diff --git a/bake/bake.go b/bake/bake.go
index 6168f155..59956925 100644
--- a/bake/bake.go
+++ b/bake/bake.go
@@ -951,7 +951,12 @@ func updateContext(t *build.Inputs, inp *Input) {
 	if build.IsRemoteURL(t.ContextPath) {
 		return
 	}
-	st := llb.Scratch().File(llb.Copy(*inp.State, t.ContextPath, "/"), llb.WithCustomNamef("set context to %s", t.ContextPath))
+	st := llb.Scratch().File(
+		llb.Copy(*inp.State, t.ContextPath, "/", &llb.CopyInfo{
+			CopyDirContentsOnly: true,
+		}),
+		llb.WithCustomNamef("set context to %s", t.ContextPath),
+	)
 	t.ContextState = &st
 }
 
@@ -1027,9 +1032,6 @@ func toBuildOpt(t *Target, inp *Input) (*build.Options, error) {
 	if t.Dockerfile != nil {
 		dockerfilePath = *t.Dockerfile
 	}
-	if !build.IsRemoteURL(contextPath) && !path.IsAbs(dockerfilePath) {
-		dockerfilePath = path.Join(contextPath, dockerfilePath)
-	}
 
 	bi := build.Inputs{
 		ContextPath:    contextPath,
@@ -1040,6 +1042,9 @@ func toBuildOpt(t *Target, inp *Input) (*build.Options, error) {
 		bi.DockerfileInline = *t.DockerfileInline
 	}
 	updateContext(&bi, inp)
+	if !build.IsRemoteURL(bi.ContextPath) && bi.ContextState == nil && !path.IsAbs(bi.DockerfilePath) {
+		bi.DockerfilePath = path.Join(bi.ContextPath, bi.DockerfilePath)
+	}
 	if strings.HasPrefix(bi.ContextPath, "cwd://") {
 		bi.ContextPath = path.Clean(strings.TrimPrefix(bi.ContextPath, "cwd://"))
 	}