diff --git a/src/cli/tui/screens/agent/AddAgentScreen.tsx b/src/cli/tui/screens/agent/AddAgentScreen.tsx
index c8961c065..13c953144 100644
--- a/src/cli/tui/screens/agent/AddAgentScreen.tsx
+++ b/src/cli/tui/screens/agent/AddAgentScreen.tsx
@@ -45,7 +45,6 @@ import {
 } from './types';
 import { Box, Text, useInput } from 'ink';
 import Spinner from 'ink-spinner';
-import { basename, resolve } from 'path';
 import React, { useCallback, useEffect, useMemo, useRef, useState } from 'react';
 
 // Helper to get provider display name and env var name from ModelProvider
@@ -1086,12 +1085,18 @@ export function AddAgentScreen({ existingAgentNames, onComplete, onExit }: AddAg
         {byoStep === 'dockerfile' && (
           <PathInput
             placeholder="Select a Dockerfile"
-            basePath={resolve(project?.projectRoot ?? process.cwd(), byoConfig.codeLocation)}
+            // basePath omitted → defaults to process.cwd(), matching the
+            // "add policy" wizard. Resolving from the not-yet-created
+            // project's codeLocation produced confusing "not a valid path"
+            // errors (issue #1128).
             pathType="file"
             allowEmpty
             emptyHelpText="Press Enter to use the default Dockerfile"
             onSubmit={value => {
-              setByoConfig(c => ({ ...c, dockerfile: value ? basename(value) : '' }));
+              // Preserve the full user-supplied path so handleByoPath can
+              // locate and copy the source file. The file is collapsed to a
+              // basename only after a successful copy into the code dir.
+              setByoConfig(c => ({ ...c, dockerfile: value }));
               goToNextByoStep('dockerfile');
             }}
             onCancel={handleByoBack}
diff --git a/src/cli/tui/screens/agent/__tests__/resolveDockerfileSource.test.ts b/src/cli/tui/screens/agent/__tests__/resolveDockerfileSource.test.ts
new file mode 100644
index 000000000..2f69342fd
--- /dev/null
+++ b/src/cli/tui/screens/agent/__tests__/resolveDockerfileSource.test.ts
@@ -0,0 +1,66 @@
+import { resolveDockerfileSource } from '../useAddAgent';
+import { resolve } from 'path';
+import { describe, expect, it } from 'vitest';
+
+/**
+ * Regression tests for issue #1128: the Dockerfile picker in the agent BYO
+ * wizard must resolve user-supplied paths relative to the directory the user
+ * invoked `agentcore` from, NOT relative to the (possibly not-yet-created)
+ * project's code directory.
+ */
+describe('resolveDockerfileSource', () => {
+  it('returns null for undefined (no dockerfile selected)', () => {
+    expect(resolveDockerfileSource(undefined)).toBeNull();
+  });
+
+  it('returns null for empty string (user pressed Enter for default)', () => {
+    expect(resolveDockerfileSource('')).toBeNull();
+  });
+
+  it('returns null for a bare filename (no slash)', () => {
+    // A bare filename means the file is expected to already live inside the
+    // build context's code directory; no copy is needed.
+    expect(resolveDockerfileSource('Dockerfile')).toBeNull();
+    expect(resolveDockerfileSource('Dockerfile.dev')).toBeNull();
+  });
+
+  it('resolves a relative path against the supplied cwd, not against any project root', () => {
+    const cwd = '/home/user/workplace/.github';
+    expect(resolveDockerfileSource('docker/MyDockerfile.dev', cwd)).toBe(resolve(cwd, 'docker/MyDockerfile.dev'));
+  });
+
+  it('resolves a nested relative path against the supplied cwd', () => {
+    const cwd = '/home/user/workplace/.github';
+    expect(resolveDockerfileSource('subdir/MyDockerfile', cwd)).toBe(resolve(cwd, 'subdir/MyDockerfile'));
+  });
+
+  it('resolves "./Dockerfile" against the supplied cwd', () => {
+    const cwd = '/home/user/workplace/.github';
+    // "./Dockerfile" contains "/", so it is treated as a real path, not a
+    // bare filename. resolve() collapses the "./" segment.
+    expect(resolveDockerfileSource('./Dockerfile', cwd)).toBe(resolve(cwd, 'Dockerfile'));
+  });
+
+  it('preserves absolute paths (they are not re-rooted)', () => {
+    const cwd = '/home/user/workplace/.github';
+    const abs = '/tmp/elsewhere/Dockerfile';
+    expect(resolveDockerfileSource(abs, cwd)).toBe(abs);
+  });
+
+  it('defaults to process.cwd() when no cwd argument is supplied', () => {
+    const original = process.cwd();
+    expect(resolveDockerfileSource('subdir/Dockerfile')).toBe(resolve(original, 'subdir/Dockerfile'));
+  });
+
+  it('does NOT resolve relative to a project root (regression for #1128)', () => {
+    // The bug: previously the picker rooted at <projectRoot>/<codeLocation>,
+    // e.g. /home/user/.github/myproj/app/myagent/. A user typing
+    // "MyDockerfile" from /home/user/.github would have it looked up at
+    // /home/user/.github/myproj/app/myagent/MyDockerfile — wrong.
+    const cwd = '/home/user/workplace/.github';
+    const resolved = resolveDockerfileSource('subdir/MyDockerfile', cwd);
+    expect(resolved).toBe('/home/user/workplace/.github/subdir/MyDockerfile');
+    expect(resolved).not.toContain('/app/');
+    expect(resolved).not.toContain('/myproj/');
+  });
+});
diff --git a/src/cli/tui/screens/agent/useAddAgent.ts b/src/cli/tui/screens/agent/useAddAgent.ts
index e2fabe140..3d9ea0fa3 100644
--- a/src/cli/tui/screens/agent/useAddAgent.ts
+++ b/src/cli/tui/screens/agent/useAddAgent.ts
@@ -59,6 +59,30 @@ export interface AddAgentError {
 
 export type AddAgentOutcome = AddAgentCreateResult | AddAgentByoResult | AddAgentError;
 
