diff --git a/experimental/python/databricks/bundles/build.py b/experimental/python/databricks/bundles/build.py
index 86c9d1f7c7..b058e4510b 100644
--- a/experimental/python/databricks/bundles/build.py
+++ b/experimental/python/databricks/bundles/build.py
@@ -528,11 +528,23 @@ def _relativize_location(location: Location) -> Location:
 
 
 def _relativize_path(path: str) -> str:
+    """
+    Attempt to relativize an absolute path to the current working directory.
+
+    If the path is not absolute or cannot be relativized, return it as is.
+    Used to relativize paths in locations to show shorter paths in diagnostics.
+    """
+
     if not os.path.isabs(path):
         return path
 
     cwd = os.getcwd()
-    common = os.path.commonpath([os.getcwd(), path])
+
+    try:
+        common = os.path.commonpath([cwd, path])
+    except ValueError:
+        # On Windows, paths on different drives don't have a common path
+        return path
 
     if common == cwd:
         return os.path.relpath(path, cwd)
diff --git a/experimental/python/databricks_tests/test_build.py b/experimental/python/databricks_tests/test_build.py
index 6906adbcac..65d9683e92 100644
--- a/experimental/python/databricks_tests/test_build.py
+++ b/experimental/python/databricks_tests/test_build.py
@@ -15,6 +15,7 @@
     _parse_bundle_info,
     _read_conf,
     _relativize_location,
+    _relativize_path,
     _write_diagnostics,
     _write_locations,
     _write_output,
@@ -117,6 +118,25 @@ def test_relativize_location():
     assert _relativize_location(location) == Location(file="bar.py", line=42, column=1)
 
 
+def test_relativize_path_relative():
+    assert _relativize_path("bar.py") == "bar.py"
+
+
+def test_relativize_path_absolute_in_cwd():
+    file = Path("bar.py").absolute().as_posix()
+    assert _relativize_path(file) == "bar.py"
+
+
+def test_relativize_path_absolute_outside_cwd():
+    assert _relativize_path("/some/other/path/bar.py") == "/some/other/path/bar.py"
+
+
+def test_relativize_path_different_drive():
+    # On Windows, paths on different drives should return the absolute path
+    # On Unix, this test will still pass as it will be treated as outside cwd
+    assert _relativize_path("C:\\other\\path\\bar.py") == "C:\\other\\path\\bar.py"
+
+
 def test_load_object_common_error():
     obj, diagnostics = _load_object("resources:load_resources")
     [item] = diagnostics.items