diff --git a/.github/workflows/test.yml b/.github/workflows/test.yml
index 9506f07..45f9870 100644
--- a/.github/workflows/test.yml
+++ b/.github/workflows/test.yml
@@ -584,6 +584,28 @@ jobs:
             exit 1
           fi
 
+  test-relative-path:
+    runs-on: ubuntu-latest
+    steps:
+      - uses: actions/checkout@v4
+      - name: mkdir
+        run: mkdir -p /tmp/setup-uv-test-relative-path
+      - name: Create requirements.txt
+        run: echo "uv==0.6.17" > /tmp/setup-uv-test-relative-path/setup-uv-requirements.txt
+      - name: Install from requirements file
+        id: setup-uv
+        uses: ./
+        with:
+          version-file: "./setup-uv-requirements.txt"
+          working-directory: "/tmp/setup-uv-test-relative-path"
+          cache-dependency-glob: "./setup-uv-requirements.txt"
+      - name: Correct version gets installed
+        run: |
+          if [ "$(uv --version)" != "uv 0.6.17" ]; then
+            echo "Wrong uv version: $(uv --version)"
+            exit 1
+          fi
+
   all-tests-passed:
     runs-on: ubuntu-latest
     needs:
@@ -619,6 +641,7 @@ jobs:
       - test-no-python-version
       - test-custom-manifest-file
       - test-absolute-path
+      - test-relative-path
     if: always()
     steps:
       - name: All tests passed
diff --git a/dist/save-cache/index.js b/dist/save-cache/index.js
index 242308a..b2466b7 100644
--- a/dist/save-cache/index.js
+++ b/dist/save-cache/index.js
@@ -88998,14 +88998,14 @@ var __importDefault = (this && this.__importDefault) || function (mod) {
     return (mod && mod.__esModule) ? mod : { "default": mod };
 };
 Object.defineProperty(exports, "__esModule", ({ value: true }));
-exports.manifestFile = exports.githubToken = exports.serverUrl = exports.toolDir = exports.toolBinDir = exports.ignoreEmptyWorkdir = exports.ignoreNothingToCache = exports.pruneCache = exports.cacheDependencyGlob = exports.cacheLocalPath = exports.cacheSuffix = exports.enableCache = exports.checkSum = exports.workingDirectory = exports.activateEnvironment = exports.pythonVersion = exports.versionFile = exports.version = void 0;
+exports.manifestFile = exports.githubToken = exports.serverUrl = exports.toolDir = exports.toolBinDir = exports.ignoreEmptyWorkdir = exports.ignoreNothingToCache = exports.pruneCache = exports.cacheDependencyGlob = exports.cacheLocalPath = exports.cacheSuffix = exports.enableCache = exports.checkSum = exports.activateEnvironment = exports.pythonVersion = exports.versionFile = exports.version = exports.workingDirectory = void 0;
 const core = __importStar(__nccwpck_require__(7484));
 const node_path_1 = __importDefault(__nccwpck_require__(6760));
+exports.workingDirectory = core.getInput("working-directory");
 exports.version = core.getInput("version");
-exports.versionFile = core.getInput("version-file");
+exports.versionFile = getVersionFile();
 exports.pythonVersion = core.getInput("python-version");
 exports.activateEnvironment = core.getBooleanInput("activate-environment");
-exports.workingDirectory = core.getInput("working-directory");
 exports.checkSum = core.getInput("checksum");
 exports.enableCache = getEnableCache();
 exports.cacheSuffix = core.getInput("cache-suffix") || "";
@@ -89019,6 +89019,14 @@ exports.toolDir = getToolDir();
 exports.serverUrl = core.getInput("server-url");
 exports.githubToken = core.getInput("github-token");
 exports.manifestFile = getManifestFile();
+function getVersionFile() {
+    const versionFileInput = core.getInput("version-file");
+    if (versionFileInput !== "") {
+        const tildeExpanded = expandTilde(versionFileInput);
+        return resolveRelativePath(tildeExpanded);
+    }
+    return versionFileInput;
+}
 function getEnableCache() {
     const enableCacheInput = core.getInput("enable-cache");
     if (enableCacheInput === "auto") {
@@ -89093,7 +89101,11 @@ function resolveRelativePath(inputPath) {
     if (node_path_1.default.isAbsolute(inputPath)) {
         return inputPath;
     }
-    const absolutePath = `${exports.workingDirectory}${node_path_1.default.sep}${inputPath}`;
+    let absolutePath = inputPath;
+    if (absolutePath.startsWith("./")) {
+        absolutePath = absolutePath.substring(2);
+    }
+    absolutePath = `${exports.workingDirectory}${node_path_1.default.sep}${absolutePath}`;
     core.debug(`Resolving relative path ${inputPath} to ${absolutePath}`);
     return absolutePath;
 }
diff --git a/dist/setup/index.js b/dist/setup/index.js
index be2d838..65e7c4c 100644
--- a/dist/setup/index.js
+++ b/dist/setup/index.js
@@ -125522,14 +125522,14 @@ var __importDefault = (this && this.__importDefault) || function (mod) {
     return (mod && mod.__esModule) ? mod : { "default": mod };
 };
 Object.defineProperty(exports, "__esModule", ({ value: true }));
-exports.manifestFile = exports.githubToken = exports.serverUrl = exports.toolDir = exports.toolBinDir = exports.ignoreEmptyWorkdir = exports.ignoreNothingToCache = exports.pruneCache = exports.cacheDependencyGlob = exports.cacheLocalPath = exports.cacheSuffix = exports.enableCache = exports.checkSum = exports.workingDirectory = exports.activateEnvironment = exports.pythonVersion = exports.versionFile = exports.version = void 0;
+exports.manifestFile = exports.githubToken = exports.serverUrl = exports.toolDir = exports.toolBinDir = exports.ignoreEmptyWorkdir = exports.ignoreNothingToCache = exports.pruneCache = exports.cacheDependencyGlob = exports.cacheLocalPath = exports.cacheSuffix = exports.enableCache = exports.checkSum = exports.activateEnvironment = exports.pythonVersion = exports.versionFile = exports.version = exports.workingDirectory = void 0;
 const core = __importStar(__nccwpck_require__(37484));
 const node_path_1 = __importDefault(__nccwpck_require__(76760));
+exports.workingDirectory = core.getInput("working-directory");
 exports.version = core.getInput("version");
-exports.versionFile = core.getInput("version-file");
+exports.versionFile = getVersionFile();
 exports.pythonVersion = core.getInput("python-version");
 exports.activateEnvironment = core.getBooleanInput("activate-environment");
-exports.workingDirectory = core.getInput("working-directory");
 exports.checkSum = core.getInput("checksum");
 exports.enableCache = getEnableCache();
 exports.cacheSuffix = core.getInput("cache-suffix") || "";
@@ -125543,6 +125543,14 @@ exports.toolDir = getToolDir();
 exports.serverUrl = core.getInput("server-url");
 exports.githubToken = core.getInput("github-token");
 exports.manifestFile = getManifestFile();
+function getVersionFile() {
+    const versionFileInput = core.getInput("version-file");
+    if (versionFileInput !== "") {
+        const tildeExpanded = expandTilde(versionFileInput);
+        return resolveRelativePath(tildeExpanded);
+    }
+    return versionFileInput;
+}
 function getEnableCache() {
     const enableCacheInput = core.getInput("enable-cache");
     if (enableCacheInput === "auto") {
@@ -125617,7 +125625,11 @@ function resolveRelativePath(inputPath) {
     if (node_path_1.default.isAbsolute(inputPath)) {
         return inputPath;
     }
-    const absolutePath = `${exports.workingDirectory}${node_path_1.default.sep}${inputPath}`;
+    let absolutePath = inputPath;
+    if (absolutePath.startsWith("./")) {
+        absolutePath = absolutePath.substring(2);
+    }
+    absolutePath = `${exports.workingDirectory}${node_path_1.default.sep}${absolutePath}`;
     core.debug(`Resolving relative path ${inputPath} to ${absolutePath}`);
     return absolutePath;
 }
diff --git a/src/utils/inputs.ts b/src/utils/inputs.ts
index a164221..63d87c7 100644
--- a/src/utils/inputs.ts
+++ b/src/utils/inputs.ts
@@ -1,11 +1,11 @@
 import * as core from "@actions/core";
 import path from "node:path";
 
+export const workingDirectory = core.getInput("working-directory");
 export const version = core.getInput("version");
-export const versionFile = core.getInput("version-file");
+export const versionFile = getVersionFile();
 export const pythonVersion = core.getInput("python-version");
 export const activateEnvironment = core.getBooleanInput("activate-environment");
-export const workingDirectory = core.getInput("working-directory");
 export const checkSum = core.getInput("checksum");
 export const enableCache = getEnableCache();
 export const cacheSuffix = core.getInput("cache-suffix") || "";
@@ -22,6 +22,15 @@ export const serverUrl = core.getInput("server-url");
 export const githubToken = core.getInput("github-token");
 export const manifestFile = getManifestFile();
 
+function getVersionFile(): string {
+  const versionFileInput = core.getInput("version-file");
+  if (versionFileInput !== "") {
+    const tildeExpanded = expandTilde(versionFileInput);
+    return resolveRelativePath(tildeExpanded);
+  }
+  return versionFileInput;
+}
+
 function getEnableCache(): boolean {
   const enableCacheInput = core.getInput("enable-cache");
   if (enableCacheInput === "auto") {
@@ -108,7 +117,11 @@ function resolveRelativePath(inputPath: string): string {
   if (path.isAbsolute(inputPath)) {
     return inputPath;
   }
-  const absolutePath = `${workingDirectory}${path.sep}${inputPath}`;
+  let absolutePath = inputPath;
+  if (absolutePath.startsWith("./")) {
+    absolutePath = absolutePath.substring(2);
+  }
+  absolutePath = `${workingDirectory}${path.sep}${absolutePath}`;
   core.debug(`Resolving relative path ${inputPath} to ${absolutePath}`);
   return absolutePath;
 }