diff --git a/build_library/qemu_template.sh b/build_library/qemu_template.sh
index 4e2d5266f3..a0c1920910 100755
--- a/build_library/qemu_template.sh
+++ b/build_library/qemu_template.sh
@@ -260,9 +260,9 @@ fi
 if [ -n "${VM_IMAGE}" ]; then
     case "${VM_BOARD}" in
         amd64-usr)
-            set -- -drive if=virtio,file="${SCRIPT_DIR}/${VM_IMAGE}" "$@" ;;
+            set -- -drive if=virtio,file="${VM_IMAGE}" "$@" ;;
         arm64-usr)
-            set -- -drive if=none,id=blk,file="${SCRIPT_DIR}/${VM_IMAGE}" \
+            set -- -drive if=none,id=blk,file="${VM_IMAGE}" \
             -device virtio-blk-device,drive=blk "$@"
             ;;
         *) die "Unsupported arch" ;;
@@ -270,11 +270,11 @@ if [ -n "${VM_IMAGE}" ]; then
 fi
 
 if [ -n "${VM_KERNEL}" ]; then
-    set -- -kernel "${SCRIPT_DIR}/${VM_KERNEL}" "$@"
+    set -- -kernel "${VM_KERNEL}" "$@"
 fi
 
 if [ -n "${VM_INITRD}" ]; then
-    set -- -initrd "${SCRIPT_DIR}/${VM_INITRD}" "$@"
+    set -- -initrd "${VM_INITRD}" "$@"
 fi
 
 if [ -n "${VM_UUID}" ]; then
@@ -283,13 +283,13 @@ fi
 
 if [ -n "${VM_CDROM}" ]; then
     set -- -boot order=d \
-	-drive file="${SCRIPT_DIR}/${VM_CDROM}",media=cdrom,format=raw "$@"
+	-drive file="${VM_CDROM}",media=cdrom,format=raw "$@"
 fi
 
 if [ -n "${VM_PFLASH_RO}" ] && [ -n "${VM_PFLASH_RW}" ]; then
     set -- \
-        -drive if=pflash,unit=0,file="${SCRIPT_DIR}/${VM_PFLASH_RO}",format=qcow2,readonly=on \
-        -drive if=pflash,unit=1,file="${SCRIPT_DIR}/${VM_PFLASH_RW}",format=qcow2 "$@"
+        -drive if=pflash,unit=0,file="${VM_PFLASH_RO}",format=qcow2,readonly=on \
+        -drive if=pflash,unit=1,file="${VM_PFLASH_RW}",format=qcow2 "$@"
 fi
 
 if [ -n "${IGNITION_CONFIG_FILE}" ]; then
diff --git a/build_library/vm_image_util.sh b/build_library/vm_image_util.sh
index cbfbec9084..93772959eb 100644
--- a/build_library/vm_image_util.sh
+++ b/build_library/vm_image_util.sh
@@ -821,7 +821,7 @@ _write_qemu_conf() {
     local dst_name=$(basename "$VM_DST_IMG")
 
     _write_qemu_common "${script}"
-    sed -e "s%^VM_IMAGE=.*%VM_IMAGE='${dst_name}'%" -i "${script}"
+    sed -e "s%^VM_IMAGE=.*%VM_IMAGE=\"\${SCRIPT_DIR}/${dst_name}\"%" -i "${script}"
 }
 
 _write_qemu_uefi_conf() {
@@ -842,8 +842,8 @@ _write_qemu_uefi_conf() {
             ;;
     esac
 
-    sed -e "s%^VM_PFLASH_RO=.*%VM_PFLASH_RO='${flash_ro}'%" \
-        -e "s%^VM_PFLASH_RW=.*%VM_PFLASH_RW='${flash_rw}'%" -i "${script}"
+    sed -e "s%^VM_PFLASH_RO=.*%VM_PFLASH_RO=\"\${SCRIPT_DIR}/${flash_ro}\"%" \
+        -e "s%^VM_PFLASH_RW=.*%VM_PFLASH_RW=\"\${SCRIPT_DIR}/${flash_rw}\"%" -i "${script}"
     VM_GENERATED_FILES+=( "$(_dst_dir)/${flash_ro}" "$(_dst_dir)/${flash_rw}" )
 
     # We now only support building qemu_uefi and generate the
@@ -899,8 +899,8 @@ _write_pxe_conf() {
     local dst_name=$(basename "$VM_DST_IMG")
 
     _write_qemu_common "${script}"
-    sed -e "s%^VM_KERNEL=.*%VM_KERNEL='${vmlinuz_name}'%" \
-        -e "s%^VM_INITRD=.*%VM_INITRD='${dst_name}'%" -i "${script}"
+    sed -e "s%^VM_KERNEL=.*%VM_KERNEL=\"\${SCRIPT_DIR}/${vmlinuz_name}\"%" \
+        -e "s%^VM_INITRD=.*%VM_INITRD=\"\${SCRIPT_DIR}/${dst_name}\"%" -i "${script}"
 
     cat >>"${VM_README}" <<EOF
 
@@ -925,7 +925,7 @@ _write_iso_conf() {
     local script="$(_dst_dir)/$(_dst_name ".sh")"
     local dst_name=$(basename "$VM_DST_IMG")
     _write_qemu_common "${script}"
-    sed -e "s%^VM_CDROM=.*%VM_CDROM='${dst_name}'%" -i "${script}"
+    sed -e "s%^VM_CDROM=.*%VM_CDROM=\"\${SCRIPT_DIR}/${dst_name}\"%" -i "${script}"
 }
 
 # Generate the vmware config file
diff --git a/changelog/bugfixes/2025-04-07-qemu-script-paths.md b/changelog/bugfixes/2025-04-07-qemu-script-paths.md
new file mode 100644
index 0000000000..2a836f53c9
--- /dev/null
+++ b/changelog/bugfixes/2025-04-07-qemu-script-paths.md
@@ -0,0 +1 @@
+- Fixed path handling in the QEMU .sh launcher scripts. Given paths now are relative to the current directory and absolute paths work as you would expect.