diff --git a/.bazelrc b/.bazelrc
index a6bde4f8a..57755f37a 100644
--- a/.bazelrc
+++ b/.bazelrc
@@ -1,6 +1,9 @@
 # This file contains options passed to Bazel when running tests.
 # They are used by Travis CI and by non-Bazel test scripts.
 
+# TODO: Make all tests work with Bzlmod.
+common --noenable_bzlmod
+
 build:ci --verbose_failures
 build:ci --sandbox_debug
 build:ci --spawn_strategy=standalone
diff --git a/.bazelversion b/.bazelversion
index 21c8c7b46..b26a34e47 100644
--- a/.bazelversion
+++ b/.bazelversion
@@ -1 +1 @@
-7.1.1
+7.2.1
diff --git a/cmd/gazelle/integration_test.go b/cmd/gazelle/integration_test.go
index c5002b0c3..cab375b50 100644
--- a/cmd/gazelle/integration_test.go
+++ b/cmd/gazelle/integration_test.go
@@ -4751,3 +4751,97 @@ require (
 		t.Fatalf("got %s ; want %s; diff %s", string(got), want, cmp.Diff(string(got), want))
 	}
 }
+
+func TestCgoFlagsHaveExternalPrefix(t *testing.T) {
+	files := []testtools.FileSpec{
+		{
+			Path:    "external/com_example_foo_v2/go.mod",
+			Content: "module example.com/foo/v2",
+		}, {
+			Path: "external/com_example_foo_v2/cgo_static.go",
+			Content: `
+package duckdb
+
+/*
+#cgo LDFLAGS: -lstdc++ -lm -ldl -L${SRCDIR}/deps
+*/
+import "C"
+`,
+		},
+	}
+	dir, cleanup := testtools.CreateFiles(t, files)
+	defer cleanup()
+
+	repoRoot := filepath.Join(dir, "external", "com_example_foo_v2")
+
+	args := []string{"update", "-repo_root", repoRoot, "-go_prefix", "example.com/foo/v2", "-go_repository_mode", "-go_repository_module_mode"}
+	if err := runGazelle(repoRoot, args); err != nil {
+		t.Fatal(err)
+	}
+
+	testtools.CheckFiles(t, repoRoot, []testtools.FileSpec{
+		{
+			Path: "BUILD.bazel",
+			Content: `
+load("@io_bazel_rules_go//go:def.bzl", "go_library")
+
+go_library(
+    name = "foo",
+    srcs = ["cgo_static.go"],
+    cgo = True,
+    clinkopts = ["-lstdc++ -lm -ldl -Lexternal/com_example_foo_v2/deps"],
+    importpath = "example.com/foo/v2",
+    importpath_aliases = ["example.com/foo"],
+    visibility = ["//visibility:public"],
+)
+`,
+		},
+	})
+}
+
+func TestCgoFlagsHaveDotDotPrefixWithSiblingRepositoryLayout(t *testing.T) {
+	files := []testtools.FileSpec{
+		{
+			Path:    "execroot/com_example_foo_v2/go.mod",
+			Content: "module example.com/foo/v2",
+		}, {
+			Path: "execroot/com_example_foo_v2/cgo_static.go",
+			Content: `
+package duckdb
+
+/*
+#cgo LDFLAGS: -lstdc++ -lm -ldl -L${SRCDIR}/deps
+*/
+import "C"
+`,
+		},
+	}
+	dir, cleanup := testtools.CreateFiles(t, files)
+	defer cleanup()
+
+	repoRoot := filepath.Join(dir, "execroot", "com_example_foo_v2")
+
+	args := []string{"update", "-repo_root", repoRoot, "-go_prefix", "example.com/foo/v2", "-go_repository_mode", "-go_repository_module_mode"}
+	if err := runGazelle(repoRoot, args); err != nil {
+		t.Fatal(err)
+	}
+
+	testtools.CheckFiles(t, repoRoot, []testtools.FileSpec{
+		{
+			Path: "BUILD.bazel",
+			Content: `
+load("@io_bazel_rules_go//go:def.bzl", "go_library")
+
+go_library(
+    name = "foo",
+    srcs = ["cgo_static.go"],
+    cgo = True,
+    clinkopts = ["-lstdc++ -lm -ldl -L../com_example_foo_v2/deps"],
+    importpath = "example.com/foo/v2",
+    importpath_aliases = ["example.com/foo"],
+    visibility = ["//visibility:public"],
+)
+`,
+		},
+	})
+}
diff --git a/language/go/fileinfo.go b/language/go/fileinfo.go
index eabbefbf2..38a95665b 100644
--- a/language/go/fileinfo.go
+++ b/language/go/fileinfo.go
@@ -211,7 +211,7 @@ func otherFileInfo(path string) fileInfo {
 // will be returned.
 // This function is intended to match go/build.Context.Import.
 // TODD(#53): extract canonical import path
-func goFileInfo(path, rel string) fileInfo {
+func goFileInfo(path, srcdir string) fileInfo {
 	info := fileNameInfo(path)
 	fset := token.NewFileSet()
 	pf, err := parser.ParseFile(fset, info.path, nil, parser.ImportsOnly|parser.ParseComments)
@@ -254,7 +254,7 @@ func goFileInfo(path, rel string) fileInfo {
 					cg = d.Doc
 				}
 				if cg != nil {
-					if err := saveCgo(&info, rel, cg); err != nil {
+					if err := saveCgo(&info, srcdir, cg); err != nil {
 						log.Printf("%s: error reading go file: %v", info.path, err)
 					}
 				}
@@ -317,7 +317,7 @@ func goFileInfo(path, rel string) fileInfo {
 // saveCgo extracts CFLAGS, CPPFLAGS, CXXFLAGS, and LDFLAGS directives
 // from a comment above a "C" import. This is intended to match logic in
 // go/build.Context.saveCgo.
-func saveCgo(info *fileInfo, rel string, cg *ast.CommentGroup) error {
+func saveCgo(info *fileInfo, srcdir string, cg *ast.CommentGroup) error {
 	text := cg.Text()
 	for _, line := range strings.Split(text, "\n") {
 		orig := line
@@ -355,7 +355,7 @@ func saveCgo(info *fileInfo, rel string, cg *ast.CommentGroup) error {
 		}
 
