diff --git a/CHANGES.md b/CHANGES.md
index 96ab9db68..c4dc10442 100644
--- a/CHANGES.md
+++ b/CHANGES.md
@@ -4,6 +4,8 @@ unreleased
   + merlin binary
     - Respect the `EXCLUDE_QUERY_DIR` configuration directive when looking for cmt
       files (#1854)
+    - Fix occurrences bug in which relative paths in index files are resolved against the
+      PWD rather than the SOURCE_ROOT (#1855)
 
 merlin 5.2.1
 ============
diff --git a/src/analysis/occurrences.ml b/src/analysis/occurrences.ml
index 4be51bca9..829c8146c 100644
--- a/src/analysis/occurrences.ml
+++ b/src/analysis/occurrences.ml
@@ -234,7 +234,10 @@ let locs_of ~config ~env ~typer_result ~pos ~scope path =
        is not necessary for correctness, it makes the output a bit nicer. *)
     let canonicalize_file_in_loc ({ txt; loc } : 'a Location.loc) :
         'a Location.loc =
-      let file = Misc.canonicalize_filename loc.loc_start.pos_fname in
+      let file =
+        Misc.canonicalize_filename ?cwd:config.merlin.source_root
+          loc.loc_start.pos_fname
+      in
       { txt; loc = set_fname ~file loc }
     in
     let locs = Lid_set.map canonicalize_file_in_loc locs in
diff --git a/tests/test-dirs/occurrences/project-wide/pwo-canonicalize.t b/tests/test-dirs/occurrences/project-wide/pwo-canonicalize.t
index ad3e8cae5..5a7b91f72 100644
--- a/tests/test-dirs/occurrences/project-wide/pwo-canonicalize.t
+++ b/tests/test-dirs/occurrences/project-wide/pwo-canonicalize.t
@@ -12,10 +12,10 @@
   > SOURCE_ROOT .
   > EOF
 
-  $ ocamlc -bin-annot -bin-annot-occurrences -c lib.ml main.ml
+  $ $OCAMLC -bin-annot -bin-annot-occurrences -c lib.ml main.ml
   $ ocaml-index aggregate main.cmt lib.cmt --root . --rewrite-root
 
-  $ ocamlmerlin single occurrences -scope project -identifier-at 1:4 \
+  $ $MERLIN single occurrences -scope project -identifier-at 1:4 \
   > -filename lib.ml < lib.ml | jq .value
   [
     {
diff --git a/tests/test-dirs/occurrences/project-wide/pwo-relative.t b/tests/test-dirs/occurrences/project-wide/pwo-relative.t
new file mode 100644
index 000000000..1c9e928b5
--- /dev/null
+++ b/tests/test-dirs/occurrences/project-wide/pwo-relative.t
@@ -0,0 +1,95 @@
+This test demonstrates project-wide occurrences resolving file paths relative to the
+correct directory.
+
+Create a small ocaml project
+  $ mkdir main
+  $ mkdir lib
+  $ cat > lib/foo.ml << EOF
+  > let bar = "bar"
+  > let () = print_string bar
+  > EOF
+
+  $ cat > main/main.ml << EOF
+  > let x = Foo.bar
+  > let () = print_string Foo.bar
+  > EOF
+
+Compile project
+  $ ( cd lib ; $OCAMLC -bin-annot -bin-annot-occurrences -c foo.ml )
+  $ ( cd main ; $OCAMLC -bin-annot -bin-annot-occurrences -I ../lib -c main.ml )
+
+Build indices
+  $ ( cd lib ; ocaml-index aggregate foo.cmt --root ./lib --rewrite-root -o lib.stanza.merlin-index )
+  $ ( cd main ; ocaml-index aggregate main.cmt --root ./main --rewrite-root -o main.stanza.merlin-index )
+  $ ocaml-index aggregate main/main.stanza.merlin-index lib/lib.stanza.merlin-index --root . --rewrite-root -o global.merlin-index
+  $ ocaml-index dump global.merlin-index
+  3 uids:
+  {uid: Foo.0; locs:
+     "bar": File "./lib/foo.ml", line 1, characters 4-7;
+     "bar": File "./lib/foo.ml", line 2, characters 22-25;
+     "Foo.bar": File "./main/main.ml", line 1, characters 8-15;
+     "Foo.bar": File "./main/main.ml", line 2, characters 22-29
+   uid: Main.0; locs: "x": File "./main/main.ml", line 1, characters 4-5
+   uid: Stdlib.312; locs:
+     "print_string": File "./lib/foo.ml", line 2, characters 9-21;
+     "print_string": File "./main/main.ml", line 2, characters 9-21
+   }, 0 approx shapes: {}, and shapes for CUS .
+
+Configure merlin
+  $ cat > main/.merlin << EOF
+  > INDEX ../global.merlin-index
+  > SOURCE_ROOT ..
+  > S .
+  > B ../lib
+  > S ../lib
+  > EOF
+
+Perform the occurrences query
+  $ ( cd main ; $MERLIN single occurrences -scope project -identifier-at 1:13 \
+  > -filename main.ml < main.ml | jq .value )
+  [
+    {
+      "file": "$TESTCASE_ROOT/lib/foo.ml",
+      "start": {
+        "line": 1,
+        "col": 4
+      },
+      "end": {
+        "line": 1,
+        "col": 7
+      }
+    },
+    {
+      "file": "$TESTCASE_ROOT/lib/foo.ml",
+      "start": {
+        "line": 2,
+        "col": 22
+      },
+      "end": {
+        "line": 2,
+        "col": 25
+      }
+    },
+    {
+      "file": "$TESTCASE_ROOT/main/main.ml",
+      "start": {
+        "line": 1,
+        "col": 12
+      },
+      "end": {
+        "line": 1,
+        "col": 15
+      }
+    },
+    {
+      "file": "$TESTCASE_ROOT/main/main.ml",
+      "start": {
+        "line": 2,
+        "col": 26
+      },
+      "end": {
+        "line": 2,
+        "col": 29
+      }
+    }
+  ]