diff --git a/conf_schema.h b/conf_schema.h
index 710e98da..79e57aec 100644
--- a/conf_schema.h
+++ b/conf_schema.h
@@ -210,7 +210,7 @@ ATOM(char, vomp,		        0, cf_opt_char_boolean,, "")
 END_STRUCT
 
 STRUCT(log)
-STRING(256,                 file,       "", cf_opt_absolute_path,, "Absolute path of log file")
+STRING(256,                 file,       "", cf_opt_str_nonempty,, "Path of log file, either absolute or relative to instance directory")
 ATOM(int,                   show_pid,   1, cf_opt_int_boolean,, "If true, all log lines contain PID of logging process")
 ATOM(int,                   show_time,  1, cf_opt_int_boolean,, "If true, all log lines contain time stamp")
 END_STRUCT
diff --git a/log.c b/log.c
index 301e238e..38d0f41e 100644
--- a/log.c
+++ b/log.c
@@ -79,15 +79,21 @@ static FILE *_open_logging()
       logpath = config.log.file;
     }
     if (!logpath || !logpath[0]) {
-      logfile = stderr; //fopen("/tmp/foo", "a");
+      logfile = stderr;
       INFO("No logfile configured -- logging to stderr");
-    } else if ((logfile = fopen(logpath, "a"))) {
-      setlinebuf(logfile);
-      INFOF("Logging to %s (fd %d)", logpath, fileno(logfile));
     } else {
-      logfile = stderr; //fopen("/tmp/bar", "a");
-      WARNF_perror("fopen(%s)", logpath);
-      WARNF("Cannot append to %s -- falling back to stderr", logpath);
+      char path[1024];
+      if (!FORM_SERVAL_INSTANCE_PATH(path, logpath)) {
+	logfile = stderr;
+	INFO("Logfile path overrun -- logging to stderr");
+      } else if ((logfile = fopen(path, "a"))) {
+	setlinebuf(logfile);
+	INFOF("Logging to %s (fd %d)", path, fileno(logfile));
+      } else {
+	logfile = stderr;
+	WARNF_perror("fopen(%s)", path);
+	WARNF("Cannot append to %s -- falling back to stderr", path);
+      }
     }
   }
   return logfile;
diff --git a/tests/config b/tests/config
index cd0abfbe..3e30e474 100755
--- a/tests/config
+++ b/tests/config
@@ -264,4 +264,24 @@ test_InterfacesModernIncompatible() {
       --error-pattern='config file.*not loaded.*incompatible'
 }
 
+doc_LogFileAbsolute="Absolute log file"
+test_LogFileAbsolute() {
+   executeOk_servald config \
+      set debug.verbose true \
+      set log.file "$PWD/log"
+   executeOk_servald echo one
+   assertGrep log '^DEBUG:.*echo:argv\[1\]="one"$'
+   assertGrep --matches=0 --message="log contains no error messages" log '^ERROR:'
+}
+
+doc_LogFileRelative="Relative log file"
+test_LogFileRelative() {
+   executeOk_servald config \
+      set debug.verbose true \
+      set log.file "log"
+   executeOk_servald echo one
+   assertGrep "$SERVALINSTANCE_PATH/log" '^DEBUG:.*echo:argv\[1\]="one"$'
+   assertGrep --matches=0 --message="log contains no error messages" "$SERVALINSTANCE_PATH/log" '^ERROR:'
+}
+
 runTests "$@"