diff --git a/Makefile b/Makefile
index 793bc12..d461b66 100644
--- a/Makefile
+++ b/Makefile
@@ -6,6 +6,7 @@ lint:
 
 test: generate lint
 	go test -race -cover ./...
+	go run ./cmd/tengo -resolve ./testdata/cli/test.tengo
 
 fmt:
 	go fmt ./...
diff --git a/cmd/tengo/main.go b/cmd/tengo/main.go
index afddd68..a8e1498 100644
--- a/cmd/tengo/main.go
+++ b/cmd/tengo/main.go
@@ -25,6 +25,7 @@ var (
 	compileOutput string
 	showHelp      bool
 	showVersion   bool
+	resolvePath   bool // TODO Remove this flag at version 3
 	version       = "dev"
 )
 
@@ -32,6 +33,8 @@ func init() {
 	flag.BoolVar(&showHelp, "help", false, "Show help")
 	flag.StringVar(&compileOutput, "o", "", "Compile output file")
 	flag.BoolVar(&showVersion, "version", false, "Show version")
+	flag.BoolVar(&resolvePath, "resolve", false,
+		"Resolve relative import paths")
 	flag.Parse()
 }
 
@@ -55,10 +58,20 @@ func main() {
 	inputData, err := ioutil.ReadFile(inputFile)
 	if err != nil {
 		_, _ = fmt.Fprintf(os.Stderr,
-			"Error reading input file: %s", err.Error())
+			"Error reading input file: %s\n", err.Error())
 		os.Exit(1)
 	}
 
+	inputFile, err = filepath.Abs(inputFile)
+	if err != nil {
+		_, _ = fmt.Fprintf(os.Stderr, "Error file path: %s\n", err)
+		os.Exit(1)
+	}
+
+	if len(inputData) > 1 && string(inputData[:2]) == "#!" {
+		copy(inputData, "//")
+	}
+
 	if compileOutput != "" {
 		err := CompileOnly(modules, inputData, inputFile,
 			compileOutput)
@@ -67,9 +80,6 @@ func main() {
 			os.Exit(1)
 		}
 	} else if filepath.Ext(inputFile) == sourceFileExt {
-		if len(inputData) > 1 && string(inputData[:2]) == "#!" {
-			copy(inputData, "//")
-		}
 		err := CompileAndRun(modules, inputData, inputFile)
 		if err != nil {
 			_, _ = fmt.Fprintln(os.Stderr, err.Error())
@@ -90,7 +100,7 @@ func CompileOnly(
 	data []byte,
 	inputFile, outputFile string,
 ) (err error) {
-	bytecode, err := compileSrc(modules, data, filepath.Base(inputFile))
+	bytecode, err := compileSrc(modules, data, inputFile)
 	if err != nil {
 		return
 	}
@@ -125,7 +135,7 @@ func CompileAndRun(
 	data []byte,
 	inputFile string,
 ) (err error) {
-	bytecode, err := compileSrc(modules, data, filepath.Base(inputFile))
+	bytecode, err := compileSrc(modules, data, inputFile)
 	if err != nil {
 		return
 	}
@@ -215,10 +225,10 @@ func RunREPL(modules *tengo.ModuleMap, in io.Reader, out io.Writer) {
 func compileSrc(
 	modules *tengo.ModuleMap,
 	src []byte,
-	filename string,
+	inputFile string,
 ) (*tengo.Bytecode, error) {
 	fileSet := parser.NewFileSet()
-	srcFile := fileSet.AddFile(filename, -1, len(src))
+	srcFile := fileSet.AddFile(filepath.Base(inputFile), -1, len(src))
 
 	p := parser.NewParser(srcFile, src, nil)
 	file, err := p.ParseFile()
@@ -228,6 +238,9 @@ func compileSrc(
 
 	c := tengo.NewCompiler(srcFile, nil, nil, modules, nil)
 	c.EnableFileImport(true)
+	if resolvePath {
+		c.SetImportDir(filepath.Dir(inputFile))
+	}
 
