diff --git a/internal/cadence/lint_test.go b/internal/cadence/lint_test.go
index 234af4507..af12a1b24 100644
--- a/internal/cadence/lint_test.go
+++ b/internal/cadence/lint_test.go
@@ -308,6 +308,28 @@ func Test_Lint(t *testing.T) {
 			results,
 		)
 	})
+
+	t.Run("resolves nested imports when contract imported by name", func(t *testing.T) {
+		t.Parallel()
+
+		state := setupMockState(t)
+
+		results, err := lintFiles(state, "TransactionImportingContractWithNestedImports.cdc")
+		require.NoError(t, err)
+
+		require.Equal(t,
+			&lintResult{
+				Results: []fileResult{
+					{
+						FilePath:    "TransactionImportingContractWithNestedImports.cdc",
+						Diagnostics: []analysis.Diagnostic{},
+					},
+				},
+				exitCode: 0,
+			},
+			results,
+		)
+	})
 }
 
 func setupMockState(t *testing.T) *flowkit.State {
@@ -380,6 +402,42 @@ func setupMockState(t *testing.T) *flowkit.State {
 		log(RLP.getType())
 	}`), 0644)
 
+	// Regression test files for nested import bug
+	_ = afero.WriteFile(mockFs, "Helper.cdc", []byte(`
+	access(all) contract Helper {
+		access(all) let name: String
+		
+		init() {
+			self.name = "Helper"
+		}
+		
+		access(all) fun greet(): String {
+			return "Hello from ".concat(self.name)
+		}
+	}
+	`), 0644)
+
+	_ = afero.WriteFile(mockFs, "ContractWithNestedImports.cdc", []byte(`
+	import Helper from "./Helper.cdc"
+	
+	access(all) contract ContractWithNestedImports {
+		access(all) fun test(): String {
+			return Helper.greet()
+		}
+		init() {}
+	}
+	`), 0644)
+
+	_ = afero.WriteFile(mockFs, "TransactionImportingContractWithNestedImports.cdc", []byte(`
+	import ContractWithNestedImports from "ContractWithNestedImports"
+	
+	transaction() {
+		prepare(signer: auth(Storage) &Account) {
+			log(ContractWithNestedImports.test())
+		}
+	}
+	`), 0644)
+
 	rw := afero.Afero{Fs: mockFs}
 	state, err := flowkit.Init(rw)
 	require.NoError(t, err)
@@ -389,6 +447,14 @@ func setupMockState(t *testing.T) *flowkit.State {
 		Name:     "NoError",
 		Location: "NoError.cdc",
 	})
+	state.Contracts().AddOrUpdate(config.Contract{
+		Name:     "Helper",
+		Location: "Helper.cdc",
+	})
+	state.Contracts().AddOrUpdate(config.Contract{
+		Name:     "ContractWithNestedImports",
+		Location: "ContractWithNestedImports.cdc",
+	})
 
 	return state
 }
diff --git a/internal/cadence/linter.go b/internal/cadence/linter.go
index c561a72be..d3815d156 100644
--- a/internal/cadence/linter.go
+++ b/internal/cadence/linter.go
@@ -21,7 +21,6 @@ package cadence
 import (
 	"errors"
 	"fmt"
-	"path/filepath"
 	"strings"
 
 	"github.com/onflow/flow-cli/internal/util"
@@ -196,11 +195,18 @@ func (l *linter) handleImport(
 			Elaboration: helpersChecker.Elaboration,
 		}, nil
 	default:
+		// Normalize relative path imports to absolute paths
+		if util.IsPathLocation(importedLocation) {
+			importedLocation = util.NormalizePathLocation(checker.Location, importedLocation)
+		}
+
 		filepath, err := l.resolveImportFilepath(importedLocation, checker.Location)
 		if err != nil {
 			return nil, err
 		}
 
+		fileLocation := common.StringLocation(filepath)
+
 		importedChecker, ok := l.checkers[filepath]
 		if !ok {
 			code, err := l.state.ReadFile(filepath)
@@ -219,7 +225,7 @@ func (l *linter) handleImport(
 				}
 			}
 
