468149c486
--- /dev/null
+++ b/python/testData/completion/py874.py
@@ -0,0 +1,2 @@
+import root.nested_mod
+root.<caret>
diff --git a/python/testData/completion/root/__init__.py b/python/testData/completion/root/__init__.py
new file mode 100644
index 000000000000..e69de29bb2d1
diff --git a/python/testData/completion/root/nested_mod.py b/python/testData/completion/root/nested_mod.py
new file mode 100644
index 000000000000..e69de29bb2d1
diff --git a/python/testSrc/com/jetbrains/python/PyMultiFileResolveTest.java b/python/testSrc/com/jetbrains/python/PyMultiFileResolveTest.java
index 28a3c73c35e2..7610bae14c50 100644
--- a/python/testSrc/com/jetbrains/python/PyMultiFileResolveTest.java
+++ b/python/testSrc/com/jetbrains/python/PyMultiFileResolveTest.java
@@ -168,7 +168,8 @@ public class PyMultiFileResolveTest extends PyLightFixtureTestCase {
 
   public void testNestedPackageElement() throws Exception {
     PsiElement element = doResolve();
-    assertTrue(element instanceof PyFile);
+    element = element.getNavigationElement();
+    assertInstanceOf(element, PyFile.class);
     assertEquals("__init__.py", ((PyFile) element).getName());
   }
 
diff --git a/python/testSrc/com/jetbrains/python/PythonCompletionTest.java b/python/testSrc/com/jetbrains/python/PythonCompletionTest.java
index 0f3023400bc4..9795702315d2 100644
--- a/python/testSrc/com/jetbrains/python/PythonCompletionTest.java
+++ b/python/testSrc/com/jetbrains/python/PythonCompletionTest.java
@@ -95,4 +95,13 @@ public class PythonCompletionTest extends PyLightFixtureTestCase {
     myFixture.completeBasic();
     myFixture.checkResultByFile(testName + ".after.py");
   }
+
+  public void testPy874() throws Exception {
+    final String dirname = "completion/";
+    final String testName = dirname + "py874";
+    myFixture.configureByFile(testName + ".py");
+    myFixture.copyDirectoryToProject(dirname + "root", dirname + "root");
+    myFixture.completeBasic();
+    myFixture.checkResultByFile(testName + ".after.py");
+  }
 }
\ No newline at end of file