diff --git a/cmd/jb/install.go b/cmd/jb/install.go
index c3b22b1..a973af6 100644
--- a/cmd/jb/install.go
+++ b/cmd/jb/install.go
@@ -46,7 +46,7 @@ func installCommand(dir, jsonnetHome string, paths ...string) int {
 
 	if len(paths) > 0 {
 		for _, path := range paths {
-			newDep := parseDependency(path)
+			newDep := parseDependency(dir, path)
 			if newDep == nil {
 				kingpin.Errorf("ignoring unrecognized path: %s", path)
 				continue
diff --git a/cmd/jb/install_test.go b/cmd/jb/install_test.go
index 3c06d64..e3a359f 100644
--- a/cmd/jb/install_test.go
+++ b/cmd/jb/install_test.go
@@ -49,8 +49,8 @@ func TestInstallCommand(t *testing.T) {
 			Name:                    "Relative",
 			URLs:                    []string{"test/jsonnet/foobar"},
 			ExpectedCode:            0,
-			ExpectedJsonnetFile:     []byte(`{"dependencies":null}`),
-			ExpectedJsonnetLockFile: []byte(`{"dependencies":null}`),
+			ExpectedJsonnetFile:     []byte(`{"dependencies": [{"name": "foobar", "source": {"local": {"directory": "test/jsonnet/foobar"}}, "version": ""}]}`),
+			ExpectedJsonnetLockFile: []byte(`{"dependencies": [{"name": "foobar", "source": {"local": {"directory": "test/jsonnet/foobar"}}, "version": ""}]}`),
 		},
 	}
 
@@ -81,6 +81,8 @@ func TestInstallCommand(t *testing.T) {
 }
 
 func jsonnetFileContent(t *testing.T, filename string, content []byte) {
+	t.Helper()
+
 	bytes, err := ioutil.ReadFile(filename)
 	assert.NoError(t, err)
 	if eq := assert.JSONEq(t, string(content), string(bytes)); !eq {
diff --git a/cmd/jb/main.go b/cmd/jb/main.go
index f7137f1..67366ec 100644
--- a/cmd/jb/main.go
+++ b/cmd/jb/main.go
@@ -93,7 +93,7 @@ func Main() int {
 	return 0
 }
 
-func parseDependency(path string) *spec.Dependency {
+func parseDependency(dir, path string) *spec.Dependency {
 	if d := parseGitSSHDependency(path); d != nil {
 		return d
 	}
@@ -102,7 +102,7 @@ func parseDependency(path string) *spec.Dependency {
 		return d
 	}
 
-	if d := parseLocalDependency(path); d != nil {
+	if d := parseLocalDependency(dir, path); d != nil {
 		return d
 	}
 
@@ -211,7 +211,7 @@ func parseGithubDependency(p string) *spec.Dependency {
 	}
 }
 
-func parseLocalDependency(p string) *spec.Dependency {
+func parseLocalDependency(dir, p string) *spec.Dependency {
 	if p == "" {
 		return nil
 	}
@@ -223,8 +223,9 @@ func parseLocalDependency(p string) *spec.Dependency {
 	}
 
 	clean := filepath.Clean(p)
+	abs := filepath.Join(dir, clean)
 
-	info, err := os.Stat(clean)
+	info, err := os.Stat(abs)
 	if err != nil {
 		return nil
 	}
diff --git a/cmd/jb/main_test.go b/cmd/jb/main_test.go
index 594264f..3a4007e 100644
--- a/cmd/jb/main_test.go
+++ b/cmd/jb/main_test.go
@@ -89,7 +89,7 @@ func TestParseDependency(t *testing.T) {
 	}
 	for _, tt := range tests {
 		_ = t.Run(tt.name, func(t *testing.T) {
-			dependency := parseDependency(tt.path)
+			dependency := parseDependency("", tt.path)
 
 			if tt.path == "" {
 				assert.Nil(t, dependency)