diff --git a/internal/runtime/alloy_test.go b/internal/runtime/alloy_test.go
index a9c7efcf01..fb93e5853a 100644
--- a/internal/runtime/alloy_test.go
+++ b/internal/runtime/alloy_test.go
@@ -43,7 +43,7 @@ func TestController_LoadSource_Evaluation(t *testing.T) {
 	require.NoError(t, err)
 	require.NotNil(t, f)
 
-	err = ctrl.LoadSource(f, nil)
+	err = ctrl.LoadSource(f, nil, "")
 	require.NoError(t, err)
 	require.Len(t, ctrl.loader.Components(), 4)
 
@@ -54,6 +54,41 @@ func TestController_LoadSource_Evaluation(t *testing.T) {
 	require.Equal(t, "hello, world!", out.(testcomponents.PassthroughExports).Output)
 }
 
+var modulePathTestFile = `
+	testcomponents.tick "ticker" {
+		frequency = "1s"
+	}
+	testcomponents.passthrough "static" {
+		input = module_path
+	}
+	testcomponents.passthrough "ticker" {
+		input = testcomponents.tick.ticker.tick_time
+	}
+	testcomponents.passthrough "forwarded" {
+		input = testcomponents.passthrough.ticker.output
+	}
+`
+
+func TestController_LoadSource_WithModulePath_Evaluation(t *testing.T) {
+	defer verifyNoGoroutineLeaks(t)
+	ctrl := New(testOptions(t))
+	defer cleanUpController(ctrl)
+
+	f, err := ParseSource(t.Name(), []byte(modulePathTestFile))
+	require.NoError(t, err)
+	require.NotNil(t, f)
+
+	err = ctrl.LoadSource(f, nil, "path/to/config/main.alloy")
+	require.NoError(t, err)
+	require.Len(t, ctrl.loader.Components(), 4)
+
+	// Check the inputs and outputs of things that should be immediately resolved
+	// without having to run the components.
+	in, out := getFields(t, ctrl.loader.Graph(), "testcomponents.passthrough.static")
+	require.Equal(t, "path/to/config", in.(testcomponents.PassthroughConfig).Input)
+	require.Equal(t, "path/to/config", out.(testcomponents.PassthroughExports).Output)
+}
+
 func getFields(t *testing.T, g *dag.Graph, nodeID string) (component.Arguments, component.Exports) {
 	t.Helper()
 
diff --git a/internal/runtime/import_test.go b/internal/runtime/import_test.go
index dab9400d31..1b6ec2eb3b 100644
--- a/internal/runtime/import_test.go
+++ b/internal/runtime/import_test.go
@@ -27,13 +27,15 @@ const mainFile = "main.alloy"
 
 // The tests are using the .txtar files stored in the testdata folder.
 type testImportFile struct {
-	description       string      // description at the top of the txtar file
-	main              string      // root config that the controller should load
-	module            string      // module imported by the root config
-	nestedModule      string      // nested module that can be imported by the module
-	reloadConfig      string      // root config that the controller should apply on reload
-	otherNestedModule string      // another nested module
-	update            *updateFile // update can be used to update the content of a file at runtime
+	description            string      // description at the top of the txtar file
+	main                   string      // root config that the controller should load
+	module                 string      // module imported by the root config
+	nestedModule           string      // nested module that can be imported by the module
+	reloadConfig           string      // root config that the controller should apply on reload
+	otherNestedModule      string      // another nested module
+	nestedPathModule       string      // a module in a subdirectory
+	deeplyNestedPathModule string      // a module in a sub-subdirectory
+	update                 *updateFile // update can be used to update the content of a file at runtime
 }
 
 type updateFile struct {
@@ -70,6 +72,10 @@ func buildTestImportFile(t *testing.T, filename string) testImportFile {
 			tc.reloadConfig = string(alloyConfig.Data)
 		case "other_nested_module.alloy":
 			tc.otherNestedModule = string(alloyConfig.Data)
+		case "nested_test/module.alloy":
+			tc.nestedPathModule = string(alloyConfig.Data)
+		case "nested_test/utils/module.alloy":
+			tc.deeplyNestedPathModule = string(alloyConfig.Data)
 		}
 	}
 	return tc
@@ -91,6 +97,18 @@ func TestImportFile(t *testing.T) {
 				require.NoError(t, os.WriteFile("other_nested_module.alloy", []byte(tc.otherNestedModule), 0664))
 			}
 
