diff --git a/docs/source/IntermediateRepresentation.md b/docs/source/IntermediateRepresentation.md
index f5c302a7f..f4eb07539 100644
--- a/docs/source/IntermediateRepresentation.md
+++ b/docs/source/IntermediateRepresentation.md
@@ -13,6 +13,9 @@ There are some quirks:
   field of `Schema`. These mark the presence of new, backwards incompatible,
   schema features. Code generators must error if generating a schema with
   unrecognized advanced features.
+- Filenames are relative to a "project root" denoted by "//" in the path. This
+  may be specified in flatc with `--bfbs-filenames=$PROJECT_ROOT`, or it will be
+  inferred to be the directory containing the first provided schema file.
 
 
 ## Invocation 
diff --git a/src/flatc.cpp b/src/flatc.cpp
index 5bed461db..9afca6881 100644
--- a/src/flatc.cpp
+++ b/src/flatc.cpp
@@ -149,8 +149,11 @@ std::string FlatCompiler::GetUsageString(const char *program_name) const {
     "  --oneof-union          Translate .proto oneofs to flatbuffer unions.\n"
     "  --grpc                 Generate GRPC interfaces for the specified languages.\n"
     "  --schema               Serialize schemas instead of JSON (use with -b).\n"
-    "  --bfbs-filenames PATH  Adds declaration filenames, relative to PATH and prefixed with"
-    "                         `//`, to the binary schema.\n"
+    "  --bfbs-filenames PATH  Sets the root path where reflection filenames in \n"
+    "                         reflection.fbs are relative to. The 'root' is denoted with \n"
+    "                         `//`. E.g. if PATH=/a/b/c \n then /a/d/e.fbs will be serialized\n"
+    "                         as //../d/e.fbs. (PATH defaults to the directory of the first\n"
+    "                         provided schema file.)\n"
     "  --bfbs-comments        Add doc comments to the binary schema files.\n"
     "  --bfbs-builtins        Add builtin attributes to the binary schema files.\n"
     "  --bfbs-gen-embed       Generate code to embed the bfbs schema to the source.\n"
@@ -444,6 +447,9 @@ int FlatCompiler::Compile(int argc, const char **argv) {
         static_cast<size_t>(file_it - filenames.begin()) >= binary_files_from;
     auto ext = flatbuffers::GetExtension(filename);
     const bool is_schema = ext == "fbs" || ext == "proto";
+    if (is_schema && opts.project_root.empty()) {
+      opts.project_root = StripFileName(filename);
+    }
     const bool is_binary_schema = ext == reflection::SchemaExtension();
     if (is_binary) {
       parser->builder_.Clear();
diff --git a/src/util.cpp b/src/util.cpp
index 464c128b2..1a2b5f091 100644
--- a/src/util.cpp
+++ b/src/util.cpp
@@ -225,20 +225,29 @@ std::string RelativeToRootPath(const std::string &project,
   std::string absolute_project = PosixPath(AbsolutePath(project));
   if (absolute_project.back() != '/') absolute_project += "/";
   std::string absolute_filepath = PosixPath(AbsolutePath(filepath));
-  if (absolute_filepath.size() < absolute_project.size() ||
-      absolute_filepath.substr(0, absolute_project.size()) !=
-          absolute_project) {
-    printf(
-        "The --bfbs-filenames directory must contain all files and included "
-        "files.\n");
-    printf("project:          %s\n", project.c_str());
-    printf("filepath:         %s\n", filepath.c_str());
-    printf("absolute_project: %s\n", absolute_project.c_str());
-    printf("absolute_filepath:%s\n", absolute_filepath.c_str());
-    FLATBUFFERS_ASSERT(0);
+
+  // Find the first character where they disagree.
+  // The previous directory is the lowest common ancestor;
+  const char *a = absolute_project.c_str();
+  const char *b = absolute_filepath.c_str();
+  size_t common_prefix_len = 0;
+  while (*a != '\0' && *b != '\0' && *a == *b) {
+    if (*a == '/') common_prefix_len = a - absolute_project.c_str();
+    a++;
+    b++;
   }
-  const std::string relpath = absolute_filepath.substr(absolute_project.size());
-  return "//" + relpath;
+  // the number of ../ to prepend to b depends on the number of remaining
+  // directories in A.
+  const char *suffix = absolute_project.c_str() + common_prefix_len;
+  size_t num_up = 0;
+  while (*suffix != '\0')
+    if (*suffix++ == '/') num_up++;
+  num_up--;  // last one is known to be '/'.
+  std::string result = "//";
+  for (size_t i = 0; i < num_up; i++) result += "../";
+  result += absolute_filepath.substr(common_prefix_len + 1);
+
+  return result;
 }
 
 // Locale-independent code.
diff --git a/tests/test.cpp b/tests/test.cpp
index ce9ce6706..6576a10e2 100644
--- a/tests/test.cpp
+++ b/tests/test.cpp
@@ -1339,7 +1339,6 @@ void ParseProtoTestWithIncludes() {
   flatbuffers::IDLOptions opts;
   opts.include_dependence_headers = true;
   opts.proto_mode = true;
-  opts.project_root = test_data_path;
 
   // Parse proto.
   flatbuffers::Parser parser(opts);
@@ -1357,9 +1356,7 @@ void ParseProtoTestWithIncludes() {
   auto import_fbs = flatbuffers::GenerateFBS(import_parser, "test");
 
   // Ensure generated file is parsable.
-  flatbuffers::IDLOptions opts2;
-  opts2.project_root = protopath;
-  flatbuffers::Parser parser2(opts2);
+  flatbuffers::Parser parser2;
   // Since `imported.fbs` isn't in the filesystem AbsolutePath can't figure it
   // out by itself. We manually construct it so Parser works.
   std::string imported_fbs = flatbuffers::PosixPath(