diff --git a/internal/tsoptions/commandlineparser.go b/internal/tsoptions/commandlineparser.go
index bc229a46536..1febf72fb97 100644
--- a/internal/tsoptions/commandlineparser.go
+++ b/internal/tsoptions/commandlineparser.go
@@ -33,6 +33,7 @@ type commandLineParser struct {
 	workerDiagnostics *ParseCommandLineWorkerDiagnostics
 	optionsMap        *NameMap
 	fs                vfs.FS
+	currentDirectory  string
 	options           *collections.OrderedMap[string, any]
 	fileNames         []string
 	errors            []*ast.Diagnostic
@@ -45,7 +46,7 @@ func ParseCommandLine(
 	if commandLine == nil {
 		commandLine = []string{}
 	}
-	parser := parseCommandLineWorker(CompilerOptionsDidYouMeanDiagnostics, commandLine, host.FS())
+	parser := parseCommandLineWorker(CompilerOptionsDidYouMeanDiagnostics, commandLine, host.FS(), host.GetCurrentDirectory())
 	optionsWithAbsolutePaths := convertToOptionsWithAbsolutePaths(parser.options.Clone(), CommandLineCompilerOptionsMap, host.GetCurrentDirectory())
 	compilerOptions := convertMapToOptions(optionsWithAbsolutePaths, &compilerOptionsParser{&core.CompilerOptions{}}).CompilerOptions
 	watchOptions := convertMapToOptions(optionsWithAbsolutePaths, &watchOptionsParser{&core.WatchOptions{}}).WatchOptions
@@ -66,7 +67,7 @@ func ParseBuildCommandLine(
 	if commandLine == nil {
 		commandLine = []string{}
 	}
-	parser := parseCommandLineWorker(buildOptionsDidYouMeanDiagnostics, commandLine, host.FS())
+	parser := parseCommandLineWorker(buildOptionsDidYouMeanDiagnostics, commandLine, host.FS(), host.GetCurrentDirectory())
 	compilerOptions := &core.CompilerOptions{}
 	for key, value := range parser.options.Entries() {
 		buildOption := BuildNameMap.Get(key)
@@ -114,9 +115,11 @@ func parseCommandLineWorker(
 	parseCommandLineWithDiagnostics *ParseCommandLineWorkerDiagnostics,
 	commandLine []string,
 	fs vfs.FS,
+	currentDirectory string,
 ) *commandLineParser {
 	parser := &commandLineParser{
 		fs:                fs,
+		currentDirectory:  currentDirectory,
 		workerDiagnostics: parseCommandLineWithDiagnostics,
 		fileNames:         []string{},
 		options:           &collections.OrderedMap[string, any]{},
@@ -163,6 +166,7 @@ func getInputOptionName(input string) string {
 }
 
 func (p *commandLineParser) parseResponseFile(fileName string) {
+	fileName = tspath.GetNormalizedAbsolutePath(fileName, p.currentDirectory)
 	fileContents, errors := tryReadFile(fileName, func(fileName string) (string, bool) {
 		if p.fs == nil {
 			return "", false
diff --git a/internal/tsoptions/commandlineparser_test.go b/internal/tsoptions/commandlineparser_test.go
index dad9977012e..474329931f8 100644
--- a/internal/tsoptions/commandlineparser_test.go
+++ b/internal/tsoptions/commandlineparser_test.go
@@ -87,6 +87,25 @@ func TestCommandLineParseResult(t *testing.T) {
 	}
 }
 
+func TestResponseFileDoesNotPanic(t *testing.T) {
+	t.Parallel()
+
+	// Passing `@` with an empty or relative filename should not panic.
+	// It should produce a diagnostic error instead.
+	cwd := t.TempDir()
+	t.Run("empty response file", func(t *testing.T) {
+		t.Parallel()
+		parsed := tsoptions.ParseCommandLineTestWorker(nil, []string{"@"}, osvfs.FS(), cwd)
+		assert.Assert(t, len(parsed.Errors) > 0, "expected an error for empty response file name")
+	})
+
+	t.Run("relative response file", func(t *testing.T) {
+		t.Parallel()
+		parsed := tsoptions.ParseCommandLineTestWorker(nil, []string{"@blah"}, osvfs.FS(), cwd)
+		assert.Assert(t, len(parsed.Errors) > 0, "expected an error for non-existent response file")
+	})
+}
+
 func TestParseCommandLineTypeRootsRelativePath(t *testing.T) {
 	t.Parallel()
 
@@ -233,7 +252,7 @@ func (f commandLineSubScenario) assertParseResult(t *testing.T) {
 		tsBaseline := parseExistingCompilerBaseline(t, originalBaseline)
 
 		// f.workerDiagnostic is either defined or set to default pointer in `createSubScenario`
-		parsed := tsoptions.ParseCommandLineTestWorker(f.optDecls, f.commandLine, osvfs.FS())
+		parsed := tsoptions.ParseCommandLineTestWorker(f.optDecls, f.commandLine, osvfs.FS(), t.TempDir())
 
 		newBaselineFileNames := strings.Join(parsed.FileNames, ",")
 		assert.Equal(t, tsBaseline.fileNames, newBaselineFileNames)
diff --git a/internal/tsoptions/export_test.go b/internal/tsoptions/export_test.go
index bc5d78e6c7e..cbf10d2e0de 100644
--- a/internal/tsoptions/export_test.go
+++ b/internal/tsoptions/export_test.go
@@ -17,9 +17,11 @@ func ParseCommandLineTestWorker(
 	decls []*CommandLineOption,
 	commandLine []string,
 	fs vfs.FS,
+	currentDirectory string,
 ) *TestCommandLineParser {
 	parser := &commandLineParser{
 		fs:                fs,
+		currentDirectory:  currentDirectory,
 		workerDiagnostics: CompilerOptionsDidYouMeanDiagnostics,
 		fileNames:         []string{},
 		options:           &collections.OrderedMap[string, any]{},