diff --git a/pkg/cli/compile_compiler_setup.go b/pkg/cli/compile_compiler_setup.go
index b8132a9cdf4..a4afde117a8 100644
--- a/pkg/cli/compile_compiler_setup.go
+++ b/pkg/cli/compile_compiler_setup.go
@@ -90,6 +90,7 @@ func createAndConfigureCompiler(config CompileConfig) *workflow.Compiler {
 	}
 
 	// Create compiler with auto-detected version and action mode
+	// Git root is now auto-detected in NewCompiler() for all compiler instances
 	compiler := workflow.NewCompiler(
 		workflow.WithVerbose(config.Verbose),
 		workflow.WithEngineOverride(config.EngineOverride),
diff --git a/pkg/cli/compile_integration_test.go b/pkg/cli/compile_integration_test.go
index 82d6791edb0..1797a376e75 100644
--- a/pkg/cli/compile_integration_test.go
+++ b/pkg/cli/compile_integration_test.go
@@ -801,3 +801,95 @@ This workflow tests that invalid schedule strings in array format fail compilati
 
 	t.Logf("Integration test passed - invalid schedule in array format correctly failed compilation\nOutput: %s", outputStr)
 }
+
+// TestCompileFromSubdirectoryCreatesActionsLockAtRoot tests that actions-lock.json
+// is created at the repository root when compiling from a subdirectory
+func TestCompileFromSubdirectoryCreatesActionsLockAtRoot(t *testing.T) {
+	setup := setupIntegrationTest(t)
+	defer setup.cleanup()
+
+	// Initialize git repository (required for git root detection)
+	gitInitCmd := exec.Command("git", "init")
+	gitInitCmd.Dir = setup.tempDir
+	if output, err := gitInitCmd.CombinedOutput(); err != nil {
+		t.Fatalf("Failed to initialize git repository: %v\nOutput: %s", err, string(output))
+	}
+
+	// Configure git user for the repository
+	gitConfigEmail := exec.Command("git", "config", "user.email", "test@test.com")
+	gitConfigEmail.Dir = setup.tempDir
+	if output, err := gitConfigEmail.CombinedOutput(); err != nil {
+		t.Fatalf("Failed to configure git user email: %v\nOutput: %s", err, string(output))
+	}
+
+	gitConfigName := exec.Command("git", "config", "user.name", "Test User")
+	gitConfigName.Dir = setup.tempDir
+	if output, err := gitConfigName.CombinedOutput(); err != nil {
+		t.Fatalf("Failed to configure git user name: %v\nOutput: %s", err, string(output))
+	}
+
+	// Create a simple test workflow
+	// Note: actions-lock.json is only created when actions need to be pinned,
+	// so it may or may not exist. The test verifies it's NOT created in the wrong location.
+	testWorkflow := `---
+name: Test Workflow
+on:
+  workflow_dispatch:
+permissions:
+  contents: read
+engine: copilot
+---
+
+# Test Workflow
+
+Test workflow to verify actions-lock.json path handling when compiling from subdirectory.
+`
+
+	testWorkflowPath := filepath.Join(setup.workflowsDir, "test-action.md")
+	if err := os.WriteFile(testWorkflowPath, []byte(testWorkflow), 0644); err != nil {
+		t.Fatalf("Failed to write test workflow file: %v", err)
+	}
+
+	// Change to the .github/workflows subdirectory
+	if err := os.Chdir(setup.workflowsDir); err != nil {
+		t.Fatalf("Failed to change to workflows subdirectory: %v", err)
+	}
+
+	// Run the compile command from the subdirectory using a relative path
+	cmd := exec.Command(setup.binaryPath, "compile", "test-action.md")
+	output, err := cmd.CombinedOutput()
+	if err != nil {
+		t.Fatalf("CLI compile command failed: %v\nOutput: %s", err, string(output))
+	}
+
+	// Change back to the temp directory root
+	if err := os.Chdir(setup.tempDir); err != nil {
+		t.Fatalf("Failed to change back to temp directory: %v", err)
+	}
+
+	// Verify actions-lock.json is created at the repository root (.github/aw/actions-lock.json)
+	// NOT at .github/workflows/.github/aw/actions-lock.json
+	expectedLockPath := filepath.Join(setup.tempDir, ".github", "aw", "actions-lock.json")
+	wrongLockPath := filepath.Join(setup.workflowsDir, ".github", "aw", "actions-lock.json")
+
+	// Check if actions-lock.json exists (it may or may not, depending on whether actions were pinned)
+	// The important part is that if it exists, it's in the right place
+	if _, err := os.Stat(expectedLockPath); err == nil {
+		t.Logf("actions-lock.json correctly created at repo root: %s", expectedLockPath)
+	} else if !os.IsNotExist(err) {
+		t.Fatalf("Failed to check for actions-lock.json at expected path: %v", err)
+	}
+
+	// Verify actions-lock.json was NOT created in the wrong location
+	if _, err := os.Stat(wrongLockPath); err == nil {
+		t.Errorf("actions-lock.json incorrectly created at nested path: %s (should be at repo root)", wrongLockPath)
+	}
+
+	// Verify the workflow lock file was created
+	lockFilePath := filepath.Join(setup.workflowsDir, "test-action.lock.yml")
+	if _, err := os.Stat(lockFilePath); os.IsNotExist(err) {
+		t.Fatalf("Expected lock file %s was not created", lockFilePath)
+	}
+
+	t.Logf("Integration test passed - actions-lock.json created at correct location")
+}
diff --git a/pkg/workflow/compiler_types.go b/pkg/workflow/compiler_types.go
index 07a8b3759c9..3bed652e2eb 100644
--- a/pkg/workflow/compiler_types.go
+++ b/pkg/workflow/compiler_types.go
@@ -72,6 +72,11 @@ func WithRepositorySlug(slug string) CompilerOption {
 	return func(c *Compiler) { c.repositorySlug = slug }
 }
 
