diff --git a/main/src/main/scala/sbt/Defaults.scala b/main/src/main/scala/sbt/Defaults.scala
index 2e2d8afbf..f5a080bb8 100644
--- a/main/src/main/scala/sbt/Defaults.scala
+++ b/main/src/main/scala/sbt/Defaults.scala
@@ -1428,7 +1428,11 @@ object Defaults extends BuildCommon with DefExtra {
 
   /** Fork options for run-like tasks: the forked process inherits sbt's working directory. */
   private[sbt] def runForkOptionsTask: Initialize[Task[ForkOptions]] =
-    Def.task(forkOptionsTask.value.withWorkingDirectory(None))
+    Def.task {
+      // this uses Compile / run / baseDirectory, which defaults to ThisBuild / baseDirectory
+      forkOptionsTask.value
+        .withWorkingDirectory(Some(baseDirectory.value))
+    }
 
   def testExecutionTask(task: Scoped): Initialize[Task[Tests.Execution]] =
     Def.task {
@@ -2609,7 +2613,8 @@ object Defaults extends BuildCommon with DefExtra {
   private lazy val newRunnerSettings: Seq[Setting[?]] =
     Seq(
       runner := Def.uncached(ClassLoaders.runner.value),
-      forkOptions := Def.uncached(runForkOptionsTask.value)
+      forkOptions := Def.uncached(runForkOptionsTask.value),
+      baseDirectory := (ThisBuild / baseDirectory).value,
     )
 
   lazy val baseTasks: Seq[Setting[?]] = projectTasks ++ packageBase
diff --git a/sbt-app/src/sbt-test/run/fork-working-directory/app/Hello.scala b/sbt-app/src/sbt-test/run/fork-working-directory/app/Hello.scala
new file mode 100644
index 000000000..189419512
--- /dev/null
+++ b/sbt-app/src/sbt-test/run/fork-working-directory/app/Hello.scala
@@ -0,0 +1,10 @@
+package example
+
+import java.io.File
+import java.nio.file.{ Files, Path }
+
+@main
+def hello(arg: String*): Unit =
+  val x = new File(".").getAbsolutePath
+  println(s"hi $x")
+  Files.createFile(Path.of("flag"))
diff --git a/sbt-app/src/sbt-test/run/fork-working-directory/changes/a.sbt b/sbt-app/src/sbt-test/run/fork-working-directory/changes/a.sbt
new file mode 100644
index 000000000..184b248ae
--- /dev/null
+++ b/sbt-app/src/sbt-test/run/fork-working-directory/changes/a.sbt
@@ -0,0 +1,17 @@
+scalaVersion := "3.8.4"
+
+@transient
+lazy val check = taskKey[Unit]("")
+
+lazy val root = rootProject
+  .autoAggregate
+
+lazy val app = project
+  .settings(
+    check := {
+      val b = (ThisBuild / baseDirectory).value
+      val fo = (Compile / run / forkOptions).value
+      assert(fo.workingDirectory == Some(b), s"${fo.workingDirectory}")
+    },
+    Compile / run / fork := true,
+  )
diff --git a/sbt-app/src/sbt-test/run/fork-working-directory/changes/b.sbt b/sbt-app/src/sbt-test/run/fork-working-directory/changes/b.sbt
new file mode 100644
index 000000000..c7aa50511
--- /dev/null
+++ b/sbt-app/src/sbt-test/run/fork-working-directory/changes/b.sbt
@@ -0,0 +1,20 @@
+scalaVersion := "3.8.4"
+
+@transient
+lazy val check = taskKey[Unit]("")
+
+lazy val root = rootProject
+  .autoAggregate
+
+lazy val app = project
+  .settings(
+    check := {
+      val b = baseDirectory.value
+      val fo = (Compile / run / forkOptions).value
+      assert(fo.workingDirectory == Some(b), s"${fo.workingDirectory}")
+    },
+    Compile / run / fork := true,
+    // app's own baseDirectory is explicitly requested as run's working
+    // directory, so `app/run` is expected to execute from app/.
+    Compile / run / baseDirectory := baseDirectory.value,
+  )
diff --git a/sbt-app/src/sbt-test/run/fork-working-directory/test b/sbt-app/src/sbt-test/run/fork-working-directory/test
new file mode 100644
index 000000000..21c968dfa
--- /dev/null
+++ b/sbt-app/src/sbt-test/run/fork-working-directory/test
@@ -0,0 +1,20 @@
+# app sets Compile / run / baseDirectory to its own baseDirectory, so
+# `app/run` is expected to execute with app/ as its working directory.
+
+$ copy-file changes/a.sbt build.sbt
+> reload
+> app/check
+
+> app/run
+$ exists flag
+$ absent app/flag
+$ delete flag
+
+$ copy-file changes/b.sbt build.sbt
+> reload
+> app/check
+
+> app/run
+$ exists app/flag
+$ absent flag
+$ delete app/flag