diff --git a/src/core/qgsmaplayer.cpp b/src/core/qgsmaplayer.cpp
index e1cfb6040556..4da4369fac02 100644
--- a/src/core/qgsmaplayer.cpp
+++ b/src/core/qgsmaplayer.cpp
@@ -565,17 +565,16 @@ bool QgsMapLayer::readLayerXml( const QDomElement &layerElement, QgsReadWriteCon
   mnl = layerElement.namedItem( QStringLiteral( "datasource" ) );
   mne = mnl.toElement();
   const QString dataSourceRaw = mne.text();
-  mDataSource = provider.isEmpty() ? dataSourceRaw : QgsProviderRegistry::instance()->relativeToAbsoluteUri( provider, dataSourceRaw, context );
 
   // if the layer needs authentication, ensure the master password is set
   const thread_local QRegularExpression rx( "authcfg=([a-z]|[A-Z]|[0-9]){7}" );
-  if ( rx.match( mDataSource ).hasMatch()
+  if ( rx.match( dataSourceRaw ).hasMatch()
        && !QgsApplication::authManager()->setMasterPassword( true ) )
   {
     return false;
   }
 
-  mDataSource = decodedSource( mDataSource, provider, context );
+  mDataSource = decodedSource( dataSourceRaw, provider, context );
 
   // Set the CRS from project file, asking the user if necessary.
   // Make it the saved CRS to have WMS layer projected correctly.
@@ -777,10 +776,7 @@ bool QgsMapLayer::writeLayerXml( QDomElement &layerElement, QDomDocument &docume
 
   // data source
   QDomElement dataSource = document.createElement( QStringLiteral( "datasource" ) );
-  const QgsDataProvider *provider = dataProvider();
-  const QString providerKey = provider ? provider->name() : QString();
-  const QString srcRaw = encodedSource( source(), context );
-  const QString src = providerKey.isEmpty() ? srcRaw : QgsProviderRegistry::instance()->absoluteToRelativeUri( providerKey, srcRaw, context );
+  const QString src = encodedSource( source(), context );
   const QDomText dataSourceText = document.createTextNode( src );
   dataSource.appendChild( dataSourceText );
   layerElement.appendChild( dataSource );
diff --git a/src/core/qgspathresolver.cpp b/src/core/qgspathresolver.cpp
index 1781d1b78eae..92b519b24ea5 100644
--- a/src/core/qgspathresolver.cpp
+++ b/src/core/qgspathresolver.cpp
@@ -290,6 +290,12 @@ QString QgsPathResolver::writePath( const QString &s ) const
   }
 
   const QFileInfo srcFileInfo( srcPath );
+  // Guard against relative paths: If srcPath is already relative, QFileInfo will match
+  // files in the working directory, instead of project directory. Avoid by returning early.
+  if ( !srcFileInfo.isAbsolute() )
+  {
+    return srcPath;
+  }
   if ( srcFileInfo.exists() )
     srcPath = srcFileInfo.canonicalFilePath();
 
diff --git a/tests/src/core/testqgsproject.cpp b/tests/src/core/testqgsproject.cpp
index 4efe6afd7870..491a303b3185 100644
--- a/tests/src/core/testqgsproject.cpp
+++ b/tests/src/core/testqgsproject.cpp
@@ -65,6 +65,7 @@ class TestQgsProject : public QObject
     void testAttachmentIdentifier();
     void testEmbeddedGroupWithJoins();
     void testAsynchronousLayerLoading();
+    void regression60100();
 };
 
 void TestQgsProject::init()
@@ -1103,5 +1104,83 @@ void TestQgsProject::testAsynchronousLayerLoading()
 }
 
