diff --git a/lib/dereference.ts b/lib/dereference.ts
index f07216ad..b97f12b5 100644
--- a/lib/dereference.ts
+++ b/lib/dereference.ts
@@ -169,7 +169,9 @@ function dereference$Ref(
 ) {
   // console.log('Dereferencing $ref pointer "%s" at %s', $ref.$ref, path);
 
-  const $refPath = url.resolve(path, $ref.$ref);
+  const isExternalRef = $Ref.isExternal$Ref($ref);
+  const shouldResolveOnCwd = isExternalRef && options?.dereference.externalReferenceResolution === "root";
+  const $refPath = url.resolve(shouldResolveOnCwd ? url.cwd() : path, $ref.$ref);
 
   const cache = dereferencedCache.get($refPath);
   if (cache) {
diff --git a/lib/index.ts b/lib/index.ts
index ae770b1d..bc0b0905 100644
--- a/lib/index.ts
+++ b/lib/index.ts
@@ -100,6 +100,13 @@ export class $RefParser {
     if (url.isFileSystemPath(args.path)) {
       args.path = url.fromFileSystemPath(args.path);
       pathType = "file";
+    } else if (!args.path && args.schema && args.schema.$id) {
+      // when schema id has defined an URL should use that hostname to request the references,
+      // instead of using the current page URL
+      const params = url.parse(args.schema.$id);
+      const port = params.protocol === "https:" ? 443 : 80;
+
+      args.path = `${params.protocol}//${params.hostname}:${port}`;
     }
 
     // Resolve the absolute path of the schema
diff --git a/lib/options.ts b/lib/options.ts
index 62afe6bf..54feb74a 100644
--- a/lib/options.ts
+++ b/lib/options.ts
@@ -83,6 +83,13 @@ interface $RefParserOptions {
      * @argument {JSONSchemaObject} object The JSON-Schema that the `$ref` resolved to.
      */
     onDereference?(path: string, value: JSONSchemaObject): void;
+
+    /**
+     * Whether a reference should resolve relative to its directory/path, or from the cwd
+     *
+     * Default: `relative`
+     */
+    externalReferenceResolution?: "relative" | "root";
   };
 }
 
@@ -149,8 +156,9 @@ const getDefaults = () => {
        * @type {function}
        */
       excludedPathMatcher: () => false,
+      referenceResolution: "relative",
     },
-  };
+  } as $RefParserOptions;
   return cloneDeep(defaults);
 };
 
diff --git a/lib/refs.ts b/lib/refs.ts
index 3724b667..acc48d6f 100644
--- a/lib/refs.ts
+++ b/lib/refs.ts
@@ -95,7 +95,7 @@ export default class $Refs {
    * @param value The value to assign. Can be anything (object, string, number, etc.)
    */
   set(path: any, value: JSONSchema4Type | JSONSchema6Type | JSONSchema7Type) {
-    const absPath = url.resolve(this._root$Ref.path, path);
+    const absPath = url.resolve(this._root$Ref.path!, path);
     const withoutHash = url.stripHash(absPath);
     const $ref = this._$refs[withoutHash];
 
@@ -113,7 +113,7 @@ export default class $Refs {
    * @protected
    */
   _get$Ref(path: any) {
-    path = url.resolve(this._root$Ref.path, path);
+    path = url.resolve(this._root$Ref.path!, path);
     const withoutHash = url.stripHash(path);
     return this._$refs[withoutHash];
   }
@@ -145,7 +145,7 @@ export default class $Refs {
    * @protected
    */
   _resolve(path: string, pathFromRoot: string, options?: any) {
-    const absPath = url.resolve(this._root$Ref.path, path);
+    const absPath = url.resolve(this._root$Ref.path!, path);
     const withoutHash = url.stripHash(absPath);
     const $ref = this._$refs[withoutHash];
 
