diff --git a/gazelle/bzl/BUILD b/gazelle/bzl/BUILD
index fea1d51..29caeb0 100644
--- a/gazelle/bzl/BUILD
+++ b/gazelle/bzl/BUILD
@@ -49,5 +49,5 @@ gazelle_binary(
 
 gazelle(
     name = "gazelle",
-    gazelle = "//gazelle:gazelle-skylib",
+    gazelle = ":gazelle-skylib",
 )
diff --git a/gazelle/bzl/gazelle.go b/gazelle/bzl/gazelle.go
index f948390..a0b8aa6 100644
--- a/gazelle/bzl/gazelle.go
+++ b/gazelle/bzl/gazelle.go
@@ -152,23 +152,34 @@ func (*bzlLibraryLang) Resolve(c *config.Config, ix *resolve.RuleIndex, rc *repo
 
 	deps := make([]string, 0, len(imports))
 	for _, imp := range imports {
-		if strings.HasPrefix(imp, "@") || !c.IndexLibraries {
+		impLabel, err := label.Parse(imp)
+		if err != nil {
+			log.Printf("%s: import of %q is invalid: %v", from.String(), imp, err)
+			continue
+		}
+
+		// the index only contains absolute labels, not relative
+		impLabel = impLabel.Abs(from.Repo, from.Pkg)
+
+		if impLabel.Repo != "" || !c.IndexLibraries {
 			// This is a dependency that is external to the current repo, or indexing
 			// is disabled so take a guess at what hte target name should be.
 			deps = append(deps, strings.TrimSuffix(imp, fileType))
 		} else {
 			res := resolve.ImportSpec{
 				Lang: languageName,
-				Imp:  imp,
+				Imp:  impLabel.String(),
 			}
 			matches := ix.FindRulesByImport(res, languageName)
 
 			if len(matches) == 0 {
-				log.Printf("%s: %q was not found in dependency index. Skipping. This may result in an incomplete deps section and require manual BUILD file intervention.\n", from.String(), imp)
+				log.Printf("%s: %q (%s) was not found in dependency index. Skipping. This may result in an incomplete deps section and require manual BUILD file intervention.\n", from.String(), imp, impLabel.String())
 			}
 