+// ─────────────────────────────────────────────────────────────────────────────
+// Dockerfile source resolution
+// ─────────────────────────────────────────────────────────────────────────────
+
+/**
+ * Resolve the absolute source path of a user-supplied Dockerfile.
+ *
+ * The path is interpreted relative to the directory the user invoked
+ * `agentcore` from (process.cwd()), matching the "add policy" file picker
+ * (issue #1128). Absolute paths are returned unchanged. A `null` return
+ * value means the caller should not attempt to copy the file (the user
+ * either left the field empty, indicating they want the default
+ * Dockerfile, or supplied a bare filename indicating the file already
+ * lives inside the build context).
+ */
+export function resolveDockerfileSource(dockerfile: string | undefined, cwd: string = process.cwd()): string | null {
+  // Empty / undefined / bare-filename inputs do not need resolution: empty
+  // means "use default", bare filename means "already in code dir".
+  if (!dockerfile?.includes('/')) {
+    return null;
+  }
+  return resolve(cwd, dockerfile);
+}
+
 // ─────────────────────────────────────────────────────────────────────────────
 // Config Mappers
 // ─────────────────────────────────────────────────────────────────────────────
@@ -260,14 +284,16 @@ async function handleCreatePath(
   const renderer = createRenderer(renderConfig);
   await renderer.render({ outputDir: projectRoot });
 
-  // If dockerfile is a path (contains /), copy it into the agent directory (overwriting template default)
-  if (generateConfig.dockerfile?.includes('/')) {
-    const sourcePath = resolve(projectRoot, generateConfig.dockerfile);
-    if (!existsSync(sourcePath)) {
-      return { ok: false, error: `Dockerfile not found at ${sourcePath}` };
+  // If dockerfile is a path (contains /), copy it into the agent directory (overwriting template default).
+  // The path is interpreted relative to the directory the user invoked agentcore from (process.cwd()),
+  // matching the behavior of the "add policy" file picker (issue #1128).
+  const createSourcePath = resolveDockerfileSource(generateConfig.dockerfile);
+  if (createSourcePath !== null) {
+    if (!existsSync(createSourcePath)) {
+      return { ok: false, error: `Dockerfile not found at ${createSourcePath}` };
     }
-    const filename = basename(sourcePath);
-    copyFileSync(sourcePath, join(agentPath, filename));
+    const filename = basename(createSourcePath);
+    copyFileSync(createSourcePath, join(agentPath, filename));
     generateConfig.dockerfile = filename;
   }
 
@@ -369,15 +395,17 @@ async function handleByoPath(
   const codeDir = join(projectRoot, config.codeLocation.replace(/\/$/, ''));
   mkdirSync(codeDir, { recursive: true });
 
-  // If dockerfile is a path (contains /), copy it into the code directory and use the filename
+  // If dockerfile is a path (contains /), copy it into the code directory and use the filename.
+  // The user-supplied path is resolved relative to process.cwd() — the directory the user
+  // invoked agentcore from — matching the "add policy" file picker (issue #1128).
   let dockerfileName = config.dockerfile;
-  if (dockerfileName?.includes('/')) {
-    const sourcePath = resolve(projectRoot, dockerfileName);
-    if (!existsSync(sourcePath)) {
-      return { ok: false, error: `Dockerfile not found at ${sourcePath}` };
+  const byoSourcePath = resolveDockerfileSource(dockerfileName);
+  if (byoSourcePath !== null) {
+    if (!existsSync(byoSourcePath)) {
+      return { ok: false, error: `Dockerfile not found at ${byoSourcePath}` };
     }
-    dockerfileName = basename(sourcePath);
-    copyFileSync(sourcePath, join(codeDir, dockerfileName));
+    dockerfileName = basename(byoSourcePath);
+    copyFileSync(byoSourcePath, join(codeDir, dockerfileName));
   }
 
   const project = await configIO.readProjectSpec();
diff --git a/src/cli/tui/screens/generate/GenerateWizardUI.tsx b/src/cli/tui/screens/generate/GenerateWizardUI.tsx
index 9c6c79599..c2339cc5e 100644
--- a/src/cli/tui/screens/generate/GenerateWizardUI.tsx
+++ b/src/cli/tui/screens/generate/GenerateWizardUI.tsx
@@ -36,7 +36,6 @@ import {
 } from './types';
 import type { useGenerateWizard } from './useGenerateWizard';
 import { Box, Text, useInput } from 'ink';
-import { basename } from 'path';
 
 // Helper to get provider display name and env var name from ModelProvider
 function getProviderInfo(provider: ModelProvider): { name: string; envVarName: string } {
@@ -234,7 +233,11 @@ export function GenerateWizardUI({
           allowEmpty
           emptyHelpText="Press Enter to use the default Dockerfile"
           onSubmit={value => {
-            wizard.setDockerfile(value ? basename(value) : undefined);
+            // Preserve the full user-supplied path so handleCreatePath can
+            // locate and copy the source file. The path is collapsed to a
+            // basename only after a successful copy into the agent dir
+            // (issue #1128).
+            wizard.setDockerfile(value || undefined);
           }}
           onCancel={onBack}
         />