diff --git a/packages/pyright-scip/src/MainCommand.ts b/packages/pyright-scip/src/MainCommand.ts
index d3965640e..5bde7727d 100644
--- a/packages/pyright-scip/src/MainCommand.ts
+++ b/packages/pyright-scip/src/MainCommand.ts
@@ -64,7 +64,11 @@ export function mainCommand(
         .option('--project-namespace <namespace>', 'A prefix to prepend to all module definitions in the current index')
         .option('--cwd <path>', 'working directory for executing scip-python', process.cwd())
         .option('--target-only <path>', 'limit analysis to the following path')
-        .option('--output <path>', 'path to the output file', DEFAULT_OUTPUT_FILE)
+        .option(
+            '--output <path>',
+            'Path to the output file. If this path is relative, it is interpreted relative to the value for --cwd.',
+            DEFAULT_OUTPUT_FILE
+        )
         .option('--quiet', 'run without logging and status information', false)
         .option(
             '--show-progress-rate-limit <limit>',
@@ -85,7 +89,11 @@ export function mainCommand(
         .option('--only <name>', 'only generate snapshots for <name>')
         .requiredOption('--project-name <name>', 'the name of the current project, pypi name if applicable')
         .requiredOption('--project-version <version>', 'the name of the current project, pypi name if applicable')
-        .option('--output <path>', 'path to the output file', DEFAULT_OUTPUT_FILE)
+        .option(
+            '--output <path>',
+            'Path to the output file. If this path is relative, it is interpreted relative to the value for --cwd.',
+            DEFAULT_OUTPUT_FILE
+        )
         .option('--environment <json-file>', 'the environment json file (experimental)')
         .option('--no-index', 'skip indexing (use existing index.scip)')
         .option('--quiet', 'run without logging and status information', false)
diff --git a/packages/pyright-scip/src/main-impl.ts b/packages/pyright-scip/src/main-impl.ts
index 443dda638..5b96d2686 100644
--- a/packages/pyright-scip/src/main-impl.ts
+++ b/packages/pyright-scip/src/main-impl.ts
@@ -22,7 +22,13 @@ function indexAction(options: IndexOptions): void {
     const originalWorkdir = process.cwd();
     process.chdir(projectRoot);
 
-    const outputFile = path.isAbsolute(options.output) ? options.output : path.join(originalWorkdir, options.output);
+    // In the relative path case, we use projectRoot rather than
+    // originalWorkdir because:
+    // 1. To preserve back-compat in case anyone is relying on projectRoot
+    // 2. The actual CLI flag for specifying the project root is --cwd,
+    //    which may lead to the expectation that output is considered
+    //    relative to the project root.
+    const outputFile = path.isAbsolute(options.output) ? options.output : path.join(projectRoot, options.output);
     const output = fs.openSync(outputFile, 'w');
 
     try {