+// WithGitRoot sets the git repository root directory for action cache path
+func WithGitRoot(gitRoot string) CompilerOption {
+	return func(c *Compiler) { c.gitRoot = gitRoot }
+}
+
 // FileTracker interface for tracking files created during compilation
 type FileTracker interface {
 	TrackCreated(filePath string)
@@ -125,6 +130,7 @@ type Compiler struct {
 	repositorySlug          string              // Repository slug (owner/repo) used as seed for scattering
 	artifactManager         *ArtifactManager    // Tracks artifact uploads/downloads for validation
 	scheduleFriendlyFormats map[int]string      // Maps schedule item index to friendly format string for current workflow
+	gitRoot                 string              // Git repository root directory (if set, used for action cache path)
 }
 
 // NewCompiler creates a new workflow compiler with functional options.
@@ -134,6 +140,10 @@ func NewCompiler(opts ...CompilerOption) *Compiler {
 	// Get default version
 	version := defaultVersion
 
+	// Auto-detect git repository root for action cache path resolution
+	// This ensures actions-lock.json is created at repo root regardless of CWD
+	gitRoot := findGitRoot()
+
 	// Create compiler with defaults
 	c := &Compiler{
 		verbose:           false,
@@ -146,6 +156,7 @@ func NewCompiler(opts ...CompilerOption) *Compiler {
 		stepOrderTracker:  NewStepOrderTracker(),
 		artifactManager:   NewArtifactManager(),
 		actionPinWarnings: make(map[string]bool), // Initialize warning cache
+		gitRoot:           gitRoot,               // Auto-detected git root
 	}
 
 	// Apply functional options
@@ -283,11 +294,16 @@ func (c *Compiler) GetScheduleWarnings() []string {
 func (c *Compiler) getSharedActionResolver() (*ActionCache, *ActionResolver) {
 	if c.actionCache == nil {
 		// Initialize cache and resolver on first use
-		cwd, err := os.Getwd()
-		if err != nil {
-			cwd = "."
+		// Use git root if provided, otherwise fall back to current working directory
+		baseDir := c.gitRoot
+		if baseDir == "" {
+			cwd, err := os.Getwd()
+			if err != nil {
+				cwd = "."
+			}
+			baseDir = cwd
 		}
-		c.actionCache = NewActionCache(cwd)
+		c.actionCache = NewActionCache(baseDir)
 
 		// Load existing cache unless force refresh is enabled
 		if !c.forceRefreshActionPins {
diff --git a/pkg/workflow/git_helpers.go b/pkg/workflow/git_helpers.go
index 42c61626903..f7662ab20dd 100644
--- a/pkg/workflow/git_helpers.go
+++ b/pkg/workflow/git_helpers.go
@@ -39,6 +39,22 @@ import (
 
 var gitHelpersLog = logger.New("workflow:git_helpers")
 
+// findGitRoot attempts to find the git repository root directory.
+// Returns empty string if not in a git repository or if git command fails.
+// This function is safe to call from any context and won't cause errors if git is not available.
+func findGitRoot() string {
+	gitHelpersLog.Print("Attempting to find git root directory")
+	cmd := exec.Command("git", "rev-parse", "--show-toplevel")
+	output, err := cmd.Output()
+	if err != nil {
+		gitHelpersLog.Printf("Could not find git root (not a git repo or git not available): %v", err)
+		return ""
+	}
+	gitRoot := strings.TrimSpace(string(output))
+	gitHelpersLog.Printf("Found git root: %s", gitRoot)
+	return gitRoot
+}
+
 // GetCurrentGitTag returns the current git tag if available.
 // Returns empty string if not on a tag.
 func GetCurrentGitTag() string {