diff --git a/Lib/site.py b/Lib/site.py
index 2c717987559e58..2b0f2cc63bfc51 100644
--- a/Lib/site.py
+++ b/Lib/site.py
@@ -487,6 +487,8 @@ def venv(known_paths):
                     if key == 'include-system-site-packages':
                         system_site = value.lower()
                     elif key == 'home':
+                        if value.startswith('.'):
+                            value = os.path.join(os.path.dirname(virtual_conf), value)
                         sys._home = value
 
         sys.prefix = sys.exec_prefix = site_prefix
diff --git a/Modules/getpath.c b/Modules/getpath.c
index 8632d1fe6d80f0..dd6b4879358a17 100644
--- a/Modules/getpath.c
+++ b/Modules/getpath.c
@@ -1197,7 +1197,7 @@ calculate_argv0_path(PyCalculatePath *calculate,
 
 
 static PyStatus
-calculate_open_pyenv(PyCalculatePath *calculate, FILE **env_file_p)
+calculate_open_pyenv(PyCalculatePath *calculate, FILE **env_file_p, wchar_t **pyenv_filename)
 {
     *env_file_p = NULL;
 
@@ -1210,12 +1210,13 @@ calculate_open_pyenv(PyCalculatePath *calculate, FILE **env_file_p)
     }
 
     *env_file_p = _Py_wfopen(filename, L"r");
-    PyMem_RawFree(filename);
 
     if (*env_file_p != NULL) {
+        *pyenv_filename = filename;
         return _PyStatus_OK();
 
     }
+    PyMem_RawFree(filename);
 
     /* fopen() failed: reset errno */
     errno = 0;
@@ -1234,11 +1235,13 @@ calculate_open_pyenv(PyCalculatePath *calculate, FILE **env_file_p)
     }
 
     *env_file_p = _Py_wfopen(filename, L"r");
-    PyMem_RawFree(filename);
 
     if (*env_file_p == NULL) {
+        PyMem_RawFree(filename);
         /* fopen() failed: reset errno */
         errno = 0;
+    } else {
+        *pyenv_filename = filename;
     }
     return _PyStatus_OK();
 }
@@ -1254,8 +1257,9 @@ calculate_read_pyenv(PyCalculatePath *calculate)
 {
     PyStatus status;
     FILE *env_file = NULL;
+    wchar_t *pyenv_filename = NULL;
 
-    status = calculate_open_pyenv(calculate, &env_file);
+    status = calculate_open_pyenv(calculate, &env_file, &pyenv_filename);
     if (_PyStatus_EXCEPTION(status)) {
         return status;
     }
@@ -1274,7 +1278,14 @@ calculate_read_pyenv(PyCalculatePath *calculate)
 
     if (home) {
         PyMem_RawFree(calculate->argv0_path);
-        calculate->argv0_path = home;
+        if (home[0] == '.') {
+            /* Relative home path to pyvenv_filename */
+            reduce(pyenv_filename);
+            calculate->argv0_path = joinpath2(pyenv_filename, home);
+        } else {
+            /* Absolute home path */
+            calculate->argv0_path = home;
+        }
     }
     fclose(env_file);
     return _PyStatus_OK();
diff --git a/PC/getpathp.c b/PC/getpathp.c
index 085caf195a9920..900a662d60929b 100644
--- a/PC/getpathp.c
+++ b/PC/getpathp.c
@@ -787,7 +787,14 @@ calculate_pyvenv_file(PyCalculatePath *calculate,
         return status;
     }
     if (home) {
-        wcscpy_s(argv0_path, argv0_path_len, home);
+        if (home[0] == '.') {
+            /* Home path is relative to directory of pyvenv.cfg file */
+            reduce(filename);
+            join(filename, home);
+            wcscpy_s(argv0_path, argv0_path_len, filename);
+        } else {
+            wcscpy_s(argv0_path, argv0_path_len, home);
+        }
         PyMem_RawFree(home);
     }
     fclose(env_file);