diff --git a/mercurial/dispatch.py b/mercurial/dispatch.py
--- a/mercurial/dispatch.py
+++ b/mercurial/dispatch.py
@@ -991,6 +991,8 @@
             lui.readconfig(os.path.join(path, b".hg", b"hgrc-not-shared"), path)
 
     if rpath:
+        if wd is not None:
+            rpath = os.path.join(wd, rpath)
         path = urlutil.get_clone_path(lui, rpath)[0]
         lui = ui.copy()
         if rcutil.use_repo_hgrc():
diff --git a/tests/test-chg.t b/tests/test-chg.t
--- a/tests/test-chg.t
+++ b/tests/test-chg.t
@@ -433,6 +433,15 @@
   YYYY/MM/DD HH:MM:SS (PID)> log -R cached
   YYYY/MM/DD HH:MM:SS (PID)> loaded repo into cache: $TESTTMP/cached (in  ...s)
 
+-R is interpreted relative to --cwd
+
+  $ hg init repo1
+  $ hg init repo2
+  $ printf "[alias]\nx=y\n" >> repo1/.hg/hgrc
+  $ printf "[alias]\nx=z\n" >> repo2/.hg/hgrc
+  $ (cd repo1; chg --cwd ../repo2 -R . show alias.x)
+  z
+
 Test that chg works (sets to the user's actual LC_CTYPE) even when python
 "coerces" the locale (py3.7+)
 
@@ -537,3 +546,4 @@
   $ filteredchg log -r . --no-profile
   $ filteredchg log -r .
   Sample count: * (glob)
+  $ cd ../