diff --git a/src/bun.js/node/fs_events.zig b/src/bun.js/node/fs_events.zig
index 27132aa773..ed1e6100a0 100644
--- a/src/bun.js/node/fs_events.zig
+++ b/src/bun.js/node/fs_events.zig
@@ -374,23 +374,19 @@ pub const FSEventsLoop = struct {
                         path = path[handle_path.len..];
 
                         // Ignore events with path equal to directory itself
-                        if (path.len <= 1 and is_file) {
+                        if (path.len <= 1 and !is_file) {
                             continue;
                         }
-                        if (path.len == 0) {
-                            // Since we're using fsevents to watch the file itself, path == handle_path, and we now need to get the basename of the file back
-                            while (path.len > 0) {
-                                if (bun.strings.startsWithChar(path, '/')) {
-                                    path = path[1..];
-                                    break;
-                                } else {
-                                    path = path[1..];
-                                }
-                            }
 
+                        if (path.len == 0) {
+                            // Since we're using fsevents to watch the file itself handle_path == path, and we now need to get the basename of the file back
+                            const basename = bun.strings.lastIndexOfChar(handle_path, '/') orelse handle_path.len;
+                            path = handle_path[basename..];
                             // Created and Removed seem to be always set, but don't make sense
                             flags &= ~kFSEventsRenamed;
-                        } else {
+                        }
+
+                        if (bun.strings.startsWithChar(path, '/')) {
                             // Skip forward slash
                             path = path[1..];
                         }
diff --git a/src/bun.js/node/path_watcher.zig b/src/bun.js/node/path_watcher.zig
index 663858947b..2560e8ed62 100644
--- a/src/bun.js/node/path_watcher.zig
+++ b/src/bun.js/node/path_watcher.zig
@@ -239,16 +239,8 @@ pub const PathWatcherManager = struct {
                                     if (path.len <= 1) {
                                         continue;
                                     }
-                                    if (path.len == 0) {
-                                        while (path.len > 0) {
-                                            if (bun.strings.startsWithChar(path, '/')) {
-                                                path = path[1..];
-                                                break;
-                                            } else {
-                                                path = path[1..];
-                                            }
-                                        }
-                                    } else {
+
+                                    if (bun.strings.startsWithChar(path, '/')) {
                                         // Skip forward slash
                                         path = path[1..];
                                     }
diff --git a/test/js/node/watch/fixtures/relative.js b/test/js/node/watch/fixtures/relative.js
index 692d809ec9..01254e598a 100644
--- a/test/js/node/watch/fixtures/relative.js
+++ b/test/js/node/watch/fixtures/relative.js
@@ -3,7 +3,7 @@ try {
   const watcher = fs.watch("relative.txt", { signal: AbortSignal.timeout(2000) });
 
   watcher.on("change", function (event, filename) {
-    if (filename !== "relative.txt" && event !== "change") {
+    if (filename !== "relative.txt" || event !== "change") {
       console.error("fail");
       clearInterval(interval);
       watcher.close();
diff --git a/test/js/node/watch/fixtures/relative_dir.js b/test/js/node/watch/fixtures/relative_dir.js
new file mode 100644
index 0000000000..4ad6c17133
--- /dev/null
+++ b/test/js/node/watch/fixtures/relative_dir.js
@@ -0,0 +1,28 @@
+import fs from "fs";
+try {
+  const watcher = fs.watch("./myrelativedir/", { signal: AbortSignal.timeout(2000) });
+
+  watcher.on("change", function (event, filename) {
+    if (filename !== "relative.txt") {
+      console.error("fail", filename, event);
+      clearInterval(interval);
+      watcher.close();
+      process.exit(1);
+    } else {
+      clearInterval(interval);
+      watcher.close();
+    }
+  });
+  watcher.on("error", err => {
+    clearInterval(interval);
+    console.error(err.message);
+    process.exit(1);
+  });
+
+  const interval = setInterval(() => {
+    fs.writeFileSync("./myrelativedir/relative.txt", "world");
+  }, 10);
+} catch (err) {
+  console.error(err.message);
+  process.exit(1);
+}
diff --git a/test/js/node/watch/fs.watch.test.ts b/test/js/node/watch/fs.watch.test.ts
index 4a95fc13a6..72393ee9e0 100644
--- a/test/js/node/watch/fs.watch.test.ts
+++ b/test/js/node/watch/fs.watch.test.ts
@@ -64,6 +64,19 @@ describe("fs.watch", () => {
     }
   });
 
+  test("should work with relative dirs", done => {
+    try {
+      const myrelativedir = path.join(testDir, "myrelativedir");
+      try {
+        fs.mkdirSync(myrelativedir);
+      } catch {}
+      fs.writeFileSync(path.join(myrelativedir, "relative.txt"), "hello");
+      bunRunAsScript(testDir, path.join(import.meta.dir, "fixtures", "relative_dir.js"));
+      done();
+    } catch (e: any) {
+      done(e);
+    }
+  });
   test("add file/folder to folder", done => {
     let count = 0;
     const root = path.join(testDir, "add-directory");