diff --git a/CHANGELOG.md b/CHANGELOG.md
index 1154d7b77..f0c07f431 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -2,6 +2,8 @@
 
 ## Unreleased
 
+- Changes to xWebVirtualDirectory
+  - Update on how Virtual directory are tested to correct the issue ([issue #331](https://github.com/PowerShell/xWebAdministration/issues/331)).
 - Changes to xWebAdministration
   - Resolved custom Script Analyzer rules that was added to the test framework.
   - Moved change log from README.md to a separate CHANGELOG.md ([issue #446](https://github.com/PowerShell/xWebAdministration/issues/446)).
diff --git a/DSCResources/MSFT_xWebVirtualDirectory/MSFT_xWebVirtualDirectory.psm1 b/DSCResources/MSFT_xWebVirtualDirectory/MSFT_xWebVirtualDirectory.psm1
index 98d7cadb1..b02b018a5 100644
--- a/DSCResources/MSFT_xWebVirtualDirectory/MSFT_xWebVirtualDirectory.psm1
+++ b/DSCResources/MSFT_xWebVirtualDirectory/MSFT_xWebVirtualDirectory.psm1
@@ -49,9 +49,16 @@ function Get-TargetResource
 
     Assert-Module
 
+    if ($null -eq $WebApplication -OR $WebApplication.Length -eq 0)
+    {
+        $virtualDirectoryName = $Name
+    }
+    else {
+        $virtualDirectoryName = "/$($WebApplication)/$($Name)"
+    }
     $virtualDirectory = Get-WebVirtualDirectory -Site $Website `
-                                                -Name $Name `
-                                                -Application $WebApplication
+                                                -Name $virtualDirectoryName `
+                                                -Application ""
 
     $PhysicalPath = ''
     $Ensure = 'Absent'
@@ -111,9 +118,16 @@ function Set-TargetResource
 
     if ($Ensure -eq 'Present')
     {
+        if ($null -eq $WebApplication -OR $WebApplication.Length -eq 0)
+        {
+            $virtualDirectoryName = $Name
+        }
+        else {
+            $virtualDirectoryName = "/$($WebApplication)/$($Name)"
+        }
         $virtualDirectory = Get-WebVirtualDirectory -Site $Website `
-                                                    -Name $Name `
-                                                    -Application $WebApplication
+                                                    -Name $virtualDirectoryName `
+                                                    -Application ""
         if ($virtualDirectory.count -eq 0)
         {
             Write-Verbose -Message ($LocalizedData.VerboseSetTargetCreateVirtualDirectory -f $Name)
@@ -186,9 +200,16 @@ function Test-TargetResource
 
     Assert-Module
 
+    if ($null -eq $WebApplication -OR $WebApplication.Length -eq 0)
+    {
+        $virtualDirectoryName = $Name
+    }
+    else {
+        $virtualDirectoryName = "/$($WebApplication)/$($Name)"
+    }
     $virtualDirectory = Get-WebVirtualDirectory -Site $Website `
-                                                -Name $Name `
-                                                -Application $WebApplication
+                                                -Name $virtualDirectoryName `
+                                                -Application ""
 
     if ($virtualDirectory.Count -eq 1 -and $Ensure -eq 'Present')
     {