diff --git a/CHANGELOG.md b/CHANGELOG.md
new file mode 100644
index 00000000..dc6ee309
--- /dev/null
+++ b/CHANGELOG.md
@@ -0,0 +1,3 @@
+# 1.2.3
+Fixed #40 and #41, which dealt with paths being improperly served when using a
+`publicPath`.
\ No newline at end of file
diff --git a/lib/src/virtual_directory.dart b/lib/src/virtual_directory.dart
index 5c098eca..94c08a92 100644
--- a/lib/src/virtual_directory.dart
+++ b/lib/src/virtual_directory.dart
@@ -107,8 +107,8 @@ class VirtualDirectory implements AngelPlugin {
   void serve(Router router) {
     // _printDebug('Source directory: ${source.absolute.path}');
     // _printDebug('Public path prefix: "$_prefix"');
-    router.get('$publicPath/*',
-        (RequestContext req, ResponseContext res) async {
+    //router.get('$publicPath/*',
+    router.get('$_prefix/*', (RequestContext req, ResponseContext res) async {
       var path = req.path.replaceAll(_straySlashes, '');
       return servePath(path, req, res);
     });
@@ -124,7 +124,7 @@ class VirtualDirectory implements AngelPlugin {
   }
 
   close() async {
-    if (!_transformerLoad.isCompleted) {
+    if (!_transformerLoad.isCompleted && _transformers.isNotEmpty) {
       _transformerLoad.completeError(new StateError(
           'VirtualDirectory was closed before all transformers loaded.'));
     }
@@ -176,10 +176,13 @@ class VirtualDirectory implements AngelPlugin {
 
   servePath(String path, RequestContext req, ResponseContext res) async {
     if (_prefix.isNotEmpty) {
-      path = path.replaceAll(new RegExp('^' + _pathify(_prefix)), '');
+      // Only replace the *first* incidence
+      // Resolve: https://github.com/angel-dart/angel/issues/41
+      path = path.replaceFirst(new RegExp('^' + _pathify(_prefix)), '');
     }
 
     if (path.isEmpty) path = '.';
+    path = path.replaceAll(_straySlashes, '');
 
     var absolute = source.absolute.uri.resolve(path).toFilePath();
     var stat = await FileStat.stat(absolute);
diff --git a/pubspec.yaml b/pubspec.yaml
index 4e4bebf2..e6e1fed1 100644
--- a/pubspec.yaml
+++ b/pubspec.yaml
@@ -4,7 +4,7 @@ environment:
   sdk: ">=1.19.0"
 homepage: https://github.com/angel-dart/static
 author: Tobe O <thosakwe@gmail.com>
-version: 1.2.2+4
+version: 1.2.3
 dependencies:
   angel_framework: ^1.0.0-dev
   cli_util: ^0.1.1
diff --git a/test/issue41_test.dart b/test/issue41_test.dart
new file mode 100644
index 00000000..212918a3
--- /dev/null
+++ b/test/issue41_test.dart
@@ -0,0 +1,61 @@
+import 'dart:async';
+import 'dart:io';
+import 'package:angel_diagnostics/angel_diagnostics.dart';
+import 'package:angel_framework/angel_framework.dart';
+import 'package:angel_static/angel_static.dart';
+import 'package:angel_test/angel_test.dart';
+import 'package:test/test.dart';
+
+final Directory swaggerUiDistDir =
+    new Directory('test/node_modules/swagger-ui-dist');
+
+main() async {
+  TestClient client;
+  String swaggerUiCssContents, swaggerTestJsContents;
+
+  setUp(() async {
+    // Load file contents
+    swaggerUiCssContents =
+        await new File.fromUri(swaggerUiDistDir.uri.resolve('swagger-ui.css'))
+            .readAsString();
+    swaggerTestJsContents =
+        await new File.fromUri(swaggerUiDistDir.uri.resolve('test.js'))
+            .readAsString();
+
+    // Initialize app
+    var app = new Angel();
+    await Future.forEach([
+      new VirtualDirectory(source: swaggerUiDistDir, publicPath: 'swagger/'),
+      logRequests()
+    ], app.configure);
+
+    app.dumpTree();
+    client = await connectTo(app);
+  });
+
+  tearDown(() => client.close());
+
+  test('prefix is not replaced in file paths', () async {
+    var response = await client.get('/swagger/swagger-ui.css');
+    print('Response: ${response.body}');
+    expect(response, hasBody(swaggerUiCssContents));
+  });
+
+  test('get a file without prefix in name', () async {
+    var response = await client.get('/swagger/test.js');
+    print('Response: ${response.body}');
+    expect(response, hasBody(swaggerTestJsContents));
+  });
+
+  test('trailing slash at root', () async {
+    var response = await client.get('/swagger');
+    var body1 = response.body;
+    print('Response #1: $body1');
+
+    response = await client.get('/swagger/');
+    var body2 = response.body;
+    print('Response #2: $body2');
+
+    expect(body1, body2);
+  });
+}
diff --git a/test/node_modules/swagger-ui-dist/index.html b/test/node_modules/swagger-ui-dist/index.html
new file mode 100644
index 00000000..6607e2bc
--- /dev/null
+++ b/test/node_modules/swagger-ui-dist/index.html
@@ -0,0 +1,10 @@
+<!DOCTYPE html>
+<html>
+<head>
+    <title>Swagger...</title>
+</head>
+<body>
+<h1>Hello!</h1>
+<i>Hooray for testing...</i>
+</body>
+</html>
\ No newline at end of file
diff --git a/test/node_modules/swagger-ui-dist/swagger-ui.css b/test/node_modules/swagger-ui-dist/swagger-ui.css
new file mode 100644
index 00000000..9cabb2d4
--- /dev/null
+++ b/test/node_modules/swagger-ui-dist/swagger-ui.css
@@ -0,0 +1,3 @@
+html, body {
+    font-weight: bold;
+}
\ No newline at end of file
diff --git a/test/node_modules/swagger-ui-dist/test.js b/test/node_modules/swagger-ui-dist/test.js
new file mode 100644
index 00000000..3c800d3a
--- /dev/null
+++ b/test/node_modules/swagger-ui-dist/test.js
@@ -0,0 +1 @@
+console.log('foo');
\ No newline at end of file