diff --git a/internal/cli/compile/compile.go b/internal/cli/compile/compile.go
index 9695bc19e98..3eb8708ed16 100644
--- a/internal/cli/compile/compile.go
+++ b/internal/cli/compile/compile.go
@@ -226,6 +226,14 @@ func runCompileCommand(cmd *cobra.Command, args []string) {
 		stdOut, stdErr, stdIORes = feedback.OutputStreams()
 	}
 
+	var libraryAbs []string
+	for _, libPath := range paths.NewPathList(library...) {
+		if libPath, err = libPath.Abs(); err != nil {
+			feedback.Fatal(tr("Error converting path to absolute: %v", err), feedback.ErrGeneric)
+		}
+		libraryAbs = append(libraryAbs, libPath.String())
+	}
+
 	compileRequest := &rpc.CompileRequest{
 		Instance:                      inst,
 		Fqbn:                          fqbn,
@@ -244,7 +252,7 @@ func runCompileCommand(cmd *cobra.Command, args []string) {
 		Clean:                         clean,
 		CreateCompilationDatabaseOnly: compilationDatabaseOnly,
 		SourceOverride:                overrides,
-		Library:                       library,
+		Library:                       libraryAbs,
 		KeysKeychain:                  keysKeychain,
 		SignKey:                       signKey,
 		EncryptKey:                    encryptKey,
diff --git a/internal/integrationtest/compile_3/compile_test.go b/internal/integrationtest/compile_3/compile_test.go
index 2af68d2b03b..11aaeceef5e 100644
--- a/internal/integrationtest/compile_3/compile_test.go
+++ b/internal/integrationtest/compile_3/compile_test.go
@@ -116,3 +116,41 @@ func TestCompilerErrOutput(t *testing.T) {
 	compilerErr := requirejson.Parse(t, out).Query(".compiler_err")
 	compilerErr.MustContain(`"error"`)
 }
+
+func TestCompileRelativeLibraryPath(t *testing.T) {
+	env, cli := integrationtest.CreateArduinoCLIWithEnvironment(t)
+	defer env.CleanUp()
+
+	// Initialize configs to enable --zip-path flag
+	_, _, err := cli.Run("config", "init", "--dest-dir", ".")
+	require.NoError(t, err)
+	_, _, err = cli.Run("config", "set", "library.enable_unsafe_install", "true", "--config-file", "arduino-cli.yaml")
+	require.NoError(t, err)
+	configFile := cli.WorkingDir().Join("arduino-cli.yaml")
+
+	_, _, err = cli.Run("core", "install", "arduino:avr")
+	require.NoError(t, err)
+
+	// Install library and its dependencies
+	zipPath, err := paths.New("..", "testdata", "FooLib.zip").Abs()
+	require.NoError(t, err)
+	// Manually install the library and move into one of the example's directories
+	FooLib := cli.WorkingDir().Join("FooLib")
+	err = paths.New("..", "testdata", "FooLib").CopyDirTo(FooLib)
+	require.NoError(t, err)
+	cli.SetWorkingDir(FooLib.Join("examples", "FooSketch"))
+
+	// Compile using a relative path to the library
+	_, _, err = cli.Run("compile", "-b", "arduino:avr:uno", "--library", "../../")
+	require.NoError(t, err)
+
+	// Install the same library using lib install and compile again using the relative path.
+	// The manually installed library should be chosen
+	_, _, err = cli.Run("lib", "install", "--zip-path", zipPath.String(), "--config-file", configFile.String())
+	require.NoError(t, err)
+	stdout, _, err := cli.Run("compile", "-b", "arduino:avr:uno", "--library", "../../", "-v")
+	require.NoError(t, err)
+	require.Contains(t, string(stdout), "Multiple libraries were found for \"FooLib.h\"")
+	require.Contains(t, string(stdout), "Used: "+FooLib.String())
+	require.Contains(t, string(stdout), "Not used: "+cli.SketchbookDir().Join("libraries", "FooLib").String())
+}
diff --git a/internal/integrationtest/testdata/FooLib.zip b/internal/integrationtest/testdata/FooLib.zip
new file mode 100644
index 00000000000..f12d87aa297
Binary files /dev/null and b/internal/integrationtest/testdata/FooLib.zip differ
diff --git a/internal/integrationtest/testdata/FooLib/ArduinoIoTCloud.cpp b/internal/integrationtest/testdata/FooLib/ArduinoIoTCloud.cpp
new file mode 100644
index 00000000000..e26b0ab556c
--- /dev/null
+++ b/internal/integrationtest/testdata/FooLib/ArduinoIoTCloud.cpp
@@ -0,0 +1 @@
+// This file intentionally left empty.
diff --git a/internal/integrationtest/testdata/FooLib/ArduinoIoTCloud.h b/internal/integrationtest/testdata/FooLib/ArduinoIoTCloud.h
new file mode 100644
index 00000000000..e26b0ab556c
--- /dev/null
+++ b/internal/integrationtest/testdata/FooLib/ArduinoIoTCloud.h
@@ -0,0 +1 @@
+// This file intentionally left empty.
diff --git a/internal/integrationtest/testdata/FooLib/FooLib.cpp b/internal/integrationtest/testdata/FooLib/FooLib.cpp
new file mode 100644
index 00000000000..e26b0ab556c
--- /dev/null
+++ b/internal/integrationtest/testdata/FooLib/FooLib.cpp
@@ -0,0 +1 @@
+// This file intentionally left empty.
diff --git a/internal/integrationtest/testdata/FooLib/FooLib.h b/internal/integrationtest/testdata/FooLib/FooLib.h
new file mode 100644
index 00000000000..e26b0ab556c
--- /dev/null
+++ b/internal/integrationtest/testdata/FooLib/FooLib.h
@@ -0,0 +1 @@
+// This file intentionally left empty.
diff --git a/internal/integrationtest/testdata/FooLib/examples/FooSketch/FooSketch.ino b/internal/integrationtest/testdata/FooLib/examples/FooSketch/FooSketch.ino
new file mode 100644
index 00000000000..ea144a785da
--- /dev/null
+++ b/internal/integrationtest/testdata/FooLib/examples/FooSketch/FooSketch.ino
@@ -0,0 +1,3 @@
+#include <FooLib.h>
+void setup() {}
+void loop() {}