diff --git a/lib/resolve-external.ts b/lib/resolve-external.ts
index 2bca6191..775abe71 100644
--- a/lib/resolve-external.ts
+++ b/lib/resolve-external.ts
@@ -92,9 +92,8 @@ function crawl(
  * including nested references that are contained in externally-referenced files.
  */
 async function resolve$Ref($ref: JSONSchema, path: string, $refs: $Refs, options: Options) {
-  // console.log('Resolving $ref pointer "%s" at %s', $ref.$ref, path);
-
-  const resolvedPath = url.resolve(path, $ref.$ref);
+  const shouldResolveOnCwd = options.dereference.externalReferenceResolution === "root";
+  const resolvedPath = url.resolve(shouldResolveOnCwd ? url.cwd() : path, $ref.$ref!);
   const withoutHash = url.stripHash(resolvedPath);
 
   // $ref.$ref = url.relative($refs._root$Ref.path, resolvedPath);
diff --git a/lib/util/url.ts b/lib/util/url.ts
index 183aca44..c4df151a 100644
--- a/lib/util/url.ts
+++ b/lib/util/url.ts
@@ -16,15 +16,16 @@ const urlEncodePatterns = [/\?/g, "%3F", /#/g, "%23"];
 // RegExp patterns to URL-decode special characters for local filesystem paths
 const urlDecodePatterns = [/%23/g, "#", /%24/g, "$", /%26/g, "&", /%2C/g, ",", /%40/g, "@"];
 
-export const parse = (u: any) => new URL(u);
+export const parse = (u: string | URL) => new URL(u);
 
 /**
  * Returns resolved target URL relative to a base URL in a manner similar to that of a Web browser resolving an anchor tag HREF.
  *
  * @returns
  */
-export function resolve(from: any, to: any) {
-  const resolvedUrl = new URL(to, new URL(from, "resolve://"));
+export function resolve(from: string, to: string) {
+  const fromUrl = new URL(convertPathToPosix(from), "resolve://");
+  const resolvedUrl = new URL(convertPathToPosix(to), fromUrl);
   if (resolvedUrl.protocol === "resolve:") {
     // `from` is a relative URL.
     const { pathname, search, hash } = resolvedUrl;
@@ -279,7 +280,7 @@ export function safePointerToPath(pointer: any) {
     });
 }
 
-export function relative(from: string | undefined, to: string | undefined) {
+export function relative(from: string, to: string) {
   if (!isFileSystemPath(from) || !isFileSystemPath(to)) {
     return resolve(from, to);
   }
diff --git a/test/specs/callbacks.spec.ts b/test/specs/callbacks.spec.ts
index 571d83d2..d61f491c 100644
--- a/test/specs/callbacks.spec.ts
+++ b/test/specs/callbacks.spec.ts
@@ -73,7 +73,7 @@ describe("Callback & Promise syntax", () => {
     return async function () {
       try {
         await $RefParser[method](path.rel("test/specs/invalid/invalid.yaml"));
-        helper.shouldNotGetCalled;
+        helper.shouldNotGetCalled();
       } catch (err: any) {
         expect(err).to.be.an.instanceOf(ParserError);
       }
diff --git a/test/specs/http.spec.ts b/test/specs/http.spec.ts
index e3d3fcb3..902c345f 100644
--- a/test/specs/http.spec.ts
+++ b/test/specs/http.spec.ts
@@ -1,3 +1,4 @@
+/// <reference lib="dom" />
 import { describe, it, beforeEach } from "vitest";
 import $RefParser from "../../lib/index.js";
 
