diff --git a/org.eclipse.jgit.test/tst/org/eclipse/jgit/transport/TransportTest.java b/org.eclipse.jgit.test/tst/org/eclipse/jgit/transport/TransportTest.java
index 9899d14d8..4e7b5e420 100644
--- a/org.eclipse.jgit.test/tst/org/eclipse/jgit/transport/TransportTest.java
+++ b/org.eclipse.jgit.test/tst/org/eclipse/jgit/transport/TransportTest.java
@@ -58,6 +58,7 @@ import java.util.List;
 import org.eclipse.jgit.lib.Config;
 import org.eclipse.jgit.lib.ObjectId;
 import org.eclipse.jgit.lib.SampleDataRepositoryTestCase;
+import org.eclipse.jgit.storage.file.FileRepository;
 import org.junit.After;
 import org.junit.Before;
 import org.junit.Test;
@@ -213,6 +214,18 @@ public class TransportTest extends SampleDataRepositoryTestCase {
 		assertEquals(ObjectId.zeroId(), tru.getOldObjectId());
 	}
 
+	@Test
+	public void testLocalTransportWithRelativePath() throws Exception {
+		FileRepository other = createWorkRepository();
+		String otherDir = other.getWorkTree().getName();
+
+		RemoteConfig config = new RemoteConfig(db.getConfig(), "other");
+		config.addURI(new URIish("../" + otherDir));
+
+		// Should not throw NoRemoteRepositoryException
+		transport = Transport.open(db, config);
+	}
+
 	@Test
 	public void testSpi() {
 		List<TransportProtocol> protocols = Transport.getTransportProtocols();
diff --git a/org.eclipse.jgit/src/org/eclipse/jgit/transport/TransportLocal.java b/org.eclipse.jgit/src/org/eclipse/jgit/transport/TransportLocal.java
index 8be940d9d..5a23ae18d 100644
--- a/org.eclipse.jgit/src/org/eclipse/jgit/transport/TransportLocal.java
+++ b/org.eclipse.jgit/src/org/eclipse/jgit/transport/TransportLocal.java
@@ -118,10 +118,10 @@ class TransportLocal extends Transport implements PackTransport {
 		@Override
 		public Transport open(URIish uri, Repository local, String remoteName)
 				throws NoRemoteRepositoryException {
+			File localPath = local.isBare() ? local.getDirectory() : local.getWorkTree();
+			File path = local.getFS().resolve(localPath, uri.getPath());
 			// If the reference is to a local file, C Git behavior says
 			// assume this is a bundle, since repositories are directories.
-			//
-			File path = local.getFS().resolve(new File("."), uri.getPath());
 			if (path.isFile())
 				return new TransportBundleFile(local, uri, path);