diff --git a/compiler/test/TestCompilerOnExamples.kt b/compiler/test/TestCompilerOnExamples.kt
index e4d9a2254..0caa4d08c 100644
--- a/compiler/test/TestCompilerOnExamples.kt
+++ b/compiler/test/TestCompilerOnExamples.kt
@@ -32,8 +32,12 @@ class TestCompilerOnExamples {
         if (platform == Cx16Target) {
             searchIn.add(0, assumeDirectory(examplesDir, "cx16"))
         }
-        val filepath = searchIn.map { it.resolve("$name.p8") }.first { it.exists() }
-        val displayName = "${examplesDir.relativize(filepath)}: ${platform.name}, optimize=$optimize"
+        val filepath = searchIn
+            .map { it.resolve("$name.p8") }
+            .map { it.normalize().absolute() }
+            .map { workingDir.relativize(it) }
+            .first { it.exists() }
+        val displayName = "${examplesDir.relativize(filepath.absolute())}: ${platform.name}, optimize=$optimize"
         return dynamicTest(displayName) {
             compileProgram(
                 filepath,
diff --git a/compiler/test/TestCompilerOptionLibdirs.kt b/compiler/test/TestCompilerOptionLibdirs.kt
new file mode 100644
index 000000000..4e577a085
--- /dev/null
+++ b/compiler/test/TestCompilerOptionLibdirs.kt
@@ -0,0 +1,94 @@
+package prog8tests
+
+import org.junit.jupiter.api.TestInstance
+import org.junit.jupiter.api.Test
+import org.junit.jupiter.api.BeforeAll
+import org.junit.jupiter.api.AfterAll
+import prog8tests.helpers.*
+import kotlin.io.path.*
+import java.nio.file.Path
+
+import prog8.compiler.compileProgram
+import prog8.compiler.target.*
+
+/**
+ * ATTENTION: this is just kludge!
+ * They are not really unit tests, but rather tests of the whole process,
+ * from source file loading all the way through to running 64tass.
+ */
+@TestInstance(TestInstance.Lifecycle.PER_CLASS)
+class TestCompilerOptionLibdirs {
+
+    private lateinit var tempFileInWorkingDir: Path
+
+    @BeforeAll
+    fun setUp() {
+        tempFileInWorkingDir = createTempFile(directory = workingDir, prefix = "tmp_", suffix = ".p8")
+            .also { it.writeText("""
+                main {
+                    sub start() {
+                    }
+                }
+            """)}
+    }
+
+    @AfterAll
+    fun tearDown() {
+        tempFileInWorkingDir.deleteExisting()
+    }
+
+    private fun compileFile(filePath: Path, libdirs: List<String>) =
+        compileProgram(
+            filepath = filePath,
+            optimize = false,
+            writeAssembly = true,
+            slowCodegenWarnings = false,
+            compilationTarget = Cx16Target.name,
+            libdirs,
+            outputDir
+        )
+
+    @Test
+    fun testAbsoluteFilePathInWorkingDir() {
+        val filepath = assumeReadableFile(tempFileInWorkingDir.absolute())
+        compileFile(filepath, listOf())
+            .assertSuccess()
+    }
+
+    @Test
+    fun testFilePathInWorkingDirRelativeToWorkingDir() {
+        val filepath = assumeReadableFile(workingDir.relativize(tempFileInWorkingDir.absolute()))
+        compileFile(filepath, listOf())
+            .assertSuccess()
+    }
+
+    @Test
+    fun testFilePathInWorkingDirRelativeTo1stInLibdirs() {
+        val filepath = assumeReadableFile(tempFileInWorkingDir)
+        compileFile(filepath.fileName, listOf(workingDir.toString()))
+            .assertSuccess()
+    }
+
+    @Test
+    fun testAbsoluteFilePathOutsideWorkingDir() {
+        val filepath = assumeReadableFile(fixturesDir, "simple_main.p8")
+        compileFile(filepath.absolute(), listOf())
+            .assertSuccess()
+    }
+
+    @Test
+    fun testFilePathOutsideWorkingDirRelativeToWorkingDir() {
+        val filepath = workingDir.relativize(assumeReadableFile(fixturesDir, "simple_main.p8").absolute())
+        compileFile(filepath, listOf())
+            .assertSuccess()
+    }
+
+    @Test
+    fun testFilePathOutsideWorkingDirRelativeTo1stInLibdirs() {
+        val filepath = assumeReadableFile(fixturesDir, "simple_main.p8")
+        val libdirs = listOf("$fixturesDir")
+        compileFile(filepath.fileName, libdirs)
+            .assertSuccess()
+    }
+
+}
diff --git a/compiler/test/fixtures/simple_main.p8 b/compiler/test/fixtures/simple_main.p8
new file mode 100644
index 000000000..afaa79f93
--- /dev/null
+++ b/compiler/test/fixtures/simple_main.p8
@@ -0,0 +1,4 @@
+main {
+	sub start() {
+	}
+}
diff --git a/compilerAst/test/helpers/paths.kt b/compilerAst/test/helpers/paths.kt
index 0e005cde5..85b29fb26 100644
--- a/compilerAst/test/helpers/paths.kt
+++ b/compilerAst/test/helpers/paths.kt
@@ -46,6 +46,6 @@ fun assumeDirectory(path: Path, other: String): Path = assumeDirectory(path.div(
 
 @Deprecated("Directories are checked automatically at init.",
     ReplaceWith("/* nothing */"))
-@Suppress("unused")
+@Suppress("UNUSED_PARAMETER")
 fun sanityCheckDirectories(workingDirName: String? = null) {
 }
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