 	if err := c.Compile(file); err != nil {
 		return nil, err
diff --git a/compiler.go b/compiler.go
index 757a810..cb1c8f3 100644
--- a/compiler.go
+++ b/compiler.go
@@ -44,6 +44,7 @@ type Compiler struct {
 	file            *parser.SourceFile
 	parent          *Compiler
 	modulePath      string
+	importDir       string
 	constants       []Object
 	symbolTable     *SymbolTable
 	scopes          []compilationScope
@@ -520,7 +521,7 @@ func (c *Compiler) Compile(node parser.Node) error {
 			switch v := v.(type) {
 			case []byte: // module written in Tengo
 				compiled, err := c.compileModule(node,
-					node.ModuleName, node.ModuleName, v)
+					node.ModuleName, v, false)
 				if err != nil {
 					return err
 				}
@@ -537,24 +538,20 @@ func (c *Compiler) Compile(node parser.Node) error {
 				moduleName += ".tengo"
 			}
 
-			modulePath, err := filepath.Abs(moduleName)
+			modulePath, err := filepath.Abs(
+				filepath.Join(c.importDir, moduleName))
 			if err != nil {
 				return c.errorf(node, "module file path error: %s",
 					err.Error())
 			}
 
-			if err := c.checkCyclicImports(node, modulePath); err != nil {
-				return err
-			}
-
-			moduleSrc, err := ioutil.ReadFile(moduleName)
+			moduleSrc, err := ioutil.ReadFile(modulePath)
 			if err != nil {
 				return c.errorf(node, "module file read error: %s",
 					err.Error())
 			}
 
-			compiled, err := c.compileModule(node,
-				moduleName, modulePath, moduleSrc)
+			compiled, err := c.compileModule(node, modulePath, moduleSrc, true)
 			if err != nil {
 				return err
 			}
@@ -634,6 +631,11 @@ func (c *Compiler) EnableFileImport(enable bool) {
 	c.allowFileImport = enable
 }
 
+// SetImportDir sets the initial import directory path for file imports.
+func (c *Compiler) SetImportDir(dir string) {
+	c.importDir = dir
+}
+
 func (c *Compiler) compileAssign(
 	node parser.Node,
 	lhs, rhs []parser.Expr,
@@ -957,8 +959,9 @@ func (c *Compiler) checkCyclicImports(
 
 func (c *Compiler) compileModule(
 	node parser.Node,
-	moduleName, modulePath string,
+	modulePath string,
 	src []byte,
+	isFile bool,
 ) (*CompiledFunction, error) {
 	if err := c.checkCyclicImports(node, modulePath); err != nil {
 		return nil, err
@@ -969,7 +972,7 @@ func (c *Compiler) compileModule(
 		return compiledModule, nil
 	}
 
-	modFile := c.file.Set().AddFile(moduleName, -1, len(src))
+	modFile := c.file.Set().AddFile(modulePath, -1, len(src))
 	p := parser.NewParser(modFile, src, nil)
 	file, err := p.ParseFile()
 	if err != nil {
@@ -986,7 +989,7 @@ func (c *Compiler) compileModule(
 	symbolTable = symbolTable.Fork(false)
 
 	// compile module
-	moduleCompiler := c.fork(modFile, modulePath, symbolTable)
+	moduleCompiler := c.fork(modFile, modulePath, symbolTable, isFile)
 	if err := moduleCompiler.Compile(file); err != nil {
 		return nil, err
 	}
@@ -1084,11 +1087,16 @@ func (c *Compiler) fork(
 	file *parser.SourceFile,
 	modulePath string,
 	symbolTable *SymbolTable,
+	isFile bool,
 ) *Compiler {
 	child := NewCompiler(file, symbolTable, nil, c.modules, c.trace)
 	child.modulePath = modulePath // module file path
 	child.parent = c              // parent to set to current compiler
 	child.allowFileImport = c.allowFileImport
+	child.importDir = c.importDir
+	if isFile && c.importDir != "" {
+		child.importDir = filepath.Dir(modulePath)
+	}
 	return child
 }
 
diff --git a/script.go b/script.go
index 906771d..4f9608c 100644
--- a/script.go
+++ b/script.go
@@ -3,6 +3,7 @@ package tengo
 import (
 	"context"
 	"fmt"
+	"path/filepath"
 	"sync"
 
