diff --git a/.changeset/soft-gifts-chew.md b/.changeset/soft-gifts-chew.md
new file mode 100644
index 0000000000..488cd58516
--- /dev/null
+++ b/.changeset/soft-gifts-chew.md
@@ -0,0 +1,5 @@
+---
+'@frontside/scaffolder-yaml-actions': patch
+---
+
+Allow target files to be in directories
diff --git a/plugins/scaffolder-yaml-actions/src/actions/append.ts b/plugins/scaffolder-yaml-actions/src/actions/append.ts
index 85a3514c31..934687f5fa 100644
--- a/plugins/scaffolder-yaml-actions/src/actions/append.ts
+++ b/plugins/scaffolder-yaml-actions/src/actions/append.ts
@@ -63,6 +63,7 @@ export function createYamlAppendAction({
           ...ctx,
           input: {
             url: _path.dirname(ctx.input.url),
+            targetPath: _path.dirname(filepath)
           },
         });
         
diff --git a/plugins/scaffolder-yaml-actions/src/actions/set.ts b/plugins/scaffolder-yaml-actions/src/actions/set.ts
index b81badf2ba..2bbda54bde 100644
--- a/plugins/scaffolder-yaml-actions/src/actions/set.ts
+++ b/plugins/scaffolder-yaml-actions/src/actions/set.ts
@@ -63,6 +63,7 @@ export function createYamlSetAction({
           ...ctx,
           input: {
             url: _path.dirname(ctx.input.url),
+            targetPath: _path.dirname(filepath)
           },
         });