diff --git a/snakemake/rules.py b/snakemake/rules.py
index 85f2a3734..1c478cbe7 100644
--- a/snakemake/rules.py
+++ b/snakemake/rules.py
@@ -787,8 +787,6 @@ def _apply_wildcards(
                     groupid=groupid,
                     **aux_params
                 )
-                if apply_path_modifier and not incomplete:
-                    item = self.apply_path_modifier(item, property=property)
 
             if is_unpack and not incomplete:
                 if not allow_unpack:
@@ -808,14 +806,14 @@ def _apply_wildcards(
                     )
                 # Allow streamlined code with/without unpack
                 if isinstance(item, list):
-                    pairs = zip([None] * len(item), item)
+                    pairs = zip([None] * len(item), item, [_is_callable] * len(item))
                 else:
                     assert isinstance(item, dict)
-                    pairs = item.items()
+                    pairs = [(name, item, _is_callable) for name, item in item.items()]
             else:
-                pairs = [(name, item)]
+                pairs = [(name, item, _is_callable)]
 
-            for name, item in pairs:
+            for name, item, from_callable in pairs:
                 is_iterable = True
                 if not_iterable(item) or no_flattening:
                     item = [item]
@@ -829,6 +827,10 @@ def _apply_wildcards(
                         raise WorkflowError(
                             "Function did not return str or list " "of str.", rule=self
                         )
+
+                    if from_callable and apply_path_modifier and not incomplete:
+                        item_ = self.apply_path_modifier(item_, property=property)
+
                     concrete = concretize(item_, wildcards, _is_callable)
                     newitems.append(concrete)
                     if mapping is not None:
diff --git a/tests/test_github_issue1396/Snakefile b/tests/test_github_issue1396/Snakefile
new file mode 100644
index 000000000..434704d7f
--- /dev/null
+++ b/tests/test_github_issue1396/Snakefile
@@ -0,0 +1,16 @@
+def get_files(wildcards):
+    files_1 = expand("file_{i}", i=list(range(1, 5)))
+    files_2 = expand("file_{i}", i=list(range(5, 9)))
+    return {"files_1": files_1, "files_2": files_2}
+
+
+rule all:
+    input:
+        unpack(get_files),
+
+
+rule make_files:
+    output:
+        expand("file_{i}", i=list(range(1, 9))),
+    shell:
+        "touch {output}"
diff --git a/tests/test_github_issue1396/expected-results/.gitkeep b/tests/test_github_issue1396/expected-results/.gitkeep
new file mode 100644
index 000000000..e69de29bb
diff --git a/tests/test_google_lifesciences.py b/tests/test_google_lifesciences.py
index 47f34d0cb..4c6366e95 100644
--- a/tests/test_google_lifesciences.py
+++ b/tests/test_google_lifesciences.py
@@ -109,3 +109,20 @@ def test_cloud_checkpoints_issue574():
         )
     finally:
         cleanup_google_storage(storage_prefix, bucket_name)
+
+
+def test_github_issue1396():
+    bucket_name = "snakemake-testing-%s" % next(tempfile._get_candidate_names())
+    create_google_storage(bucket_name)
+    storage_prefix = "test_github_issue1396"
+    workdir = dpath("test_github_issue1396")
+    try:
+        run(
+            workdir,
+            default_remote_prefix="%s/%s" % (bucket_name, storage_prefix),
+            google_lifesciences=True,
+            google_lifesciences_cache=False,
+            dryrun=True,
+        )
+    finally:
+        cleanup_google_storage(storage_prefix, bucket_name)