 	"github.com/d5/tengo/v2/parser"
@@ -16,6 +17,7 @@ type Script struct {
 	maxAllocs        int64
 	maxConstObjects  int
 	enableFileImport bool
+	importDir        string
 }
 
 // NewScript creates a Script instance with an input script.
@@ -56,6 +58,16 @@ func (s *Script) SetImports(modules *ModuleMap) {
 	s.modules = modules
 }
 
+// SetImportDir sets the initial import directory for script files.
+func (s *Script) SetImportDir(dir string) error {
+	dir, err := filepath.Abs(dir)
+	if err != nil {
+		return err
+	}
+	s.importDir = dir
+	return nil
+}
+
 // SetMaxAllocs sets the maximum number of objects allocations during the run
 // time. Compiled script will return ErrObjectAllocLimit error if it
 // exceeds this limit.
@@ -93,6 +105,7 @@ func (s *Script) Compile() (*Compiled, error) {
 
 	c := NewCompiler(srcFile, symbolTable, nil, s.modules, nil)
 	c.EnableFileImport(s.enableFileImport)
+	c.SetImportDir(s.importDir)
 	if err := c.Compile(file); err != nil {
 		return nil, err
 	}
diff --git a/testdata/cli/one.tengo b/testdata/cli/one.tengo
new file mode 100644
index 0000000..30ee366
--- /dev/null
+++ b/testdata/cli/one.tengo
@@ -0,0 +1,7 @@
+
+export {
+    fn: func(a) {
+        two := import("two/two")
+        return two.fn(a, "one")
+    }
+}
\ No newline at end of file
diff --git a/testdata/cli/test.tengo b/testdata/cli/test.tengo
new file mode 100755
index 0000000..41c221a
--- /dev/null
+++ b/testdata/cli/test.tengo
@@ -0,0 +1,15 @@
+#!/usr/bin/env tengo
+
+os := import("os")
+one := import("one")
+fmt := import("fmt")
+text := import("text")
+expected := ["test", "one", "two", "three", "four", "five"]
+expected = text.join(expected, " ")
+if v := one.fn("test"); v != expected {
+    fmt.printf("relative import test error:\n\texpected: %v\n\tgot     : %v\n",
+                expected, v)
+    os.exit(1)
+}
+args := text.join(os.args(), " ")
+fmt.println("ok\t", args)
diff --git a/testdata/cli/three.tengo b/testdata/cli/three.tengo
new file mode 100644
index 0000000..5f21a80
--- /dev/null
+++ b/testdata/cli/three.tengo
@@ -0,0 +1,6 @@
+export {
+    fn: func(a, b, c) {
+        four := import("./two/four/four.tengo")
+        return four.fn(a, b, c, "three")
+    }
+}
\ No newline at end of file
diff --git a/testdata/cli/two/five/five.tengo b/testdata/cli/two/five/five.tengo
new file mode 100644
index 0000000..dd5f7bd
--- /dev/null
+++ b/testdata/cli/two/five/five.tengo
@@ -0,0 +1,7 @@
+export {
+    fn: func(...args) {
+        text := import("text")
+        args = append(args, "five")
+        return text.join(args, " ")
+    }
+}
\ No newline at end of file
diff --git a/testdata/cli/two/four/four.tengo b/testdata/cli/two/four/four.tengo
new file mode 100644
index 0000000..59c79bc
--- /dev/null
+++ b/testdata/cli/two/four/four.tengo
@@ -0,0 +1,6 @@
+export {
+    fn: func(a, b, c, d) {
+        five := import("../five/five")
+        return five.fn(a, b, c, d, "four")
+    }
+}
\ No newline at end of file
diff --git a/testdata/cli/two/two.tengo b/testdata/cli/two/two.tengo
new file mode 100644
index 0000000..7fc9800
--- /dev/null
+++ b/testdata/cli/two/two.tengo
@@ -0,0 +1,6 @@
+export {
+    fn: func(a, b) {
+        three := import("../three")
+        return three.fn(a, b, "two")
+    }
+}
\ No newline at end of file