diff --git a/test/specs/relative-path/root.spec.ts b/test/specs/relative-path/root.spec.ts
new file mode 100644
index 00000000..2088b382
--- /dev/null
+++ b/test/specs/relative-path/root.spec.ts
@@ -0,0 +1,66 @@
+import { afterAll, beforeAll, describe, it } from "vitest";
+import $RefParser, { JSONParserError } from "../../../lib/index.js";
+import path from "../../utils/path.js";
+
+import { expect, vi } from "vitest";
+import helper from "../../utils/helper";
+
+describe.skipIf(process.env.BROWSER)("Schemas with imports in relative and absolute locations work", () => {
+  describe("Schemas with relative imports that should be resolved from the root", () => {
+    beforeAll(() => {
+      vi.spyOn(process, "cwd").mockImplementation(() => {
+        return __dirname;
+      });
+    });
+    afterAll(() => {
+      vi.restoreAllMocks();
+    });
+    it("should not parse successfully when set to resolve relative (default)", async () => {
+      const parser = new $RefParser();
+      try {
+        await parser.dereference(path.rel("schemas/accountList.json"));
+        helper.shouldNotGetCalled();
+      } catch (err) {
+        expect(err).to.be.an.instanceOf(JSONParserError);
+      }
+    });
+
+    it("should parse successfully when set to resolve relative (default)", async () => {
+      const parser = new $RefParser();
+      const schema = await parser.dereference(path.rel("schemas/accountList.json"), {
+        dereference: { externalReferenceResolution: "root" },
+      });
+      expect(schema).to.eql(parser.schema);
+    });
+  });
+
+  describe("Schemas with relative imports that should be resolved relatively", () => {
+    beforeAll(() => {
+      vi.spyOn(process, "cwd").mockImplementation(() => {
+        return __dirname;
+      });
+    });
+    afterAll(() => {
+      vi.restoreAllMocks();
+    });
+    it("should parse successfully when set to resolve relative (default)", async () => {
+      const parser = new $RefParser();
+      const schema = await parser.dereference(path.rel("schemas-relative/accountList.json"), {
+        dereference: { externalReferenceResolution: "relative" },
+      });
+      expect(schema).to.eql(parser.schema);
+    });
+
+    it("should not parse successfully when set to resolve relative (default)", async () => {
+      const parser = new $RefParser();
+      try {
+        await parser.dereference(path.rel("schemas-relative/accountList.json"), {
+          dereference: { externalReferenceResolution: "root" },
+        });
+        helper.shouldNotGetCalled();
+      } catch (err) {
+        expect(err).to.be.an.instanceOf(JSONParserError);
+      }
+    });
+  });
+});
diff --git a/test/specs/relative-path/schemas-relative/account.json b/test/specs/relative-path/schemas-relative/account.json
new file mode 100644
index 00000000..82c95f42
--- /dev/null
+++ b/test/specs/relative-path/schemas-relative/account.json
@@ -0,0 +1,26 @@
+{
+  "$schema": "http://json-schema.org/draft-07/schema",
+  "title": "Account",
+  "$id": "account.json",
+  "type": "object",
+  "description": "An account.",
+  "additionalProperties": false,
+  "required": [
+    "accountOwner",
+    "accountId"
+  ],
+  "properties": {
+    "accountOwner": {
+      "$ref": "user.json"
+    },
+    "accountId": {
+      "$id": "#/properties/accountId",
+      "type": "string",
+      "description": "An explanation about the purpose of this instance.",
+      "default": "",
+      "examples": [
+        "186383568343"
+      ]
+    }
+  }
+}
diff --git a/test/specs/relative-path/schemas-relative/accountList.json b/test/specs/relative-path/schemas-relative/accountList.json
new file mode 100644
index 00000000..927850ef
--- /dev/null
+++ b/test/specs/relative-path/schemas-relative/accountList.json
@@ -0,0 +1,30 @@
+{
+  "$schema": "http://json-schema.org/draft-07/schema",
+  "title": "AccountList",
+  "$id": "accountList.json",
+  "type": "object",
+  "description": "An account list result.",
+  "additionalProperties": false,
+  "required": [
+    "data",
