diff --git a/src/dragonglass/mparse.py b/src/dragonglass/mparse.py
index 5479f55..d96fb4e 100644
--- a/src/dragonglass/mparse.py
+++ b/src/dragonglass/mparse.py
@@ -254,7 +254,7 @@ class ObsidianImages(Extension):
             str: The image's link target value, or ``None`` if the image was not found.
         """
         assert self._context.src_index is not None
-        node, _ = self._context.src_index.lookup(name)
+        node, _ = self._context.src_index.lookup(self._context.current_node, name)
         if node:
             return node.link_target(self._context.url_prefix,
                                     self._context.current_node if self._context.relative_links else None)
@@ -425,7 +425,7 @@ class ObsidianLinks(Extension):
             contents = t[0]
 
         assert self._context.src_index is not None
-        node, _ = self._context.src_index.lookup(contents)
+        node, _ = self._context.src_index.lookup(self._context.current_node, contents)
         if not text:
             text = contents
         if node:
diff --git a/src/dragonglass/tree.py b/src/dragonglass/tree.py
index 35f9bad..ec48081 100644
--- a/src/dragonglass/tree.py
+++ b/src/dragonglass/tree.py
@@ -216,11 +216,13 @@ class SourceIndex:
         Args:
             nodelist (list[SourceNode]): The list of nodes to be indexed.
         """
+        self._bypath: dict[str, SourceNode] = {}
         self._byname: dict[str, SourceNode] = {}
         self._byalias: dict[str, SourceNode] = {}
         for node in nodelist:
             if node.is_dir:
                 continue
+            self._bypath[node.path.as_posix()] = node
             if node.is_md:
                 tmp = node.path.with_suffix('')
                 key = tmp.name
@@ -238,11 +240,12 @@ class SourceIndex:
                     self._byname[key] = node
                 self._byname[node.path.as_posix()] = node
 
-    def lookup(self, reference: str) -> tuple[SourceNode | None, str | None]:
+    def lookup(self, from_node: SourceNode, reference: str) -> tuple[SourceNode | None, str | None]:
         """
         Looks up a reference in the index and returns the corresponding node if it exists.
 
         Args:
+            from_node (SourceNode): The "current" node; used to look up a node by relative path.
             reference (str): The reference to look up.
 
         Returns:
@@ -254,4 +257,8 @@ class SourceIndex:
         elif reference in self._byalias:
             return self._byalias[reference], 'ALIAS'
         else:
+            new_path = from_node.path.parent / reference
+            s = new_path.as_posix()
+            if s in self._bypath:
+                return self._bypath[s], 'PATH'
             return None, None