diff --git a/clang/lib/Frontend/CompilerInstance.cpp b/clang/lib/Frontend/CompilerInstance.cpp
--- a/clang/lib/Frontend/CompilerInstance.cpp
+++ b/clang/lib/Frontend/CompilerInstance.cpp
@@ -781,12 +781,7 @@
       continue;
     }
 
-    // If '-working-directory' was passed, the output filename should be
-    // relative to that.
-    SmallString<128> NewOutFile(OF.Filename);
-    FileMgr->FixupRelativePath(NewOutFile);
-
-    llvm::Error E = OF.File->keep(NewOutFile);
+    llvm::Error E = OF.File->keep(OF.Filename);
     if (!E)
       continue;
 
@@ -849,6 +844,15 @@
   assert((!CreateMissingDirectories || UseTemporary) &&
          "CreateMissingDirectories is only allowed when using temporary files");
 
+  // If '-working-directory' was passed, the output filename should be
+  // relative to that.
+  Optional<SmallString<128>> AbsPath;
+  if (OutputPath != "-" && !llvm::sys::path::is_absolute(OutputPath)) {
+    AbsPath.emplace(OutputPath);
+    FileMgr->FixupRelativePath(*AbsPath);
+    OutputPath = *AbsPath;
+  }
+
   std::unique_ptr<llvm::raw_fd_ostream> OS;
   Optional<StringRef> OSFile;
 
diff --git a/clang/test/Frontend/output-paths.c b/clang/test/Frontend/output-paths.c
--- a/clang/test/Frontend/output-paths.c
+++ b/clang/test/Frontend/output-paths.c
@@ -2,3 +2,12 @@
 // RUN: FileCheck -check-prefix=OUTPUTFAIL -DMSG=%errc_ENOENT -input-file=%t %s
 
 // OUTPUTFAIL: error: unable to open output file '{{.*}}doesnotexist{{.}}somename': '[[MSG]]'
+
+// Check that -working-directory is respected when diagnosing output failures.
+//
+// RUN: rm -rf %t.d && mkdir -p %t.d/%basename_t-inner.d
+// RUN: %clang_cc1 -emit-llvm -working-directory %t.d -E -o %basename_t-inner.d/somename %s -verify
+// expected-no-diagnostics
+
+// RUN: %clang_cc1 -working-directory %t.d -E %s -o - | FileCheck %s
+// CHECK: # 1