diff --git a/gunicorn/app/djangoapp.py b/gunicorn/app/djangoapp.py
index 34d511e2..aa46d513 100644
--- a/gunicorn/app/djangoapp.py
+++ b/gunicorn/app/djangoapp.py
@@ -33,28 +33,11 @@ class DjangoApplication(Application):
 
         if not self.settings_modname:
             project_name = os.path.split(self.project_path)[-1]
-            settings_name, ext  = os.path.splitext(os.path.basename(settings_path))
+            settings_name, ext  = os.path.splitext(
+                    os.path.basename(settings_path))
             self.settings_modname = "%s.%s" % (project_name, settings_name)
             os.environ[ENVIRONMENT_VARIABLE] = self.settings_modname
-        else:
-            # try to check if we can import settings already.
-            try:
-                import settings
-            except ImportError:
-                # test if we are already in the project
-                # if not we try to use to find the module in current
-                # directory
-                project_path, settings_name = self.settings_modname.split(".")
-                aproject_path = os.path.abspath(os.path.join(os.getcwd(), 
-                    "..", project_path))
-                
-                if aproject_path != self.project_path:
-                    self.project_path = os.path.join(self.project_path,
-                        project_path)
-                    if not os.path.exists(self.project_path):
-                        return self.no_settings(self.project_path,
-                                import_error=True)
-
+        
         self.cfg.set("default_proc_name", self.settings_modname)
 
         # add the project path to sys.path
@@ -67,8 +50,16 @@ class DjangoApplication(Application):
     def setup_environ(self):
         from django.core.management import setup_environ
         try:
-            import settings
-            setup_environ(settings)
+            parts = self.settings_modname.split(".")
+            settings_mod = __import__(self.settings_modname)
+            if len(parts) > 1:
+                settings_mod = __import__(parts[0])
+                path = os.path.dirname(os.path.abspath(
+                            os.path.normpath(settings_mod.__file__)))
+                sys.path.append(path)
+                for part in parts[1:]: 
+                    settings_mod = getattr(settings_mod, part)
+                setup_environ(settings_mod)
         except ImportError, e:
             return self.no_settings(self.settings_modname, import_error=True)