diff --git a/CHANGELOG.adoc b/CHANGELOG.adoc
index d4e6e07f74..fd995fbee6 100644
--- a/CHANGELOG.adoc
+++ b/CHANGELOG.adoc
@@ -5,6 +5,10 @@
 
 == DFX
 
+=== feat: Better build scripts for type:custom
+
+Build scripts now always receive a CWD of the DFX project root, instead of wherever `+dfx+` was invoked from, and a bare script `+script.sh+` can be specified without needing to prefix with `+./+`.
+
 === feat: rust, custom, and asset canisters now include candid:service metadata
 
 Motoko canisters already included this metadata.
diff --git a/Cargo.lock b/Cargo.lock
index 2615725f72..6ceceede2c 100644
--- a/Cargo.lock
+++ b/Cargo.lock
@@ -1076,6 +1076,7 @@ dependencies = [
  "walkdir",
  "walrus",
  "wasmparser 0.86.0",
+ "which",
 ]
 
 [[package]]
@@ -4075,6 +4076,17 @@ dependencies = [
  "webpki",
 ]
 
+[[package]]
+name = "which"
+version = "4.2.5"
+source = "registry+https://github.com/rust-lang/crates.io-index"
+checksum = "5c4fb54e6113b6a8772ee41c3404fb0301ac79604489467e0a9ce1f3e97c24ae"
+dependencies = [
+ "either",
+ "lazy_static",
+ "libc",
+]
+
 [[package]]
 name = "winapi"
 version = "0.3.9"
diff --git a/e2e/assets/custom_canister/build.sh b/e2e/assets/custom_canister/build.sh
new file mode 100755
index 0000000000..b473e4cc25
--- /dev/null
+++ b/e2e/assets/custom_canister/build.sh
@@ -0,0 +1,2 @@
+#!/usr/bin/env bash
+echo CUSTOM_CANISTER2_BUILD_DONE
\ No newline at end of file
diff --git a/e2e/assets/custom_canister/dfx.json b/e2e/assets/custom_canister/dfx.json
index 7ad56db795..66454e0324 100644
--- a/e2e/assets/custom_canister/dfx.json
+++ b/e2e/assets/custom_canister/dfx.json
@@ -6,6 +6,12 @@
       "candid": "main.did",
       "wasm": "main.wasm",
       "build": "echo CUSTOM_CANISTER_BUILD_DONE"
+    },
+    "custom2": {
+      "type": "custom",
+      "candid": "main.did",
+      "wasm": "main.wasm",
+      "build": "build.sh"
     }
   },
   "defaults": {
diff --git a/e2e/tests-dfx/build.bash b/e2e/tests-dfx/build.bash
index a13d44671e..3710d4e130 100644
--- a/e2e/tests-dfx/build.bash
+++ b/e2e/tests-dfx/build.bash
@@ -128,11 +128,26 @@ teardown() {
   install_asset custom_canister
   dfx_start
   dfx canister create --all
-  assert_command dfx build
+  assert_command dfx build custom
   assert_match "CUSTOM_CANISTER_BUILD_DONE"
+  assert_command dfx build custom2
+  assert_match "CUSTOM_CANISTER2_BUILD_DONE"
 
   dfx canister install --all
   assert_command dfx canister call custom fromQuery
+  assert_command dfx canister call custom2 fromQuery
+}
+
+@test "custom canister build script picks local executable first" {
+  install_asset custom_canister
+  dfx_start
+  dfx canister create custom2
+  #shellcheck disable=SC2094
+  cat <<<"$(jq '.canisters.custom2.build="ln"' dfx.json)" >dfx.json
+  mv ./build.sh ./ln
+
+  assert_command dfx build custom2
+  assert_match CUSTOM_CANISTER2_BUILD_DONE
 }
 
 @test "build succeeds with network parameter" {
diff --git a/e2e/tests-dfx/error_context.bash b/e2e/tests-dfx/error_context.bash
index a73b2ea519..3e15aff331 100644
--- a/e2e/tests-dfx/error_context.bash
+++ b/e2e/tests-dfx/error_context.bash
@@ -171,5 +171,5 @@ teardown() {
     # expect to see the name of the canister
     assert_match "custom_bad_build_step"
     # expect to see the underlying cause
-    assert_match "No such file or directory"
+    assert_match "Cannot find command or file"
 }
diff --git a/src/dfx/Cargo.toml b/src/dfx/Cargo.toml
index 599a546f2e..e98dd6a41e 100644
--- a/src/dfx/Cargo.toml
+++ b/src/dfx/Cargo.toml
@@ -84,6 +84,7 @@ url = "2.1.0"
 walkdir = "2.2.9"
 walrus = "0.19.0"
 wasmparser = "0.86.0"
+which = "4.2.5"
 
 [dependencies.ic-agent]
 version = "0.17.0"
diff --git a/src/dfx/src/lib/builders/custom.rs b/src/dfx/src/lib/builders/custom.rs
index 77edd3c65f..0fbe0ffa2c 100644
--- a/src/dfx/src/lib/builders/custom.rs
+++ b/src/dfx/src/lib/builders/custom.rs
@@ -14,8 +14,8 @@ use ic_types::principal::Principal as CanisterId;
 use serde::Deserialize;
 use slog::info;
 use slog::Logger;
-use std::path::PathBuf;
-use std::process::Stdio;
+use std::path::{Path, PathBuf};
+use std::process::{Command, Stdio};
 
 /// Set of extras that can be specified in the dfx.json.
 struct CustomBuilderExtra {
@@ -139,7 +139,8 @@ impl CanisterBuilder for CustomBuilder {
                 .with_context(|| format!("Cannot parse command '{}'.", command))?;
             // No commands, noop.
             if !args.is_empty() {
-                run_command(args, &vars).with_context(|| format!("Failed to run {}.", command))?;
+                run_command(args, &vars, info.get_workspace_root())
+                    .with_context(|| format!("Failed to run {}.", command))?;
             }
         }
 
@@ -190,12 +191,17 @@ impl CanisterBuilder for CustomBuilder {
     }
 }
 
-fn run_command(args: Vec<String>, vars: &[super::Env<'_>]) -> DfxResult<()> {
+fn run_command(args: Vec<String>, vars: &[super::Env<'_>], cwd: &Path) -> DfxResult<()> {
     let (command_name, arguments) = args.split_first().unwrap();
-
-    let mut cmd = std::process::Command::new(command_name);
+    let canonicalized = cwd
+        .join(command_name)
+        .canonicalize()
+        .or_else(|_| which::which(command_name))
+        .map_err(|_| anyhow!("Cannot find command or file {command_name}"))?;
+    let mut cmd = Command::new(&canonicalized);
 
     cmd.args(arguments)
+        .current_dir(cwd)
         .stdout(Stdio::inherit())
         .stderr(Stdio::inherit());
 
@@ -205,7 +211,7 @@ fn run_command(args: Vec<String>, vars: &[super::Env<'_>]) -> DfxResult<()> {
 
     let output = cmd
         .output()
-        .with_context(|| format!("Error executing custom build step {:#?}", cmd))?;
+        .with_context(|| format!("Error executing custom build step {cmd:#?}"))?;
     if output.status.success() {
         Ok(())
     } else {