diff --git a/bundler/lib/bundler/plugin/index.rb b/bundler/lib/bundler/plugin/index.rb
index 0682d37772b2..99f3a875ee57 100644
--- a/bundler/lib/bundler/plugin/index.rb
+++ b/bundler/lib/bundler/plugin/index.rb
@@ -157,6 +157,8 @@ def installed_in_plugin_root?(name)
       # @param [Pathname] index file path
       # @param [Boolean] is the index file global index
       def load_index(index_file, global = false)
+        base = base_for_index(global)
+
         SharedHelpers.filesystem_access(index_file, :read) do |index_f|
           valid_file = index_f&.exist? && !index_f.size.zero?
           break unless valid_file
@@ -168,8 +170,8 @@ def load_index(index_file, global = false)
 
           @commands.merge!(index["commands"])
           @hooks.merge!(index["hooks"])
-          @load_paths.merge!(index["load_paths"])
-          @plugin_paths.merge!(index["plugin_paths"])
+          @load_paths.merge!(absolutize_load_paths(index["load_paths"], base))
+          @plugin_paths.merge!(absolutize_paths(index["plugin_paths"], base))
           @sources.merge!(index["sources"]) unless global
         end
       end
@@ -178,11 +180,13 @@ def load_index(index_file, global = false)
       # instance variables in YAML format. (The instance variables are supposed
       # to be only String key value pairs)
       def save_index
+        base = base_for_index(false)
+
         index = {
           "commands" => @commands,
           "hooks" => @hooks,
-          "load_paths" => @load_paths,
-          "plugin_paths" => @plugin_paths,
+          "load_paths" => relativize_load_paths(@load_paths, base),
+          "plugin_paths" => relativize_paths(@plugin_paths, base),
           "sources" => @sources,
         }
 
@@ -192,6 +196,60 @@ def save_index
           File.open(index_f, "w") {|f| f.puts YAMLSerializer.dump(index) }
         end
       end
+
+      def base_for_index(global)
+        global ? Plugin.global_root : Plugin.root
+      end
+
+      def relativize_paths(paths, base)
+        return paths unless paths
+
+        paths.transform_values do |path|
+          relativize_path(path, base)
+        end
+      end
+
+      def relativize_load_paths(paths, base)
+        return paths unless paths
+
+        paths.transform_values do |path_list|
+          Array(path_list).map {|path| relativize_path(path, base) }
+        end
+      end
+
+      def absolutize_paths(paths, base)
+        return {} unless paths
+
+        paths.transform_values do |path|
+          absolutize_path(path, base)
+        end
+      end
+
+      def absolutize_load_paths(paths, base)
+        return {} unless paths
+
+        paths.transform_values do |path_list|
+          Array(path_list).map {|path| absolutize_path(path, base) }
+        end
+      end
+
+      def relativize_path(path, base)
+        pathname = Pathname.new(path)
+        return path unless pathname.absolute?
+
+        base_path = Pathname.new(base)
+        if pathname == base_path || pathname.to_s.start_with?(base_path.to_s + File::SEPARATOR)
+          pathname.relative_path_from(base_path).to_s
+        else
+          path
+        end
+      end
+
+      def absolutize_path(path, base)
+        pathname = Pathname.new(path)
+        pathname = Pathname.new(base).join(pathname) unless pathname.absolute?
+        pathname.to_s
+      end
     end
   end
 end
diff --git a/bundler/spec/bundler/plugin/index_spec.rb b/bundler/spec/bundler/plugin/index_spec.rb
index 565fc9b088e3..2ef4323dd344 100644
--- a/bundler/spec/bundler/plugin/index_spec.rb
+++ b/bundler/spec/bundler/plugin/index_spec.rb
@@ -193,4 +193,48 @@
       include_examples "it cleans up"
     end
   end
+
+  describe "relative plugin paths" do
+    let(:plugin_name) { "relative-plugin" }
+
+    before do
+      Bundler::Plugin.reset!
+      allow(Bundler::SharedHelpers).to receive(:find_gemfile).and_return(bundled_app_gemfile)
+
+      plugin_root = Bundler::Plugin.root
+      FileUtils.mkdir_p(plugin_root)
+
+      path = plugin_root.join(plugin_name)
+      FileUtils.mkdir_p(path.join("lib"))
+
+      index.register_plugin(plugin_name, path.to_s, [path.join("lib").to_s], [], [], [])
+    end
+
+    it "stores plugin paths relative to the plugin root" do
+      require "yaml"
+      data = YAML.load_file(index.index_file)
+
+      expect(data["plugin_paths"][plugin_name]).to eq(plugin_name)
+      expect(data["load_paths"][plugin_name]).to eq([File.join(plugin_name, "lib")])
+    end
+
+    it "expands relative paths when the plugin root changes" do
+      old_index_file = index.index_file
+
+      new_root = tmp.join("moved_plugin_root")
+      FileUtils.mkdir_p(new_root)
+      FileUtils.cp(old_index_file, new_root.join("index"))
+
+      Bundler::Plugin.reset!
+      Bundler::Plugin.instance_variable_set(:@root, nil)
+      allow(Bundler::SharedHelpers).to receive(:find_gemfile).and_return(bundled_app_gemfile)
+      allow(Bundler::Plugin).to receive(:root).and_return(new_root)
+      allow(Bundler::Plugin).to receive(:local_root).and_return(new_root)
+
+      new_index = Index.new
+
+      expect(new_index.plugin_path(plugin_name)).to eq(new_root.join(plugin_name))
+      expect(new_index.load_paths(plugin_name)).to eq([new_root.join(plugin_name, "lib").to_s])
+    end
+  end
 end