diff --git a/bundle/config/mutator/python/python_locations.go b/bundle/config/mutator/python/python_locations.go
index 2fa86bea0..9cb65c302 100644
--- a/bundle/config/mutator/python/python_locations.go
+++ b/bundle/config/mutator/python/python_locations.go
@@ -4,6 +4,7 @@ import (
 	"encoding/json"
 	"fmt"
 	"io"
+	pathlib "path"
 	"path/filepath"
 
 	"github.com/databricks/cli/libs/dyn"
@@ -99,7 +100,7 @@ func removeVirtualLocations(locations []dyn.Location) []dyn.Location {
 // parsePythonLocations parses locations.json from the Python mutator.
 //
 // locations file is newline-separated JSON objects with pythonLocationEntry structure.
-func parsePythonLocations(input io.Reader) (*pythonLocations, error) {
+func parsePythonLocations(bundleRoot string, input io.Reader) (*pythonLocations, error) {
 	decoder := json.NewDecoder(input)
 	locations := newPythonLocations()
 
@@ -116,6 +117,12 @@ func parsePythonLocations(input io.Reader) (*pythonLocations, error) {
 			return nil, fmt.Errorf("failed to parse python location: %s", err)
 		}
 
+		// Output can contain both relative paths and absolute paths outside of bundle root.
+		// Mutator pipeline expects all path to be absolute at this point, so make all paths absolute.
+		if !pathlib.IsAbs(entry.File) {
+			entry.File = filepath.Join(bundleRoot, entry.File)
+		}
+
 		location := dyn.Location{
 			File:   entry.File,
 			Line:   entry.Line,
diff --git a/bundle/config/mutator/python/python_locations_test.go b/bundle/config/mutator/python/python_locations_test.go
index 32afcc92b..2860af820 100644
--- a/bundle/config/mutator/python/python_locations_test.go
+++ b/bundle/config/mutator/python/python_locations_test.go
@@ -165,12 +165,28 @@ func TestLoadOutput(t *testing.T) {
 	require.Equal(t, filepath.Join(bundleRoot, generatedFileName), notebookPath.Locations()[0].File)
 }
 
-func TestParsePythonLocations(t *testing.T) {
-	expected := dyn.Location{File: "foo.py", Line: 1, Column: 2}
+func TestParsePythonLocations_absolutePath(t *testing.T) {
+	// output can contain absolute path that is outside of the bundle root
+	expected := dyn.Location{File: "/Shared/foo.py", Line: 1, Column: 2}
 
-	input := `{"path": "foo", "file": "foo.py", "line": 1, "column": 2}`
+	input := `{"path": "foo", "file": "/Shared/foo.py", "line": 1, "column": 2}`
 	reader := bytes.NewReader([]byte(input))
-	locations, err := parsePythonLocations(reader)
+	locations, err := parsePythonLocations("/tmp/", reader)
+
+	assert.NoError(t, err)
+
+	assert.True(t, locations.keys["foo"].exists)
+	assert.Equal(t, expected, locations.keys["foo"].location)
+}
+
+func TestParsePythonLocations_relativePath(t *testing.T) {
+	// output can contain relative paths, we expect all locations to be absolute
+	// at this stage of mutator pipeline
+	expected := dyn.Location{File: filepath.Clean("/tmp/my_project/foo.py"), Line: 1, Column: 2}
+
+	input := `{"path": "foo", "file": "foo.py", "line": 1, "column": 2}`
+	reader := bytes.NewReader([]byte(input))
+	locations, err := parsePythonLocations(filepath.Clean("/tmp/my_project"), reader)
 
 	assert.NoError(t, err)
 
diff --git a/bundle/config/mutator/python/python_mutator.go b/bundle/config/mutator/python/python_mutator.go
index cd2e286e5..f75f111cf 100644
--- a/bundle/config/mutator/python/python_mutator.go
+++ b/bundle/config/mutator/python/python_mutator.go
@@ -331,7 +331,7 @@ func (m *pythonMutator) runPythonMutator(ctx context.Context, root dyn.Value, op
 		return dyn.InvalidValue, diag.Errorf("failed to load diagnostics: %s", pythonDiagnosticsErr)
 	}
 
-	locations, err := loadLocationsFile(locationsPath)
+	locations, err := loadLocationsFile(opts.bundleRootPath, locationsPath)
 	if err != nil {
 		return dyn.InvalidValue, diag.Errorf("failed to load locations: %s", err)
 	}
@@ -381,7 +381,7 @@ func writeInputFile(inputPath string, input dyn.Value) error {
 }
 
 // loadLocationsFile loads locations.json containing source locations for generated YAML.
-func loadLocationsFile(locationsPath string) (*pythonLocations, error) {
+func loadLocationsFile(bundleRoot, locationsPath string) (*pythonLocations, error) {
 	locationsFile, err := os.Open(locationsPath)
 	if errors.Is(err, fs.ErrNotExist) {
 		return newPythonLocations(), nil
@@ -391,7 +391,7 @@ func loadLocationsFile(locationsPath string) (*pythonLocations, error) {
 
 	defer locationsFile.Close()
 
-	return parsePythonLocations(locationsFile)
+	return parsePythonLocations(bundleRoot, locationsFile)
 }
 
 func loadOutputFile(rootPath, outputPath string, locations *pythonLocations) (dyn.Value, diag.Diagnostics) {
diff --git a/bundle/config/mutator/python/python_mutator_test.go b/bundle/config/mutator/python/python_mutator_test.go
index 322fb79e8..9d957e797 100644
--- a/bundle/config/mutator/python/python_mutator_test.go
+++ b/bundle/config/mutator/python/python_mutator_test.go
@@ -54,6 +54,8 @@ func TestPythonMutator_Name_applyMutators(t *testing.T) {
 func TestPythonMutator_loadResources(t *testing.T) {
 	withFakeVEnv(t, ".venv")
 
+	rootPath := filepath.Join(t.TempDir(), "my_project")
+
 	b := loadYaml("databricks.yml", `
       experimental:
         python:
@@ -64,6 +66,9 @@ func TestPythonMutator_loadResources(t *testing.T) {
           job0:
             name: job_0`)
 
+	// set rootPath so that we can make absolute paths in dyn.Location
+	b.BundleRootPath = rootPath
+
 	ctx := withProcessStub(
 		t,
 		[]string{
@@ -120,7 +125,7 @@ func TestPythonMutator_loadResources(t *testing.T) {
 
 		assert.Equal(t, []dyn.Location{
 			{
-				File:   "src/examples/job1.py",
+				File:   filepath.Join(rootPath, "src/examples/job1.py"),
 				Line:   5,
 				Column: 7,
 			},