diff --git a/lib/modules/manager/gradle-wrapper/artifacts.spec.ts b/lib/modules/manager/gradle-wrapper/artifacts.spec.ts
index e05c33037d2bdd..2f9cee7a784f9a 100644
--- a/lib/modules/manager/gradle-wrapper/artifacts.spec.ts
+++ b/lib/modules/manager/gradle-wrapper/artifacts.spec.ts
@@ -275,4 +275,53 @@ describe('modules/manager/gradle-wrapper/artifacts', () => {
     ]);
     expect(execSnapshots).toBeEmptyArray();
   });
+
+  it('handles gradle-wrapper in subdirectory', async () => {
+    const execSnapshots = mockExecAll();
+    git.getRepoStatus.mockResolvedValue(
+      partial<StatusResult>({
+        modified: [
+          'sub/gradle/wrapper/gradle-wrapper.properties',
+          'sub/gradlew',
+          'sub/gradlew.bat',
+        ],
+      })
+    );
+
+    const res = await updateArtifacts({
+      packageFileName: 'sub/gradle/wrapper/gradle-wrapper.properties',
+      updatedDeps: [],
+      newPackageFileContent: Fixtures.get(
+        'expectedFiles/gradle/wrapper/gradle-wrapper.properties'
+      ),
+      config: { ...config, newValue: '6.3' },
+    });
+
+    expect(res).toEqual(
+      [
+        'sub/gradle/wrapper/gradle-wrapper.properties',
+        'sub/gradlew',
+        'sub/gradlew.bat',
+      ].map((fileProjectPath) => ({
+        file: {
+          type: 'addition',
+          path: fileProjectPath,
+          contents: 'test',
+        },
+      }))
+    );
+    expect(execSnapshots).toMatchObject([
+      {
+        cmd: './gradlew wrapper --gradle-distribution-url https://services.gradle.org/distributions/gradle-6.3-bin.zip',
+        options: {
+          cwd: '/tmp/github/some/repo/sub',
+          encoding: 'utf-8',
+          env: {
+            GRADLE_OPTS:
+              '-Dorg.gradle.parallel=true -Dorg.gradle.configureondemand=true -Dorg.gradle.daemon=false -Dorg.gradle.caching=false',
+          },
+        },
+      },
+    ]);
+  });
 });
diff --git a/lib/modules/manager/gradle-wrapper/artifacts.ts b/lib/modules/manager/gradle-wrapper/artifacts.ts
index 0fe7f16f9e6031..442531e996c093 100644
--- a/lib/modules/manager/gradle-wrapper/artifacts.ts
+++ b/lib/modules/manager/gradle-wrapper/artifacts.ts
@@ -1,5 +1,6 @@
 import is from '@sindresorhus/is';
 import { quote } from 'shlex';
+import { dirname, join } from 'upath';
 import { TEMPORARY_ERROR } from '../../../constants/error-messages';
 import { logger } from '../../../logger';
 import { exec } from '../../../util/exec';
@@ -10,7 +11,12 @@ import type { StatusResult } from '../../../util/git/types';
 import { Http } from '../../../util/http';
 import { newlineRegex } from '../../../util/regex';
 import type { UpdateArtifact, UpdateArtifactsResult } from '../types';
-import { extraEnv, getJavaConstraint, prepareGradleCommand } from './utils';
+import {
+  extraEnv,
+  getJavaConstraint,
+  gradleWrapperFileName,
+  prepareGradleCommand,
+} from './utils';
 
 const http = new Http('gradle-wrapper');
 
@@ -55,7 +61,10 @@ export async function updateArtifacts({
 }: UpdateArtifact): Promise<UpdateArtifactsResult[] | null> {
   try {
     logger.debug({ updatedDeps }, 'gradle-wrapper.updateArtifacts()');
-    let cmd = await prepareGradleCommand();
+    const localGradleDir = join(dirname(packageFileName), '../../');
+    const gradlewFile = join(localGradleDir, gradleWrapperFileName());
+
+    let cmd = await prepareGradleCommand(gradlewFile);
     if (!cmd) {
       logger.info('No gradlew found - skipping Artifacts update');
       return null;
@@ -81,6 +90,7 @@ export async function updateArtifacts({
     }
     logger.debug(`Updating gradle wrapper: "${cmd}"`);
     const execOptions: ExecOptions = {
+      cwdFile: gradlewFile,
       docker: {
         image: 'sidecar',
       },
diff --git a/lib/modules/manager/gradle-wrapper/util.spec.ts b/lib/modules/manager/gradle-wrapper/util.spec.ts
index 13fffb6b2c14e7..1feed75ae9a4c4 100644
--- a/lib/modules/manager/gradle-wrapper/util.spec.ts
+++ b/lib/modules/manager/gradle-wrapper/util.spec.ts
@@ -69,7 +69,7 @@ describe('modules/manager/gradle-wrapper/util', () => {
           mode: 0o550,
         })
       );
-      expect(await prepareGradleCommand()).toBe('./gradlew');
+      expect(await prepareGradleCommand('./gradlew')).toBe('./gradlew');
     });
 
     it('returns null', async () => {
@@ -78,7 +78,7 @@ describe('modules/manager/gradle-wrapper/util', () => {
           isFile: () => false,
         })
       );
-      expect(await prepareGradleCommand()).toBeNull();
+      expect(await prepareGradleCommand('./gradlew')).toBeNull();
     });
   });
 });
diff --git a/lib/modules/manager/gradle-wrapper/utils.ts b/lib/modules/manager/gradle-wrapper/utils.ts
index 14c6ffcc812b65..430b0d4a226d45 100644
--- a/lib/modules/manager/gradle-wrapper/utils.ts
+++ b/lib/modules/manager/gradle-wrapper/utils.ts
@@ -21,8 +21,9 @@ export function gradleWrapperFileName(): string {
   return './gradlew';
 }
 
-export async function prepareGradleCommand(): Promise<string | null> {
-  const gradlewFile = gradleWrapperFileName();
+export async function prepareGradleCommand(
+  gradlewFile: string
+): Promise<string | null> {
   const gradlewStat = await statLocalFile(gradlewFile);
   if (gradlewStat?.isFile() === true) {
     // if the file is not executable by others
@@ -30,7 +31,7 @@ export async function prepareGradleCommand(): Promise<string | null> {
       // add the execution permission to the owner, group and others
       await chmodLocalFile(gradlewFile, gradlewStat.mode | 0o111);
     }
-    return gradlewFile;
+    return gradleWrapperFileName();
   }
   /* eslint-enable no-bitwise */
   return null;