diff --git a/Cargo.lock b/Cargo.lock
index 3fd0ec0a..2ca6afc5 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -709,6 +709,12 @@ version = "1.0.11"
 source = "registry+https://github.com/rust-lang/crates.io-index"
 checksum = "d01a5bd0424d00070b0098dd17ebca6f961a959dead1dbcbbbc1d1cd8d3deeba"
 
+[[package]]
+name = "pathdiff"
+version = "0.2.2"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "d61c5ce1153ab5b689d0c074c4e7fc613e942dfb7dd9eea5ab202d2ad91fe361"
+
 [[package]]
 name = "percent-encoding"
 version = "2.2.0"
@@ -933,6 +939,7 @@ dependencies = [
  "globset",
  "lazy_static",
  "num_cpus",
+ "pathdiff",
  "pretty_assertions",
  "profiling",
  "selene-lib",
diff --git a/selene/Cargo.toml b/selene/Cargo.toml
index e5c08751..88424393 100644
--- a/selene/Cargo.toml
+++ b/selene/Cargo.toml
@@ -35,6 +35,7 @@ tracy-client = { version = "0.14.1", optional = true }
 threadpool = "1.8"
 toml.workspace = true
 ureq = { version = "2.6.2", features = ["json"], optional = true }
+pathdiff = "0.2.2"
 
 [dev-dependencies]
 pretty_assertions = "1.3"
diff --git a/selene/src/main.rs b/selene/src/main.rs
index 4e9bc3ac..5ad0ede8 100644
--- a/selene/src/main.rs
+++ b/selene/src/main.rs
@@ -643,6 +643,26 @@ fn start(mut options: opts::Options) {
 
     let pool = ThreadPool::new(options.num_threads);
 
+    // Directory for matching files pattern.
+    // If user provides a config file, we use that as our working directory, otherwise fallback to the current directory.
+    // The working directory needs to be an absolute path to match with paths in different directories.
+    let working_directory = config_directory.or_else(|| current_dir.canonicalize().ok());
+
+    let is_excluded = |path: &Path| -> bool {
+        if options.no_exclude {
+            return false;
+        }
+
+        // File pattern between the path we are checking and current working directory.
+        let file_pattern = working_directory.as_ref().and_then(|dir| {
+            path.canonicalize()
+                .ok()
+                .and_then(|path| pathdiff::diff_paths(path, dir))
+        });
+
+        file_pattern.is_some_and(|pattern| exclude_set.is_match(&pattern))
+    };
+
     for filename in &options.files {
         if filename == "-" {
             let checker = Arc::clone(&checker);
@@ -656,7 +676,7 @@ fn start(mut options: opts::Options) {
                     let checker = Arc::clone(&checker);
                     let filename = filename.to_owned();
 
-                    if !options.no_exclude && exclude_set.is_match(&filename) {
+                    if is_excluded(Path::new(&filename)) {
                         continue;
                     }
 
@@ -678,7 +698,7 @@ fn start(mut options: opts::Options) {
                         for entry in glob {
                             match entry {
                                 Ok(path) => {
-                                    if !options.no_exclude && exclude_set.is_match(&path) {
+                                    if is_excluded(&path) {
                                         continue;
                                     }