diff --git a/src/poetry/installation/executor.py b/src/poetry/installation/executor.py
index af9cf784a1e..40edcc354c6 100644
--- a/src/poetry/installation/executor.py
+++ b/src/poetry/installation/executor.py
@@ -922,7 +922,7 @@ def _create_file_url_reference(self, package: Package) -> dict[str, Any]:
 
         assert package.source_url is not None
         return {
-            "url": Path(package.source_url).as_uri(),
+            "url": self._path_to_file_url(package.source_url),
             "archive_info": archive_info,
         }
 
@@ -934,10 +934,18 @@ def _create_directory_url_reference(self, package: Package) -> dict[str, Any]:
 
         assert package.source_url is not None
         return {
-            "url": Path(package.source_url).as_uri(),
+            "url": self._path_to_file_url(package.source_url),
             "dir_info": dir_info,
         }
 
+    @staticmethod
+    def _path_to_file_url(path: str) -> str:
+        source = Path(path)
+        if not source.is_absolute():
+            source = source.resolve()
+
+        return source.as_uri()
+
     def _get_archive_info(self, package: Package) -> dict[str, Any]:
         """
         Create dictionary `archive_info` for file `direct_url.json`.
diff --git a/tests/installation/test_executor.py b/tests/installation/test_executor.py
index 08aa1bf294b..baeac76fca0 100644
--- a/tests/installation/test_executor.py
+++ b/tests/installation/test_executor.py
@@ -949,6 +949,41 @@ def test_executor_should_write_pep610_url_references_for_directories(
     assert not prepare_spy.spy_return.exists(), "archive not cleaned up"
 
 
+def test_executor_should_create_pep610_url_reference_for_relative_directory(
+    tmp_path: Path, monkeypatch: pytest.MonkeyPatch
+) -> None:
+    source = tmp_path / "source"
+    source.mkdir()
+    monkeypatch.chdir(tmp_path)
+
+    package = Package("demo", "0.1.2", source_type="directory", source_url="source")
+
+    executor = object.__new__(Executor)
+
+    assert executor._create_directory_url_reference(package) == {
+        "dir_info": {},
+        "url": source.as_uri(),
+    }
+
+
+def test_executor_should_create_pep610_url_reference_for_relative_file(
+    tmp_path: Path, monkeypatch: pytest.MonkeyPatch
+) -> None:
+    source = tmp_path / "source.tar.gz"
+    source.write_bytes(b"archive")
+    monkeypatch.chdir(tmp_path)
+
+    package = Package("demo", "0.1.2", source_type="file", source_url="source.tar.gz")
+
+    executor = object.__new__(Executor)
+    executor._hashes = {}
+
+    assert executor._create_file_url_reference(package) == {
+        "archive_info": {},
+        "url": source.as_uri(),
+    }
+
+
 def test_executor_should_write_pep610_url_references_for_editable_directories(
     tmp_venv: VirtualEnv,
     pool: RepositoryPool,