diff --git a/builtin/init-db.c b/builtin/init-db.c
index 6ca002893f4751..944ec77fe10327 100644
--- a/builtin/init-db.c
+++ b/builtin/init-db.c
@@ -502,6 +502,9 @@ int cmd_init_db(int argc, const char **argv, const char *prefix)
 	if (real_git_dir && !is_absolute_path(real_git_dir))
 		real_git_dir = real_pathdup(real_git_dir, 1);
 
+	if (template_dir && *template_dir && !is_absolute_path(template_dir))
+		template_dir = absolute_pathdup(template_dir);
+
 	if (argc == 1) {
 		int mkdir_tried = 0;
 	retry:
diff --git a/t/t0001-init.sh b/t/t0001-init.sh
index 77a224aafb8c63..0276d14a0ba66d 100755
--- a/t/t0001-init.sh
+++ b/t/t0001-init.sh
@@ -175,7 +175,7 @@ test_expect_success 'reinit' '
 test_expect_success 'init with --template' '
 	mkdir template-source &&
 	echo content >template-source/file &&
-	git init --template=../template-source template-custom &&
+	git init --template=template-source template-custom &&
 	test_cmp template-source/file template-custom/.git/file
 '
 
diff --git a/t/t1301-shared-repo.sh b/t/t1301-shared-repo.sh
index dfece751b57282..2dc853d1be5f0f 100755
--- a/t/t1301-shared-repo.sh
+++ b/t/t1301-shared-repo.sh
@@ -136,7 +136,7 @@ test_expect_success POSIXPERM 'forced modes' '
 	(
 		cd new &&
 		umask 002 &&
-		git init --shared=0660 --template=../templates &&
+		git init --shared=0660 --template=templates &&
 		>frotz &&
 		git add frotz &&
 		git commit -a -m initial &&
@@ -192,7 +192,7 @@ test_expect_success POSIXPERM 're-init respects core.sharedrepository (remote)'
 	umask 0022 &&
 	git init --bare --shared=0666 child.git &&
 	test_path_is_missing child.git/foo &&
-	git init --bare --template=../templates child.git &&
+	git init --bare --template=templates child.git &&
 	echo "-rw-rw-rw-" >expect &&
 	test_modebits child.git/foo >actual &&
 	test_cmp expect actual
@@ -203,7 +203,7 @@ test_expect_success POSIXPERM 'template can set core.sharedrepository' '
 	umask 0022 &&
 	git config core.sharedrepository 0666 &&
 	cp .git/config templates/config &&
-	git init --bare --template=../templates child.git &&
+	git init --bare --template=templates child.git &&
 	echo "-rw-rw-rw-" >expect &&
 	test_modebits child.git/HEAD >actual &&
 	test_cmp expect actual