diff --git a/src/Microsoft.DotNet.Cli.Utils/PathUtility.cs b/src/Microsoft.DotNet.Cli.Utils/PathUtility.cs
index 32620e0d59..df4ab26aad 100644
--- a/src/Microsoft.DotNet.Cli.Utils/PathUtility.cs
+++ b/src/Microsoft.DotNet.Cli.Utils/PathUtility.cs
@@ -119,6 +119,11 @@ public static string GetRelativePath(DirectoryInfo directory, FileSystemInfo chi
         /// </summary>
         public static string GetRelativePath(string path1, string path2)
         {
+            if (!Path.IsPathRooted(path1) || !Path.IsPathRooted(path2))
+            {
+                throw new ArgumentException("both paths need to be rooted/full path");
+            }
+
             return GetRelativePath(path1, path2, Path.DirectorySeparatorChar, true);
         }
 
diff --git a/src/dotnet/ShellShim/AppHostShimMaker.cs b/src/dotnet/ShellShim/AppHostShimMaker.cs
index 9b5eaf2de1..80fb191527 100644
--- a/src/dotnet/ShellShim/AppHostShimMaker.cs
+++ b/src/dotnet/ShellShim/AppHostShimMaker.cs
@@ -39,8 +39,8 @@ public void CreateApphostShellShim(FilePath entryPoint, FilePath shimPath)
                 appHostSourcePath = Path.Combine(_appHostSourceDirectory, ApphostNameWithoutExtension);
             }
 
-            var appHostDestinationFilePath = shimPath.Value;
-            var appBinaryFilePath = PathUtility.GetRelativePath(appHostDestinationFilePath, entryPoint.Value);
+            var appHostDestinationFilePath = Path.GetFullPath(shimPath.Value);
+            var appBinaryFilePath = Path.GetRelativePath(Path.GetDirectoryName(appHostDestinationFilePath), Path.GetFullPath(entryPoint.Value));
 
             EmbedAppNameInHost.EmbedAndReturnModifiedAppHostPath(
                 appHostSourceFilePath: appHostSourcePath,
diff --git a/test/Microsoft.DotNet.ShellShim.Tests/ShellShimRepositoryTests.cs b/test/Microsoft.DotNet.ShellShim.Tests/ShellShimRepositoryTests.cs
index 90a3bb83dc..54b0266a3d 100644
--- a/test/Microsoft.DotNet.ShellShim.Tests/ShellShimRepositoryTests.cs
+++ b/test/Microsoft.DotNet.ShellShim.Tests/ShellShimRepositoryTests.cs
@@ -45,6 +45,27 @@ public void GivenAnExecutablePathItCanGenerateShimFile()
             stdOut.Should().Contain("Hello World");
         }
 
+        // Reproduce https://github.com/dotnet/cli/issues/9319
+        [Fact]
+        public void GivenAnExecutableAndRelativePathToShimPathItCanGenerateShimFile()
+        {
+            var outputDll = MakeHelloWorldExecutableDll("GivenAnExecutableAndRelativePath");
+            // To reproduce the bug, dll need to be nested under the shim
+            var parentPathAsShimPath = outputDll.GetDirectoryPath().GetParentPath().GetParentPath().Value;
+            var relativePathToShim = Path.GetRelativePath(
+                Directory.GetCurrentDirectory(),
+                parentPathAsShimPath);
+
+            ShellShimRepository shellShimRepository = ConfigBasicTestDependecyShellShimRepository(relativePathToShim);
+            var shellCommandName = nameof(ShellShimRepositoryTests) + Path.GetRandomFileName();
+
+            shellShimRepository.CreateShim(outputDll, shellCommandName);
+
+            var stdOut = ExecuteInShell(shellCommandName, relativePathToShim);
+
+            stdOut.Should().Contain("Hello World");
+        }
+
         private static ShellShimRepository ConfigBasicTestDependecyShellShimRepository(string pathToShim)
         {
             string stage2AppHostTemplateDirectory = GetAppHostTemplateFromStage2();
@@ -473,13 +494,19 @@ private static string GetAppHostTemplateFromStage2()
             return stage2AppHostTemplateDirectory;
         }
 
-        private static FilePath MakeHelloWorldExecutableDll()
+        private static FilePath MakeHelloWorldExecutableDll(string instanceName = null)
         {
             const string testAppName = "TestAppSimple";
             const string emptySpaceToTestSpaceInPath = " ";
             const string directoryNamePostFix = "Test";
+
+            if (instanceName == null)
+            {
+                instanceName = testAppName + emptySpaceToTestSpaceInPath + directoryNamePostFix;
+            }
+
             TestAssetInstance testInstance = TestAssets.Get(testAppName)
-                .CreateInstance(testAppName + emptySpaceToTestSpaceInPath + directoryNamePostFix)
+                .CreateInstance(instanceName)
                 .UseCurrentRuntimeFrameworkVersion()
                 .WithRestoreFiles()
                 .WithBuildFiles();