-			importedChecker, err = checker.SubChecker(importedProgram, importedLocation)
+			importedChecker, err = checker.SubChecker(importedProgram, fileLocation)
 			if err != nil {
 				return nil, err
 			}
@@ -246,7 +252,7 @@ func (l *linter) resolveImportFilepath(
 ) {
 	switch location := location.(type) {
 	case common.StringLocation:
-		// If the location is not a cadence file try getting the code by identifier
+		// Resolve by contract name from flowkit config
 		if !strings.Contains(location.String(), ".cdc") {
 			contract, err := l.state.Contracts().ByName(location.String())
 			if err != nil {
@@ -256,14 +262,7 @@ func (l *linter) resolveImportFilepath(
 			return contract.Location, nil
 		}
 
-		// If the location is a cadence file, resolve relative to the parent location
-		parentPath := ""
-		if parentLocation != nil {
-			parentPath = parentLocation.String()
-		}
-
-		resolvedPath := filepath.Join(filepath.Dir(parentPath), location.String())
-		return resolvedPath, nil
+		return location.String(), nil
 	default:
 		return "", fmt.Errorf("unsupported location: %T", location)
 	}
diff --git a/internal/test/test.go b/internal/test/test.go
index 0d84f825e..71ef29b4e 100644
--- a/internal/test/test.go
+++ b/internal/test/test.go
@@ -453,7 +453,7 @@ func importResolver(scriptPath string, state *flowkit.State) cdcTests.ImportReso
 			relativePath := location.String()
 
 			if strings.Contains(relativePath, helperScriptSubstr) {
-				importedScriptFilePath := absolutePath(scriptPath, relativePath)
+				importedScriptFilePath := util.AbsolutePath(scriptPath, relativePath)
 				scriptCode, err := state.ReadFile(importedScriptFilePath)
 				if err != nil {
 					return "", nil
@@ -482,7 +482,7 @@ func importResolver(scriptPath string, state *flowkit.State) cdcTests.ImportReso
 
 func fileResolver(scriptPath string, state *flowkit.State) cdcTests.FileResolver {
 	return func(path string) (string, error) {
-		importFilePath := absolutePath(scriptPath, path)
+		importFilePath := util.AbsolutePath(scriptPath, path)
 
 		content, err := state.ReadFile(importFilePath)
 		if err != nil {
@@ -493,14 +493,6 @@ func fileResolver(scriptPath string, state *flowkit.State) cdcTests.FileResolver
 	}
 }
 
-func absolutePath(basePath, filePath string) string {
-	if filepath.IsAbs(filePath) {
-		return filePath
-	}
-
-	return filepath.Join(filepath.Dir(basePath), filePath)
-}
-
 type result struct {
 	Results        map[string]cdcTests.Results
 	CoverageReport *runtime.CoverageReport
diff --git a/internal/util/files.go b/internal/util/files.go
index 8c2e72c3b..956f16316 100644
--- a/internal/util/files.go
+++ b/internal/util/files.go
@@ -22,6 +22,8 @@ import (
 	"fmt"
 	"path/filepath"
 	"strings"
+
+	"github.com/onflow/cadence/common"
 )
 
 func AddCDCExtension(name string) string {
@@ -34,3 +36,35 @@ func AddCDCExtension(name string) string {
 func StripCDCExtension(name string) string {
 	return strings.TrimSuffix(name, filepath.Ext(name))
 }
+
+// AbsolutePath resolves a relative path against a base file path.
+// If the relative path is already absolute, it returns it as-is.
+// Otherwise, it joins the relative path to the parent directory of the base path.
+func AbsolutePath(basePath, relativePath string) string {
+	if filepath.IsAbs(relativePath) {
+		return relativePath
+	}
+	return filepath.Join(filepath.Dir(basePath), relativePath)
+}
+
+// IsPathLocation returns true if the location is a file path (contains .cdc)
+func IsPathLocation(location common.Location) bool {
+	stringLocation, ok := location.(common.StringLocation)
+	if !ok {
+		return false
+	}
+	return strings.Contains(stringLocation.String(), ".cdc")
+}
+
+// NormalizePathLocation normalizes a relative path import against a base location
+func NormalizePathLocation(base, relative common.Location) common.Location {
+	baseString, baseOk := base.(common.StringLocation)
+	relativeString, relativeOk := relative.(common.StringLocation)
+
+	if !baseOk || !relativeOk {
+		return relative
+	}
+
+	normalizedPath := AbsolutePath(baseString.String(), relativeString.String())
+	return common.StringLocation(normalizedPath)
+}