+			if tc.nestedPathModule != "" || tc.deeplyNestedPathModule != "" {
+				require.NoError(t, os.Mkdir("nested_test", 0700))
+				defer os.RemoveAll("nested_test")
+				if tc.nestedPathModule != "" {
+					require.NoError(t, os.WriteFile("nested_test/module.alloy", []byte(tc.nestedPathModule), 0664))
+				}
+				if tc.deeplyNestedPathModule != "" {
+					require.NoError(t, os.Mkdir("nested_test/utils", 0700))
+					require.NoError(t, os.WriteFile("nested_test/utils/module.alloy", []byte(tc.deeplyNestedPathModule), 0664))
+				}
+			}
+
 			if tc.update != nil {
 				testConfig(t, tc.main, tc.reloadConfig, func() {
 					require.NoError(t, os.WriteFile(tc.update.name, []byte(tc.update.updateConfig), 0664))
@@ -146,13 +164,14 @@ func TestImportHTTP(t *testing.T) {
 }
 
 type testImportFileFolder struct {
-	description string      // description at the top of the txtar file
-	main        string      // root config that the controller should load
-	module1     string      // module imported by the root config
-	module2     string      // another module imported by the root config
-	removed     string      // module will be removed in the dir on update
-	added       string      // module which will be added in the dir on update
-	update      *updateFile // update can be used to update the content of a file at runtime
+	description  string      // description at the top of the txtar file
+	main         string      // root config that the controller should load
+	module1      string      // module imported by the root config
+	module2      string      // another module imported by the root config
+	utilsModule2 string      // another module in a nested subdirectory
+	removed      string      // module will be removed in the dir on update
+	added        string      // module which will be added in the dir on update
+	update       *updateFile // update can be used to update the content of a file at runtime
 }
 
 func buildTestImportFileFolder(t *testing.T, filename string) testImportFileFolder {
@@ -168,6 +187,8 @@ func buildTestImportFileFolder(t *testing.T, filename string) testImportFileFold
 			tc.module1 = string(alloyConfig.Data)
 		case "module2.alloy":
 			tc.module2 = string(alloyConfig.Data)
+		case "utils/module2.alloy":
+			tc.utilsModule2 = string(alloyConfig.Data)
 		case "added.alloy":
 			tc.added = string(alloyConfig.Data)
 		case "removed.alloy":
@@ -184,6 +205,12 @@ func buildTestImportFileFolder(t *testing.T, filename string) testImportFileFold
 				name:         "module2.alloy",
 				updateConfig: string(alloyConfig.Data),
 			}
+		case "utils/update_module2.alloy":
+			require.Nil(t, tc.update)
+			tc.update = &updateFile{
+				name:         "utils/module2.alloy",
+				updateConfig: string(alloyConfig.Data),
+			}
 		}
 	}
 	return tc
@@ -210,6 +237,12 @@ func TestImportFileFolder(t *testing.T) {
 				require.NoError(t, os.WriteFile(filepath.Join(dir, "removed.alloy"), []byte(tc.removed), 0700))
 			}
 
+			if tc.utilsModule2 != "" {
+				nestedDir := filepath.Join(dir, "utils")
+				require.NoError(t, os.Mkdir(nestedDir, 0700))
+				require.NoError(t, os.WriteFile(filepath.Join(nestedDir, "module2.alloy"), []byte(tc.utilsModule2), 0700))
+			}
+
 			// TODO: ideally we would like to check the health of the node but that's not yet possible for import nodes.
 			// We should expect that adding or removing files in the dir is gracefully handled and the node should be
 			// healthy once it polls the content of the dir again.
@@ -265,7 +298,7 @@ func testConfig(t *testing.T, config string, reloadConfig string, update func())
 	defer verifyNoGoroutineLeaks(t)
 	ctrl, f := setup(t, config)
 
-	err := ctrl.LoadSource(f, nil)
+	err := ctrl.LoadSource(f, nil, "")
 	require.NoError(t, err)
 
 	ctx, cancel := context.WithCancel(context.Background())
@@ -303,7 +336,7 @@ func testConfig(t *testing.T, config string, reloadConfig string, update func())
 		require.NotNil(t, f)
 