 			for _, m := range matches {
-				deps = append(deps, m.Label.String())
+				depLabel := m.Label
+				depLabel = depLabel.Rel(from.Repo, from.Pkg)
+				deps = append(deps, depLabel.String())
 			}
 		}
 	}
diff --git a/gazelle/bzl/testdata/import/BUILD.out b/gazelle/bzl/testdata/import/BUILD.out
index a19a11a..2d39feb 100644
--- a/gazelle/bzl/testdata/import/BUILD.out
+++ b/gazelle/bzl/testdata/import/BUILD.out
@@ -10,5 +10,5 @@ bzl_library(
     name = "foo",
     srcs = ["foo.bzl"],
     visibility = ["//visibility:public"],
-    deps = ["//:bar"],
+    deps = [":bar"],
 )
diff --git a/gazelle/bzl/testdata/relative_import/BUILD.in b/gazelle/bzl/testdata/relative_import/BUILD.in
new file mode 100644
index 0000000..e69de29
diff --git a/gazelle/bzl/testdata/relative_import/BUILD.out b/gazelle/bzl/testdata/relative_import/BUILD.out
new file mode 100644
index 0000000..2d39feb
--- /dev/null
+++ b/gazelle/bzl/testdata/relative_import/BUILD.out
@@ -0,0 +1,14 @@
+load("@bazel_skylib//:bzl_library.bzl", "bzl_library")
+
+bzl_library(
+    name = "bar",
+    srcs = ["bar.bzl"],
+    visibility = ["//visibility:public"],
+)
+
+bzl_library(
+    name = "foo",
+    srcs = ["foo.bzl"],
+    visibility = ["//visibility:public"],
+    deps = [":bar"],
+)
diff --git a/gazelle/bzl/testdata/relative_import/WORKSPACE b/gazelle/bzl/testdata/relative_import/WORKSPACE
new file mode 100644
index 0000000..e69de29
diff --git a/gazelle/bzl/testdata/relative_import/bar.bzl b/gazelle/bzl/testdata/relative_import/bar.bzl
new file mode 100644
index 0000000..7ffea51
--- /dev/null
+++ b/gazelle/bzl/testdata/relative_import/bar.bzl
@@ -0,0 +1,6 @@
+"""
+Doc string
+"""
+
+def func():
+    pass
diff --git a/gazelle/bzl/testdata/relative_import/foo.bzl b/gazelle/bzl/testdata/relative_import/foo.bzl
new file mode 100644
index 0000000..829cce3
--- /dev/null
+++ b/gazelle/bzl/testdata/relative_import/foo.bzl
@@ -0,0 +1,7 @@
+"""
+Doc string
+"""
+
+load(":bar.bzl", "func")
+
+func()
diff --git a/gazelle/bzl/testdata/relative_import/nested/dir/BUILD.in b/gazelle/bzl/testdata/relative_import/nested/dir/BUILD.in
new file mode 100644
index 0000000..e69de29
diff --git a/gazelle/bzl/testdata/relative_import/nested/dir/BUILD.out b/gazelle/bzl/testdata/relative_import/nested/dir/BUILD.out
new file mode 100644
index 0000000..2d39feb
--- /dev/null
+++ b/gazelle/bzl/testdata/relative_import/nested/dir/BUILD.out
@@ -0,0 +1,14 @@
+load("@bazel_skylib//:bzl_library.bzl", "bzl_library")
+
+bzl_library(
+    name = "bar",
+    srcs = ["bar.bzl"],
+    visibility = ["//visibility:public"],
+)
+
+bzl_library(
+    name = "foo",
+    srcs = ["foo.bzl"],
+    visibility = ["//visibility:public"],
+    deps = [":bar"],
+)
diff --git a/gazelle/bzl/testdata/relative_import/nested/dir/bar.bzl b/gazelle/bzl/testdata/relative_import/nested/dir/bar.bzl
new file mode 100644
index 0000000..7ffea51
--- /dev/null
+++ b/gazelle/bzl/testdata/relative_import/nested/dir/bar.bzl
@@ -0,0 +1,6 @@
+"""
+Doc string
+"""
+
+def func():
+    pass
diff --git a/gazelle/bzl/testdata/relative_import/nested/dir/foo.bzl b/gazelle/bzl/testdata/relative_import/nested/dir/foo.bzl
new file mode 100644
index 0000000..829cce3
--- /dev/null
+++ b/gazelle/bzl/testdata/relative_import/nested/dir/foo.bzl
@@ -0,0 +1,7 @@
+"""
+Doc string
+"""
+
+load(":bar.bzl", "func")
+
+func()
diff --git a/gazelle/bzl/testdata/workspace_name/BUILD.in b/gazelle/bzl/testdata/workspace_name/BUILD.in
new file mode 100644
index 0000000..e69de29
diff --git a/gazelle/bzl/testdata/workspace_name/BUILD.out b/gazelle/bzl/testdata/workspace_name/BUILD.out
new file mode 100644
index 0000000..2d39feb
--- /dev/null
+++ b/gazelle/bzl/testdata/workspace_name/BUILD.out
@@ -0,0 +1,14 @@
+load("@bazel_skylib//:bzl_library.bzl", "bzl_library")
+
+bzl_library(
+    name = "bar",
+    srcs = ["bar.bzl"],
+    visibility = ["//visibility:public"],
+)
+
+bzl_library(
+    name = "foo",
+    srcs = ["foo.bzl"],
+    visibility = ["//visibility:public"],
+    deps = [":bar"],
+)
diff --git a/gazelle/bzl/testdata/workspace_name/WORKSPACE b/gazelle/bzl/testdata/workspace_name/WORKSPACE
new file mode 100644
index 0000000..2fa2441
--- /dev/null
+++ b/gazelle/bzl/testdata/workspace_name/WORKSPACE
@@ -0,0 +1 @@
+workspace(name = "com_example")
diff --git a/gazelle/bzl/testdata/workspace_name/bar.bzl b/gazelle/bzl/testdata/workspace_name/bar.bzl
new file mode 100644
index 0000000..7ffea51
--- /dev/null
+++ b/gazelle/bzl/testdata/workspace_name/bar.bzl
@@ -0,0 +1,6 @@
+"""
+Doc string
+"""
+
+def func():
+    pass
diff --git a/gazelle/bzl/testdata/workspace_name/foo.bzl b/gazelle/bzl/testdata/workspace_name/foo.bzl
new file mode 100644
index 0000000..eb8d33c
--- /dev/null
+++ b/gazelle/bzl/testdata/workspace_name/foo.bzl
@@ -0,0 +1,7 @@
+"""
+Doc string
+"""
+
+load("//:bar.bzl", "func")
+
+func()