+    "total",
+    "pages"
+  ],
+  "properties": {
+    "data": {
+      "type": "array",
+      "default": [],
+      "items": {
+        "$ref": "account.json"
+      }
+    },
+    "total": {
+      "type": "integer",
+      "description": "The number of total items found."
+    },
+    "pages": {
+      "type": "integer",
+      "description": "The number of pages found"
+    }
+  }
+}
diff --git a/test/specs/relative-path/schemas-relative/user.json b/test/specs/relative-path/schemas-relative/user.json
new file mode 100644
index 00000000..2f32b425
--- /dev/null
+++ b/test/specs/relative-path/schemas-relative/user.json
@@ -0,0 +1,34 @@
+{
+  "$schema": "http://json-schema.org/draft-07/schema",
+  "$id": "user.json",
+  "type": "object",
+  "title": "User",
+  "description": "A User",
+  "default": {},
+  "additionalProperties": false,
+  "required": [
+    "id",
+    "name",
+    "email"
+  ],
+  "properties": {
+    "id": {
+      "$id": "#/user/properties/id",
+      "type": "string",
+      "description": "The users id.",
+      "default": ""
+    },
+    "name": {
+      "$id": "#/user/properties/name",
+      "type": "string",
+      "description": "The users full name with id.",
+      "default": ""
+    },
+    "email": {
+      "$id": "#/user/properties/email",
+      "type": "string",
+      "description": "The users email address.",
+      "default": ""
+    }
+  }
+}
diff --git a/test/specs/relative-path/schemas/account.json b/test/specs/relative-path/schemas/account.json
new file mode 100644
index 00000000..f0d5e5c1
--- /dev/null
+++ b/test/specs/relative-path/schemas/account.json
@@ -0,0 +1,25 @@
+{
+  "$schema": "http://json-schema.org/draft-07/schema",
+  "title": "Account",
+  "type": "object",
+  "description": "An account.",
+  "additionalProperties": false,
+  "required": [
+    "accountOwner",
+    "accountId"
+  ],
+  "properties": {
+    "accountOwner": {
+      "$ref": "schemas/user.json"
+    },
+    "accountId": {
+      "$id": "#/properties/accountId",
+      "type": "string",
+      "description": "An explanation about the purpose of this instance.",
+      "default": "",
+      "examples": [
+        "186383568343"
+      ]
+    }
+  }
+}
diff --git a/test/specs/relative-path/schemas/accountList.json b/test/specs/relative-path/schemas/accountList.json
new file mode 100644
index 00000000..2933ba2e
--- /dev/null
+++ b/test/specs/relative-path/schemas/accountList.json
@@ -0,0 +1,29 @@
+{
+  "$schema": "http://json-schema.org/draft-07/schema",
+  "title": "AccountList",
+  "type": "object",
+  "description": "An account list result.",
+  "additionalProperties": false,
+  "required": [
+    "data",
+    "total",
+    "pages"
+  ],
+  "properties": {
+    "data": {
+      "type": "array",
+      "default": [],
+      "items": {
+        "$ref": "schemas/account.json"
+      }
+    },
+    "total": {
+      "type": "integer",
+      "description": "The number of total items found."
+    },
+    "pages": {
+      "type": "integer",
+      "description": "The number of pages found"
+    }
+  }
+}
diff --git a/test/specs/relative-path/schemas/user.json b/test/specs/relative-path/schemas/user.json
new file mode 100644
index 00000000..d59b69f5
--- /dev/null
+++ b/test/specs/relative-path/schemas/user.json
@@ -0,0 +1,33 @@
+{
+  "$schema": "http://json-schema.org/draft-07/schema",
+  "type": "object",
+  "title": "User",
+  "description": "A User",
+  "default": {},
+  "additionalProperties": false,
+  "required": [
+    "id",
+    "name",
+    "email"
+  ],
+  "properties": {
+    "id": {
+      "$id": "#/user/properties/id",
+      "type": "string",
+      "description": "The users id.",
+      "default": ""
+    },
+    "name": {
+      "$id": "#/user/properties/name",
+      "type": "string",
+      "description": "The users full name with id.",
+      "default": ""
+    },
+    "email": {
+      "$id": "#/user/properties/email",
+      "type": "string",
+      "description": "The users email address.",
+      "default": ""
+    }
+  }
+}