diff --git a/homeassistant/config.py b/homeassistant/config.py
index ac68f03ff52..27b7ad09bd0 100644
--- a/homeassistant/config.py
+++ b/homeassistant/config.py
@@ -18,6 +18,7 @@ from urllib.parse import urlparse
 from awesomeversion import AwesomeVersion
 import voluptuous as vol
 from voluptuous.humanize import MAX_VALIDATION_ERROR_ITEM_LENGTH
+from yaml.error import MarkedYAMLError
 
 from . import auth
 from .auth import mfa_modules as auth_mfa_modules, providers as auth_providers
@@ -393,12 +394,24 @@ async def async_hass_config_yaml(hass: HomeAssistant) -> dict:
     secrets = Secrets(Path(hass.config.config_dir))
 
     # Not using async_add_executor_job because this is an internal method.
-    config = await hass.loop.run_in_executor(
-        None,
-        load_yaml_config_file,
-        hass.config.path(YAML_CONFIG_FILE),
-        secrets,
-    )
+    try:
+        config = await hass.loop.run_in_executor(
+            None,
+            load_yaml_config_file,
+            hass.config.path(YAML_CONFIG_FILE),
+            secrets,
+        )
+    except HomeAssistantError as ex:
+        if not (base_ex := ex.__cause__) or not isinstance(base_ex, MarkedYAMLError):
+            raise
+
+        # Rewrite path to offending YAML file to be relative the hass config dir
+        if base_ex.context_mark and base_ex.context_mark.name:
+            base_ex.context_mark.name = _relpath(hass, base_ex.context_mark.name)
+        if base_ex.problem_mark and base_ex.problem_mark.name:
+            base_ex.problem_mark.name = _relpath(hass, base_ex.problem_mark.name)
+        raise
+
     core_config = config.get(CONF_CORE, {})
     await merge_packages_config(hass, config, core_config.get(CONF_PACKAGES, {}))
     return config
diff --git a/tests/snapshots/test_config.ambr b/tests/snapshots/test_config.ambr
index 785989ad839..e8a0f3c1189 100644
--- a/tests/snapshots/test_config.ambr
+++ b/tests/snapshots/test_config.ambr
@@ -349,7 +349,7 @@
 # name: test_yaml_error[basic]
   '''
   mapping values are not allowed here
-    in "<BASE_PATH>/fixtures/core/config/yaml_errors/basic/configuration.yaml", line 4, column 14
+    in "configuration.yaml", line 4, column 14
   '''
 # ---
 # name: test_yaml_error[basic].1
@@ -363,7 +363,7 @@
 # name: test_yaml_error[basic_include]
   '''
   mapping values are not allowed here
-    in "<BASE_PATH>/fixtures/core/config/yaml_errors/basic_include/integrations/iot_domain.yaml", line 3, column 12
+    in "integrations/iot_domain.yaml", line 3, column 12
   '''
 # ---
 # name: test_yaml_error[basic_include].1
@@ -377,7 +377,7 @@
 # name: test_yaml_error[include_dir_list]
   '''
   mapping values are not allowed here
-    in "<BASE_PATH>/fixtures/core/config/yaml_errors/include_dir_list/iot_domain/iot_domain_1.yaml", line 3, column 10
+    in "iot_domain/iot_domain_1.yaml", line 3, column 10
   '''
 # ---
 # name: test_yaml_error[include_dir_list].1
@@ -391,7 +391,7 @@
 # name: test_yaml_error[include_dir_merge_list]
   '''
   mapping values are not allowed here
-    in "<BASE_PATH>/fixtures/core/config/yaml_errors/include_dir_merge_list/iot_domain/iot_domain_1.yaml", line 3, column 12
+    in "iot_domain/iot_domain_1.yaml", line 3, column 12
   '''
 # ---
 # name: test_yaml_error[include_dir_merge_list].1
@@ -405,7 +405,7 @@
 # name: test_yaml_error[packages_include_dir_named]
   '''
   mapping values are not allowed here
-    in "<BASE_PATH>/fixtures/core/config/yaml_errors/packages_include_dir_named/integrations/adr_0007_1.yaml", line 4, column 9
+    in "integrations/adr_0007_1.yaml", line 4, column 9
   '''
 # ---
 # name: test_yaml_error[packages_include_dir_named].1