 		// Reload the controller with the new config.
-		err = ctrl.LoadSource(f, nil)
+		err = ctrl.LoadSource(f, nil, "")
 		require.NoError(t, err)
 
 		// Export should be -10 after update
@@ -317,7 +350,7 @@ func testConfig(t *testing.T, config string, reloadConfig string, update func())
 func testConfigError(t *testing.T, config string, expectedError string) {
 	defer verifyNoGoroutineLeaks(t)
 	ctrl, f := setup(t, config)
-	err := ctrl.LoadSource(f, nil)
+	err := ctrl.LoadSource(f, nil, "")
 	require.ErrorContains(t, err, expectedError)
 	ctx, cancel := context.WithCancel(context.Background())
 	var wg sync.WaitGroup
diff --git a/internal/runtime/testdata/import_file/import_file_18.txtar b/internal/runtime/testdata/import_file/import_file_18.txtar
new file mode 100644
index 0000000000..36584f2f22
--- /dev/null
+++ b/internal/runtime/testdata/import_file/import_file_18.txtar
@@ -0,0 +1,50 @@
+Import nested passthrough module with relative import path.
+
+-- main.alloy --
+testcomponents.count "inc" {
+  frequency = "10ms"
+  max = 10
+}
+
+import.file "testImport" {
+  filename = "nested_test/module.alloy"
+}
+
+testImport.a "cc" {
+  input = testcomponents.count.inc.count
+}
+
+testcomponents.summation "sum" {
+  input = testImport.a.cc.output
+}
+
+-- nested_test/module.alloy --
+import.file "testImport" {
+  filename = file.path_join(module_path, "utils/module.alloy")
+}
+
+declare "a" {
+  argument "input" {}
+
+  testImport.a "cc" {
+    input = argument.input.value
+  }
+
+  export "output" {
+    value = testImport.a.cc.output
+  }
+}
+
+-- nested_test/utils/module.alloy --
+declare "a" {
+  argument "input" {}
+
+  testcomponents.passthrough "pt" {
+    input = argument.input.value
+    lag = "1ms"
+  }
+
+  export "output" {
+    value = testcomponents.passthrough.pt.output
+  }
+}
diff --git a/internal/runtime/testdata/import_file/import_file_19.txtar b/internal/runtime/testdata/import_file/import_file_19.txtar
new file mode 100644
index 0000000000..728855b84a
--- /dev/null
+++ b/internal/runtime/testdata/import_file/import_file_19.txtar
@@ -0,0 +1,49 @@
+Import string with import file with relative import path.
+
+-- main.alloy --
+testcomponents.count "inc" {
+  frequency = "10ms"
+  max = 10
+}
+
+import.string "testImport" {
+  content = `
+    import.file "testImport" {
+      filename = file.path_join(module_path, "nested_test/module.alloy")
+    }
+
+    declare "a" {
+      argument "input" {}
+
+      testImport.a "cc" {
+        input = argument.input.value
+      }
+
+      export "output" {
+        value = testImport.a.cc.output
+      }
+    }
+  `
+}
+
+testImport.a "cc" {
+  input = testcomponents.count.inc.count
+}
+
+testcomponents.summation "sum" {
+  input = testImport.a.cc.output
+}
+
+-- nested_test/module.alloy --
+declare "a" {
+  argument "input" {}
+
+  testcomponents.passthrough "pt" {
+    input = argument.input.value
+    lag = "1ms"
+  }
+
+  export "output" {
+    value = testcomponents.passthrough.pt.output
+  }
+}
diff --git a/internal/runtime/testdata/import_file/import_file_20.txtar b/internal/runtime/testdata/import_file/import_file_20.txtar
new file mode 100644
index 0000000000..7fd7f3b697
--- /dev/null
+++ b/internal/runtime/testdata/import_file/import_file_20.txtar
@@ -0,0 +1,50 @@
+Import nested passthrough module with relative import path in a declare.
+
+-- main.alloy --
+testcomponents.count "inc" {
+  frequency = "10ms"
+  max = 10
+}
+
+import.file "testImport" {
+  filename = "nested_test/module.alloy"
+}
+
+testImport.a "cc" {
+  input = testcomponents.count.inc.count
+}
+
+testcomponents.summation "sum" {