 		for i, opt := range opts {
-			if opt, ok = expandSrcDir(opt, rel); !ok {
+			if opt, ok = expandSrcDir(opt, srcdir); !ok {
 				return fmt.Errorf("%s: malformed #cgo argument: %s", info.path, orig)
 			}
 			opts[i] = opt
@@ -478,8 +478,10 @@ func expandSrcDir(str string, srcdir string) (string, bool) {
 // See golang.org/issue/6038.
 // The @ is for OS X. See golang.org/issue/13720.
 // The % is for Jenkins. See golang.org/issue/16959.
+// The ~ is for Bzlmod as it is used as a separator in repository names. It is special in shells (which we don't pass
+// it to) and on Windows (where it can still be part of legitimate short paths).
 const (
-	safeString = "+-.,/0123456789=ABCDEFGHIJKLMNOPQRSTUVWXYZ_abcdefghijklmnopqrstuvwxyz:$@%"
+	safeString = "+-.,/0123456789=ABCDEFGHIJKLMNOPQRSTUVWXYZ_abcdefghijklmnopqrstuvwxyz:$@%~"
 	safeSpaces = " "
 )
 
diff --git a/language/go/generate.go b/language/go/generate.go
index 9e3ed9aaa..e0cc1c286 100644
--- a/language/go/generate.go
+++ b/language/go/generate.go
@@ -36,6 +36,7 @@ func (gl *goLang) GenerateRules(args language.GenerateArgs) language.GenerateRes
 	// Extract information about proto files. We need this to exclude .pb.go
 	// files and generate go_proto_library rules.
 	c := args.Config
+	gc := getGoConfig(c)
 	pcMode := getProtoMode(c)
 
 	// This is a collection of proto_library rule names that have a corresponding
@@ -117,11 +118,27 @@ func (gl *goLang) GenerateRules(args language.GenerateArgs) language.GenerateRes
 	}
 
 	// Build a set of packages from files in this directory.
+	srcdir := args.Rel
+	if gc.goRepositoryMode {
+		// cgo opts such as '-L${SRCDIR}/libs' should become
+		// '-Lexternal/my_repo~/libs' in an external repo.
+		// We obtain the path from the repo root to support both cases of
+		// --experimental_sibling_repository_layout.
+		slashPath := filepath.ToSlash(c.RepoRoot)
+		segments := strings.Split(slashPath, "/")
+		repoName := segments[len(segments)-1]
+		previousSegment := segments[len(segments)-2]
+		if previousSegment == "external" {
+			srcdir = path.Join("external", repoName, srcdir)
+		} else {
+			srcdir = path.Join("..", repoName, srcdir)
+		}
+	}
 	goFileInfos := make([]fileInfo, len(goFiles))
 	var er *embedResolver
 	for i, name := range goFiles {
 		path := filepath.Join(args.Dir, name)
-		goFileInfos[i] = goFileInfo(path, args.Rel)
+		goFileInfos[i] = goFileInfo(path, srcdir)
 		if len(goFileInfos[i].embeds) > 0 && er == nil {
 			er = newEmbedResolver(args.Dir, args.Rel, c.ValidBuildFileNames, gl.goPkgRels, args.Subdirs, args.RegularFiles, args.GenFiles)
 		}
diff --git a/tests/bcr/go_mod/.bazelversion b/tests/bcr/go_mod/.bazelversion
index 21c8c7b46..b26a34e47 100644
--- a/tests/bcr/go_mod/.bazelversion
+++ b/tests/bcr/go_mod/.bazelversion
@@ -1 +1 @@
-7.1.1
+7.2.1
diff --git a/tests/bcr/go_work/.bazelversion b/tests/bcr/go_work/.bazelversion
index a8907c025..b26a34e47 100644
--- a/tests/bcr/go_work/.bazelversion
+++ b/tests/bcr/go_work/.bazelversion
@@ -1 +1 @@
-7.0.2
+7.2.1