diff --git a/cli/dotfiles.go b/cli/dotfiles.go
index 0fbbc25a1e37b..472c4c8a03a99 100644
--- a/cli/dotfiles.go
+++ b/cli/dotfiles.go
@@ -4,7 +4,6 @@ import (
 	"bytes"
 	"errors"
 	"fmt"
-	"io/fs"
 	"os"
 	"os/exec"
 	"path/filepath"
@@ -184,7 +183,7 @@ func (r *RootCmd) dotfiles() *serpent.Command {
 				}
 			}
 
-			script := findScript(installScriptSet, files)
+			script := findScript(installScriptSet, dotfilesDir)
 			if script != "" {
 				_, err = cliui.Prompt(inv, cliui.PromptOptions{
 					Text:      fmt.Sprintf("Running install script %s.\n\n  Continue?", script),
@@ -361,15 +360,12 @@ func dirExists(name string) (bool, error) {
 }
 
 // findScript will find the first file that matches the script set.
-func findScript(scriptSet []string, files []fs.DirEntry) string {
+func findScript(scriptSet []string, directory string) string {
 	for _, i := range scriptSet {
-		for _, f := range files {
-			if f.Name() == i {
-				return f.Name()
-			}
+		if _, err := os.Stat(filepath.Join(directory, i)); err == nil {
+			return i
 		}
 	}
-
 	return ""
 }
 
diff --git a/cli/dotfiles_test.go b/cli/dotfiles_test.go
index 6726f35b785ad..2f16929cc24ff 100644
--- a/cli/dotfiles_test.go
+++ b/cli/dotfiles_test.go
@@ -142,6 +142,41 @@ func TestDotfiles(t *testing.T) {
 		require.NoError(t, err)
 		require.Equal(t, string(b), "wow\n")
 	})
+
+	t.Run("NestedInstallScript", func(t *testing.T) {
+		t.Parallel()
+		if runtime.GOOS == "windows" {
+			t.Skip("install scripts on windows require sh and aren't very practical")
+		}
+		_, root := clitest.New(t)
+		testRepo := testGitRepo(t, root)
+
+		scriptPath := filepath.Join("script", "setup")
+		err := os.MkdirAll(filepath.Join(testRepo, "script"), 0o750)
+		require.NoError(t, err)
+		// nolint:gosec
+		err = os.WriteFile(filepath.Join(testRepo, scriptPath), []byte("#!/bin/bash\necho wow > "+filepath.Join(string(root), ".bashrc")), 0o750)
+		require.NoError(t, err)
+
+		c := exec.Command("git", "add", scriptPath)
+		c.Dir = testRepo
+		err = c.Run()
+		require.NoError(t, err)
+
+		c = exec.Command("git", "commit", "-m", `"add script"`)
+		c.Dir = testRepo
+		err = c.Run()
+		require.NoError(t, err)
+
+		inv, _ := clitest.New(t, "dotfiles", "--global-config", string(root), "--symlink-dir", string(root), "-y", testRepo)
+		err = inv.Run()
+		require.NoError(t, err)
+
+		b, err := os.ReadFile(filepath.Join(string(root), ".bashrc"))
+		require.NoError(t, err)
+		require.Equal(t, string(b), "wow\n")
+	})
+
 	t.Run("InstallScriptChangeBranch", func(t *testing.T) {
 		t.Parallel()
 		if runtime.GOOS == "windows" {