 
+void TestQgsProject::regression60100()
+{
+  /*
+  * Regression test for QGIS issue #60100 (https://github.com/qgis/QGIS/issues/60100)
+  * This test ensures that when saving a QGIS project with relative paths,
+  * the correct layer datasource is preserved, even when the current working
+  * directory (CWD) contains a file with the same name as the layer datasource.
+  *
+  * Previous behavior:
+  * - If a file with the same name as a layer datasource existed in the CWD,
+  *   the layer path in the saved project would point to the file in the CWD,
+  *   rather than the intended file in the project directory (PROJDIR).
+  *
+  * Test steps:
+  * 1. Create a temporary directory structure with two subfolders: WORKDIR and PROJDIR.
+  * 2. Copy a `points.geojson` file to both WORKDIR and PROJDIR.
+  * 3. Create a new QGIS project in PROJDIR and add the `points.geojson` file from PROJDIR as a layer.
+  * 4. Change the working directory to WORKDIR and save the project.
+  * 5. Verify that the saved project references the correct datasource (`./points.geojson` in PROJDIR)
+  *    and does not erroneously reference the file in WORKDIR.
+  */
+  // Create directory structure with 2 subfolders
+  const QTemporaryDir baseDir;
+  const QDir base( baseDir.path() );
+  base.mkdir( QStringLiteral( "WORKDIR" ) );
+  base.mkdir( QStringLiteral( "PROJDIR" ) );
+  const QString workDirPath = baseDir.path() + QStringLiteral( "/WORKDIR" );
+  const QString projDirPath = baseDir.path() + QStringLiteral( "/PROJDIR" );
+
+  // Save our old CWD and switch to the new WORKDIR
+  const QString oldCWD = QDir::currentPath();
+  QVERIFY( QDir::setCurrent( workDirPath ) );
+
+  // Copy points.geojson to both subfolders
+  const QString testDataDir( TEST_DATA_DIR );
+  const QString pointsPath = testDataDir + QStringLiteral( "/points.geojson" );
+  QFile::copy( pointsPath, workDirPath + QStringLiteral( "/points.geojson" ) );
+  QFile::copy( pointsPath, projDirPath + QStringLiteral( "/points.geojson" ) );
+
+  // Create a new/empty project in PROJDIR
+  const QString projectPath = projDirPath + QStringLiteral( "/project.qgs" );
+  std::unique_ptr<QgsProject> project = std::make_unique<QgsProject>();
+
+  // Add the local points.geojson (in PROJDIR) as a layer
+  std::unique_ptr<QgsVectorLayer> layer = std::make_unique<QgsVectorLayer>(
+    projDirPath + QStringLiteral( "/points.geojson" ),
+    QStringLiteral( "Test Points" ),
+    QStringLiteral( "ogr" )
+  );
+  project->addMapLayer( layer.release() );
+
+  // Write (save) the project to disk. This used to pick up the WRONG file and save it to the proj.
+  project->write( projectPath );
+
+  // Restore old working directory
+  QVERIFY( QDir::setCurrent( oldCWD ) );
+
+  // Verify the layer path in the project file
+  QDomDocument doc;
+  QFile projectFile( projectPath );
+  bool res = projectFile.open( QIODevice::ReadOnly );
+  Q_ASSERT( res );
+  res = static_cast<bool>( doc.setContent( &projectFile ) );
+  Q_ASSERT( res );
+  projectFile.close();
+
+  const QDomElement docElem = doc.documentElement();
+  const QDomElement layersElem = docElem.firstChildElement( QStringLiteral( "projectlayers" ) );
+  QDomElement layerElem = layersElem.firstChildElement();
+  while ( !layerElem.isNull() )
+  {
+    const QString layerSource = layerElem.firstChildElement( QStringLiteral( "datasource" ) ).text();
+    // Should NOT be "../WORKDIR/points.geojson"
+    QCOMPARE( layerSource, QStringLiteral( "./points.geojson" ) );
+    layerElem = layerElem.nextSiblingElement();
+  }
+}
+
 QGSTEST_MAIN( TestQgsProject )
 #include "testqgsproject.moc"