diff --git a/beets/library.py b/beets/library.py
index 9be3a1602..b813d2ba4 100644
--- a/beets/library.py
+++ b/beets/library.py
@@ -1084,7 +1084,9 @@ class Item(LibModel):
         (i.e., where the file ought to be).
 
         The path is returned as a bytestring. ``basedir`` can override the
-        library's base directory for the destination.
+        library's base directory for the destination. If ``relative_to_libdir``
+        is true, returns just the fragment of the path underneath the library
+        base directory.
         """
         db = self._check_db()
         basedir = basedir or db.directory
diff --git a/docs/changelog.rst b/docs/changelog.rst
index 09259e1fa..9bc065419 100644
--- a/docs/changelog.rst
+++ b/docs/changelog.rst
@@ -28,6 +28,8 @@ Bug fixes:
 * :doc:`plugins/musicbrainz`: fix regression where user configured
   ``extra_tags`` have been read incorrectly.
   :bug:`5788`
+* tests: Fix library tests failing on Windows when run from outside ``D:/``.
+  :bug:`5802`
 
 For packagers:
 
diff --git a/test/test_library.py b/test/test_library.py
index 39f1d0b9e..bb014d76d 100644
--- a/test/test_library.py
+++ b/test/test_library.py
@@ -34,7 +34,7 @@ from beets.library import Album
 from beets.test import _common
 from beets.test._common import item
 from beets.test.helper import BeetsTestCase, ItemInDBTestCase
-from beets.util import as_string, bytestring_path, syspath
+from beets.util import as_string, bytestring_path, normpath, syspath
 
 # Shortcut to path normalization.
 np = util.normpath
@@ -553,6 +553,9 @@ class ItemFormattedMappingTest(ItemInDBTestCase):
 class PathFormattingMixin:
     """Utilities for testing path formatting."""
 
+    i: beets.library.Item
+    lib: beets.library.Library
+
     def _setf(self, fmt):
         self.lib.path_formats.insert(0, ("default", fmt))
 
@@ -560,9 +563,12 @@ class PathFormattingMixin:
         if i is None:
             i = self.i
 
+        # Handle paths on Windows.
         if os.path.sep != "/":
             dest = dest.replace(b"/", os.path.sep.encode())
-            dest = b"D:" + dest
+
+            # Paths are normalized based on the CWD.
+            dest = normpath(dest)
 
         actual = i.destination()