diff --git a/build_tests/sh/sh.rb b/build_tests/typical/sh.rb
similarity index 100%
rename from build_tests/sh/sh.rb
rename to build_tests/typical/sh.rb
diff --git a/build_tests/typical/sh_chdir.rb b/build_tests/typical/sh_chdir.rb
new file mode 100644
index 0000000..c177a0b
--- /dev/null
+++ b/build_tests/typical/sh_chdir.rb
@@ -0,0 +1,3 @@
+default do
+  sh "pwd", chdir: "src"
+end
diff --git a/build_tests/sh/sh_fail.rb b/build_tests/typical/sh_fail.rb
similarity index 100%
rename from build_tests/sh/sh_fail.rb
rename to build_tests/typical/sh_fail.rb
diff --git a/build_tests/sh/sh_fail_continue.rb b/build_tests/typical/sh_fail_continue.rb
similarity index 100%
rename from build_tests/sh/sh_fail_continue.rb
rename to build_tests/typical/sh_fail_continue.rb
diff --git a/lib/rscons/script.rb b/lib/rscons/script.rb
index fc68cda..5bd85db 100644
--- a/lib/rscons/script.rb
+++ b/lib/rscons/script.rb
@@ -211,6 +211,7 @@ module Rscons
         if command.last.is_a?(Hash)
           options = command.slice!(-1)
         end
+        continue = options.delete(:continue)
         if command.size == 1 && command[0].is_a?(Array)
           command = command[0]
         end
@@ -222,10 +223,10 @@ module Rscons
           end
         end
         begin
-          system(*command, exception: true)
+          system(*command, options.merge(exception: true))
         rescue StandardError => e
           message = "#{e.backtrace[2]}: #{e.message}"
-          if options[:continue]
+          if continue
             Ansi.write($stderr, :red, message, :reset, "\n")
           else
             raise RsconsError.new(message)
diff --git a/spec/build_tests_spec.rb b/spec/build_tests_spec.rb
index b453fd5..7bb34d4 100644
--- a/spec/build_tests_spec.rb
+++ b/spec/build_tests_spec.rb
@@ -2789,7 +2789,7 @@ EOF
 
   context "sh method" do
     it "executes the command given" do
-      test_dir "sh"
+      test_dir "typical"
       result = run_rscons(args: %w[-f sh.rb])
       expect(result.stderr).to eq ""
       expect(result.status).to eq 0
@@ -2799,8 +2799,16 @@ EOF
       ])
     end
 
+    it "changes directory to execute the requested command" do
+      test_dir "typical"
+      result = run_rscons(args: %w[-f sh_chdir.rb])
+      expect(result.stderr).to eq ""
+      expect(result.status).to eq 0
+      expect(result.stdout).to match %r{/src$}
+    end
+
     it "prints the command when executing verbosely" do
-      test_dir "sh"
+      test_dir "typical"
       result = run_rscons(args: %w[-f sh.rb -v])
       expect(result.stderr).to eq ""
       expect(result.status).to eq 0
@@ -2813,7 +2821,7 @@ EOF
     end
 
     it "terminates execution on failure" do
-      test_dir "sh"
+      test_dir "typical"
       result = run_rscons(args: %w[-f sh_fail.rb])
       expect(result.stderr).to match /sh_fail\.rb:2:.*foobar42/
       expect(result.status).to_not eq 0
@@ -2821,7 +2829,7 @@ EOF
     end
 
     it "continues execution on failure when :continue option is set" do
-      test_dir "sh"
+      test_dir "typical"
       result = run_rscons(args: %w[-f sh_fail_continue.rb])
       expect(result.stderr).to match /sh_fail_continue\.rb:2:.*foobar42/
       expect(result.status).to eq 0