diff --git a/python/gvtest/config.py b/python/gvtest/config.py
index c526e5b..5578d59 100644
--- a/python/gvtest/config.py
+++ b/python/gvtest/config.py
@@ -304,6 +304,13 @@ def resolve_targets(
         result: Dict[str, Dict] = {}
         for name in last_targets_names:
             result[name] = all_defined[name]
+
+        # Store the directory of the config that defined
+        # the targets, for resolving relative paths
+        self._targets_config_dir: str | None = (
+            str(last_targets_file.parent)
+            if last_targets_file is not None else None
+        )
         return result
     
     def get_targets(self) -> Dict[str, Dict]:
diff --git a/python/gvtest/runner.py b/python/gvtest/runner.py
index 9f0bacf..1533d64 100644
--- a/python/gvtest/runner.py
+++ b/python/gvtest/runner.py
@@ -458,13 +458,18 @@ def _resolve_targets_for_dir(
             return []
 
         # Build Target objects
+        config_dir: str | None = getattr(
+            loader, '_targets_config_dir', None
+        )
         targets: list[Target] = []
         for name, cfg in yaml_targets.items():
             # If CLI specifies targets, filter
             if (self.target_names != ['default']
                     and name not in self.target_names):
                 continue
-            targets.append(Target.from_dict(name, cfg))
+            t = Target.from_dict(name, cfg)
+            t.config_dir = config_dir
+            targets.append(t)
 
         return targets
 
diff --git a/python/gvtest/targets.py b/python/gvtest/targets.py
index bec824c..9209d0e 100644
--- a/python/gvtest/targets.py
+++ b/python/gvtest/targets.py
@@ -53,6 +53,7 @@ def __init__(
         if config is None:
             config = '{}'
         self.config: dict[str, Any] = json.loads(config)
+        self.config_dir: str | None = None
 
     @classmethod
     def from_dict(
@@ -62,6 +63,7 @@ def from_dict(
         t = cls.__new__(cls)
         t.name = name
         t.config = dict(config)
+        t.config_dir: str | None = None
         return t
 
     def get_name(self) -> str:
@@ -70,7 +72,16 @@ def get_name(self) -> str:
     def get_sourceme(self) -> str | None:
         sourceme = self.config.get('sourceme')
         if sourceme is not None:
-            return _expand_env(sourceme)
+            sourceme = _expand_env(sourceme)
+            if not os.path.isabs(sourceme):
+                config_dir = getattr(
+                    self, 'config_dir', None
+                )
+                if config_dir is not None:
+                    sourceme = os.path.join(
+                        config_dir, sourceme
+                    )
+            return sourceme
         return None
 
     def get_envvars(self) -> dict[str, str] | None: