diff --git a/reposerver/repository/repository.go b/reposerver/repository/repository.go
index 41f26b1f434b8..5d11a6438272d 100644
--- a/reposerver/repository/repository.go
+++ b/reposerver/repository/repository.go
@@ -1389,7 +1389,7 @@ func GenerateManifests(ctx context.Context, appPath, repoRoot, revision string,
 		if q.KustomizeOptions != nil {
 			kustomizeBinary = q.KustomizeOptions.BinaryPath
 		}
-		k := kustomize.NewKustomizeApp(appPath, q.Repo.GetGitCreds(gitCredsStore), repoURL, kustomizeBinary)
+		k := kustomize.NewKustomizeApp(repoRoot, appPath, q.Repo.GetGitCreds(gitCredsStore), repoURL, kustomizeBinary)
 		targetObjs, _, err = k.Build(q.ApplicationSource.Kustomize, q.KustomizeOptions, env)
 	case v1alpha1.ApplicationSourceTypePlugin:
 		pluginName := ""
@@ -1976,7 +1976,7 @@ func (s *Service) GetAppDetails(ctx context.Context, q *apiclient.RepoServerAppD
 				return err
 			}
 		case v1alpha1.ApplicationSourceTypeKustomize:
-			if err := populateKustomizeAppDetails(res, q, opContext.appPath, commitSHA, s.gitCredsStore); err != nil {
+			if err := populateKustomizeAppDetails(res, q, repoRoot, opContext.appPath, commitSHA, s.gitCredsStore); err != nil {
 				return err
 			}
 		case v1alpha1.ApplicationSourceTypePlugin:
@@ -2117,13 +2117,13 @@ func walkHelmValueFilesInPath(root string, valueFiles *[]string) filepath.WalkFu
 	}
 }
 
-func populateKustomizeAppDetails(res *apiclient.RepoAppDetailsResponse, q *apiclient.RepoServerAppDetailsQuery, appPath string, reversion string, credsStore git.CredsStore) error {
+func populateKustomizeAppDetails(res *apiclient.RepoAppDetailsResponse, q *apiclient.RepoServerAppDetailsQuery, repoRoot string, appPath string, reversion string, credsStore git.CredsStore) error {
 	res.Kustomize = &apiclient.KustomizeAppSpec{}
 	kustomizeBinary := ""
 	if q.KustomizeOptions != nil {
 		kustomizeBinary = q.KustomizeOptions.BinaryPath
 	}
-	k := kustomize.NewKustomizeApp(appPath, q.Repo.GetGitCreds(credsStore), q.Repo.Repo, kustomizeBinary)
+	k := kustomize.NewKustomizeApp(repoRoot, appPath, q.Repo.GetGitCreds(credsStore), q.Repo.Repo, kustomizeBinary)
 	fakeManifestRequest := apiclient.ManifestRequest{
 		AppName:           q.AppName,
 		Namespace:         "", // FIXME: omit it for now
diff --git a/util/kustomize/kustomize.go b/util/kustomize/kustomize.go
index 2487b14b4903b..b6c0ff1788ca9 100644
--- a/util/kustomize/kustomize.go
+++ b/util/kustomize/kustomize.go
@@ -35,8 +35,9 @@ type Kustomize interface {
 }
 
 // NewKustomizeApp create a new wrapper to run commands on the `kustomize` command-line tool.
-func NewKustomizeApp(path string, creds git.Creds, fromRepo string, binaryPath string) Kustomize {
+func NewKustomizeApp(repoRoot string, path string, creds git.Creds, fromRepo string, binaryPath string) Kustomize {
 	return &kustomize{
+		repoRoot:   repoRoot,
 		path:       path,
 		creds:      creds,
 		repo:       fromRepo,
@@ -45,6 +46,8 @@ func NewKustomizeApp(path string, creds git.Creds, fromRepo string, binaryPath s
 }
 
 type kustomize struct {
+	// path to the Git repository root
+	repoRoot string
 	// path inside the checked out tree
 	path string
 	// creds structure
@@ -301,6 +304,7 @@ func (k *kustomize) Build(opts *v1alpha1.ApplicationSourceKustomize, kustomizeOp
 		cmd = exec.Command(k.getBinaryPath(), "build", k.path)
 	}
 	cmd.Env = env
+	cmd.Dir = k.repoRoot
 	out, err := executil.Run(cmd)
 	if err != nil {
 		return nil, nil, err
diff --git a/util/kustomize/kustomize_test.go b/util/kustomize/kustomize_test.go
index a6275cf01ae1b..0da0f2c4c1669 100644
--- a/util/kustomize/kustomize_test.go
+++ b/util/kustomize/kustomize_test.go
@@ -40,7 +40,7 @@ func TestKustomizeBuild(t *testing.T) {
 	namePrefix := "namePrefix-"
 	nameSuffix := "-nameSuffix"
 	namespace := "custom-namespace"
-	kustomize := NewKustomizeApp(appPath, git.NopCreds{}, "", "")
+	kustomize := NewKustomizeApp(appPath, appPath, git.NopCreds{}, "", "")
 	env := &v1alpha1.Env{
 		&v1alpha1.EnvEntry{Name: "ARGOCD_APP_NAME", Value: "argo-cd-tests"},
 	}
@@ -123,7 +123,7 @@ func TestKustomizeBuild(t *testing.T) {
 func TestFailKustomizeBuild(t *testing.T) {
 	appPath, err := testDataDir(t, kustomization1)
 	assert.Nil(t, err)
-	kustomize := NewKustomizeApp(appPath, git.NopCreds{}, "", "")
+	kustomize := NewKustomizeApp(appPath, appPath, git.NopCreds{}, "", "")
 	kustomizeSource := v1alpha1.ApplicationSourceKustomize{
 		Replicas: []v1alpha1.KustomizeReplica{
 			{
@@ -222,7 +222,7 @@ func TestKustomizeBuildForceCommonLabels(t *testing.T) {
 	for _, tc := range testCases {
 		appPath, err := testDataDir(t, tc.TestData)
 		assert.Nil(t, err)
-		kustomize := NewKustomizeApp(appPath, git.NopCreds{}, "", "")
+		kustomize := NewKustomizeApp(appPath, appPath, git.NopCreds{}, "", "")
 		objs, _, err := kustomize.Build(&tc.KustomizeSource, nil, tc.Env)
 		switch tc.ExpectErr {
 		case true:
@@ -314,7 +314,7 @@ func TestKustomizeBuildForceCommonAnnotations(t *testing.T) {
 	for _, tc := range testCases {
 		appPath, err := testDataDir(t, tc.TestData)
 		assert.Nil(t, err)
-		kustomize := NewKustomizeApp(appPath, git.NopCreds{}, "", "")
+		kustomize := NewKustomizeApp(appPath, appPath, git.NopCreds{}, "", "")
 		objs, _, err := kustomize.Build(&tc.KustomizeSource, nil, tc.Env)
 		switch tc.ExpectErr {
 		case true:
@@ -334,7 +334,7 @@ func TestKustomizeCustomVersion(t *testing.T) {
 	kustomizePath, err := testDataDir(t, kustomization4)
 	assert.Nil(t, err)
 	envOutputFile := kustomizePath + "/env_output"
-	kustomize := NewKustomizeApp(appPath, git.NopCreds{}, "", kustomizePath+"/kustomize.special")
+	kustomize := NewKustomizeApp(appPath, appPath, git.NopCreds{}, "", kustomizePath+"/kustomize.special")
 	kustomizeSource := v1alpha1.ApplicationSourceKustomize{
 		Version: "special",
 	}
@@ -377,7 +377,7 @@ func TestKustomizeBuildComponents(t *testing.T) {
 func TestKustomizeBuildPatches(t *testing.T) {
 	appPath, err := testDataDir(t, kustomization5)
 	assert.Nil(t, err)
-	kustomize := NewKustomizeApp(appPath, git.NopCreds{}, "", "")
+	kustomize := NewKustomizeApp(appPath, appPath, git.NopCreds{}, "", "")
 
 	kustomizeSource := v1alpha1.ApplicationSourceKustomize{
 		Patches: []v1alpha1.KustomizePatch{