diff --git a/autoload/vimtex/complete.vim b/autoload/vimtex/complete.vim
index dde4905..e6bf5be 100644
--- a/autoload/vimtex/complete.vim
+++ b/autoload/vimtex/complete.vim
@@ -10,7 +10,6 @@ function! vimtex#complete#init_options() " {{{1
 
   call vimtex#util#set_default('g:vimtex_complete_close_braces', 0)
   call vimtex#util#set_default('g:vimtex_complete_recursive_bib', 0)
-  call vimtex#util#set_default('g:vimtex_complete_img_use_tail', 0)
 endfunction
 
 " }}}1
@@ -378,26 +377,22 @@ let s:img = {
       \ 'patterns' : ['\v\\includegraphics\*?%(\s*\[[^]]*\]){0,2}\s*\{[^}]*$'],
       \ 'ext_re' : '\v\.%('
       \   . join(['png', 'jpg', 'eps', 'pdf', 'pgf', 'tikz'], '|')
-      \   . ')$'
+      \   . ')$',
       \}
 
 function! s:img.complete(regex) dict " {{{2
-  let self.candidates = []
-  let self.candidates = split(globpath(b:vimtex.root, '**/*.*'), '\n')
+  call self.get_graphicspaths()
+  call self.gather_candidates()
 
-  let l:output = b:vimtex.out()
-  call filter(self.candidates, 'v:val !=# l:output')
-  call filter(self.candidates, 'v:val =~? self.ext_re')
   call filter(self.candidates, 'v:val =~# a:regex')
 
-  call map(self.candidates, 'strpart(v:val, len(b:vimtex.root)+1)')
   call map(self.candidates, '{
         \ ''abbr'' : v:val,
         \ ''word'' : v:val,
         \ ''menu'' : '' [graphics]'',
         \ }')
 
-  if g:vimtex_complete_img_use_tail
+  if !empty(self.graphicspaths)
     for l:cand in self.candidates
       let l:cand.word = fnamemodify(l:cand.word, ':t')
     endfor
@@ -406,6 +401,36 @@ function! s:img.complete(regex) dict " {{{2
   return self.candidates
 endfunction
 
+function! s:img.get_graphicspaths() dict " {{{2
+  " Get preamble text and remove comments
+  let l:preamble = vimtex#parser#tex(b:vimtex.tex, {
+        \ 're_stop': '\\begin{document}',
+        \ 'detailed': 0,
+        \})
+  call map(l:preamble, 'substitute(v:val, ''\\\@<!%.*'', '''', '''')')
+
+  " Parse preamble for graphicspath command
+  let l:graphicspath = matchstr(join(l:preamble, ' '),
+        \ '\\graphicspath{\s*{\s*\zs.*\ze\s*}\s*}')
+  let self.graphicspaths = map(split(l:graphicspath, '}\s*{'),
+        \ 'v:val[0] ==# ''/'' ? v:val : simplify(b:vimtex.root . ''/'' . v:val)')
+endfunction
+
+function! s:img.gather_candidates() dict " {{{2
+  if !empty(self.graphicspaths)
+    let self.candidates = split(globpath(expand('%:p:h'), '*.*'), '\n')
+    for l:path in self.graphicspaths
+      let self.candidates += split(globpath(l:path, '*.*'), '\n')
+    endfor
+  else
+    let self.candidates = split(globpath(b:vimtex.root, '**/*.*'), '\n')
+  endif
+
+  call filter(self.candidates, 'v:val !=# b:vimtex.out()')
+  call filter(self.candidates, 'v:val =~? self.ext_re')
+  call map(self.candidates, 'vimtex#paths#shorten_relative(v:val)')
+endfunction
+
 " }}}1
 " {{{1 Filenames (\input and \include)
 
diff --git a/autoload/vimtex/paths.vim b/autoload/vimtex/paths.vim
new file mode 100644
index 0000000..77b7e3c
--- /dev/null
+++ b/autoload/vimtex/paths.vim
@@ -0,0 +1,44 @@
+" vimtex - LaTeX plugin for Vim
+"
+" Maintainer: Karl Yngve Lervåg
+" Email:      karl.yngve@gmail.com
+"
+
+function! vimtex#paths#shorten_relative(path) " {{{1
+  " Input: An absolute path
+  " Output: Relative path with respect to the vimtex root, path relative to
+  "         vimtex root (unless absolute path is shorter)
+
+  let l:relative = vimtex#paths#relative(a:path, b:vimtex.root)
+  return strlen(l:relative) < strlen(a:path)
+        \ ? l:relative : a:path
+endfunction
+
+" }}}1
+function! vimtex#paths#relative(path, current) " {{{1
+  " Note: This algorithm is based on the one presented by @Offirmo at SO,
+  "       http://stackoverflow.com/a/12498485/51634
+  let l:target = a:path
+
+  let l:common = a:current
+  let l:result = ''
+  while substitute(l:target, '^' . l:common, '', '') ==# l:target
+    let l:common = fnamemodify(l:common, ':h')
+    let l:result = empty(l:result) ? '..' : '../' . l:result
+  endwhile
+
+  if l:common ==# '/'
+    let l:result .= '/'
+  endif
+
+  let l:forward = substitute(l:target, '^' . l:common, '', '')
+  if !empty(l:forward)
+    let l:result = empty(l:result)
+          \ ? l:forward[1:]
+          \ : l:result . l:forward
+  endif
+
+  return l:result
+endfunction
+
+" }}}1
diff --git a/doc/vimtex.txt b/doc/vimtex.txt
index a2033f2..c2e7dd2 100644
--- a/doc/vimtex.txt
+++ b/doc/vimtex.txt
@@ -375,12 +375,6 @@ Options~
 
   Default value: 0
 
-*g:vimtex_complete_img_use_tail*
-  If enabled, only the tail part of file names are completed.  This is useful
-  if one uses the `graphicx` package and the `\graphicspath` command.
-
-  Default value: 0
-
 *g:vimtex_delim_toggle_mod_list*
   Define list of delimiter modifiers to toggle through with
   |<plug>(vimtex-delim-toggle-modifier)|.
diff --git a/test/issues/640/testagain/test.pgf b/test/issues/640/testagain/test.pgf
new file mode 100644
index 0000000..e69de29
diff --git a/test/issues/640/tested.pdf b/test/issues/640/tested.pdf
new file mode 100644
index 0000000..e69de29
diff --git a/test/issues/640/tester/test.pdf b/test/issues/640/tester/test.pdf
new file mode 100644
index 0000000..e69de29
diff --git a/test/issues/640/tester/test.tex b/test/issues/640/tester/test.tex
new file mode 100644
index 0000000..117f4bc
--- /dev/null
+++ b/test/issues/640/tester/test.tex
@@ -0,0 +1,13 @@
+\documentclass{article}
+\usepackage[utf8]{inputenc}
+\usepackage{graphicx}
+\graphicspath{{test} {testing}%
+  {../}
+  {../testagain/}
+}
+
+\begin{document}
+
+\includegraphics[width=0.9\linewidth]{}
+
+\end{document}
diff --git a/test/issues/640/tester/test/test.png b/test/issues/640/tester/test/test.png
new file mode 100644
index 0000000..e69de29
diff --git a/test/issues/640/tester/testing/test.eps b/test/issues/640/tester/testing/test.eps
new file mode 100644
index 0000000..e69de29