+  input = testImport.a.cc.output
+}
+
+-- nested_test/module.alloy --
+declare "a" {
+  argument "input" {}
+
+  import.file "testImport" {
+    filename = file.path_join(module_path, "utils/module.alloy")
+  }
+
+  testImport.a "cc" {
+    input = argument.input.value
+  }
+
+  export "output" {
+    value = testImport.a.cc.output
+  }
+}
+
+-- nested_test/utils/module.alloy --
+declare "a" {
+  argument "input" {}
+
+  testcomponents.passthrough "pt" {
+    input = argument.input.value
+    lag = "1ms"
+  }
+
+  export "output" {
+    value = testcomponents.passthrough.pt.output
+  }
+}
diff --git a/internal/runtime/testdata/import_file_folder/import_file_folder_7.txtar b/internal/runtime/testdata/import_file_folder/import_file_folder_7.txtar
new file mode 100644
index 0000000000..8c2ae7866b
--- /dev/null
+++ b/internal/runtime/testdata/import_file_folder/import_file_folder_7.txtar
@@ -0,0 +1,58 @@
+Import nested folder with relative path.
+
+-- main.alloy --
+testcomponents.count "inc" {
+  frequency = "10ms"
+  max = 10
+}
+
+import.file "testImport" {
+  filename = "tmpTest"
+}
+
+testImport.a "cc" {
+  input = testcomponents.count.inc.count
+}
+
+testcomponents.summation "sum" {
+  input = testImport.a.cc.output
+}
+
+-- module1.alloy --
+import.file "testImport" {
+  filename = file.path_join(module_path, "utils")
+}
+declare "a" {
+  argument "input" {}
+
+  testImport.b "cc" {
+    input = argument.input.value
+  }
+
+  export "output" {
+    value = testImport.b.cc.output
+  }
+}
+
+-- utils/module2.alloy --
+declare "b" {
+  argument "input" {}
+
+  testcomponents.passthrough "pt" {
+    input = argument.input.value
+    lag = "1ms"
+  }
+
+  export "output" {
+    value = testcomponents.passthrough.pt.output
+  }
+}
+
+-- utils/update_module2.alloy --
+declare "b" {
+  argument "input" {}
+
+  export "output" {
+    value = -argument.input.value
+  }
+}
diff --git a/internal/runtime/testdata/import_git/import_git_4.txtar b/internal/runtime/testdata/import_git/import_git_4.txtar
new file mode 100644
index 0000000000..f4f8feef9c
--- /dev/null
+++ b/internal/runtime/testdata/import_git/import_git_4.txtar
@@ -0,0 +1,21 @@
+Import a module that contains an import.file with a relative import path.
+
+-- main.alloy --
+testcomponents.count "inc" {
+  frequency = "10ms"
+  max = 10
+}
+
+import.git "testImport" {
+  // Requires repo.git.tar to be extracted
+  repository = "./testdata/repo.git"
+  path = "module_import_file.alloy"
+}
+
+testImport.a "cc" {
+  input = testcomponents.count.inc.count
+}
+
+testcomponents.summation "sum" {
+  input = testImport.a.cc.output
+}
diff --git a/internal/runtime/testdata/import_git/import_git_5.txtar b/internal/runtime/testdata/import_git/import_git_5.txtar
new file mode 100644
index 0000000000..c5cefee502
--- /dev/null
+++ b/internal/runtime/testdata/import_git/import_git_5.txtar
@@ -0,0 +1,21 @@
+Import a module that contains an import.file with a relative import path inside of a declare.
+
+-- main.alloy --
+testcomponents.count "inc" {
+  frequency = "10ms"
+  max = 10
+}
+
+import.git "testImport" {
+  // Requires repo.git.tar to be extracted
+  repository = "./testdata/repo.git"
+  path = "module_import_file_in_declare.alloy"
+}
+
+testImport.a "cc" {
+  input = testcomponents.count.inc.count
+}
+
+testcomponents.summation "sum" {
+  input = testImport.a.cc.output
+}
diff --git a/internal/runtime/testdata/repo.git.tar b/internal/runtime/testdata/repo.git.tar
index 53147ced4e..eb55d336fe 100644
Binary files a/internal/runtime/testdata/repo.git.tar and b/internal/runtime/testdata/repo.git.tar differ