diff --git a/.changeset/slimy-singers-return.md b/.changeset/slimy-singers-return.md
new file mode 100644
index 0000000000..c5fc60aaa2
--- /dev/null
+++ b/.changeset/slimy-singers-return.md
@@ -0,0 +1,5 @@
+---
+'@backstage/plugin-scaffolder-backend': patch
+---
+
+Fixed file path resolution for templates with a file location
diff --git a/plugins/scaffolder-backend/src/scaffolder/tasks/TemplateConverter.ts b/plugins/scaffolder-backend/src/scaffolder/tasks/TemplateConverter.ts
index 8019b676b5..7f76ac33d0 100644
--- a/plugins/scaffolder-backend/src/scaffolder/tasks/TemplateConverter.ts
+++ b/plugins/scaffolder-backend/src/scaffolder/tasks/TemplateConverter.ts
@@ -14,7 +14,7 @@
  * limitations under the License.
  */
 
-import { resolve as resolvePath } from 'path';
+import { resolve as resolvePath, dirname } from 'path';
 import { JsonValue } from '@backstage/config';
 import { TemplateEntityV1alpha1 } from '@backstage/catalog-model';
 import { Logger } from 'winston';
@@ -39,7 +39,7 @@ export function templateEntityToSpec(
 
   let url: string;
   if (protocol === 'file') {
-    const path = resolvePath(location, template.spec.path || '.');
+    const path = resolvePath(dirname(location), template.spec.path || '.');
 
     url = `file://${path}`;
   } else {