diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/PrefabPublicHandler.cpp b/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/PrefabPublicHandler.cpp
index 417a524e77..26191c97af 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/PrefabPublicHandler.cpp
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/PrefabPublicHandler.cpp
@@ -58,7 +58,7 @@ namespace AzToolsFramework
             m_prefabUndoCache.Destroy();
         }
 
-        PrefabOperationResult PrefabPublicHandler::CreatePrefab(const AZStd::vector<AZ::EntityId>& entityIds, AZStd::string_view filePath)
+        PrefabOperationResult PrefabPublicHandler::CreatePrefab(const AZStd::vector<AZ::EntityId>& entityIds, AZ::IO::PathView filePath)
         {
             // Retrieve entityList from entityIds
             EntityList inputEntityList;
diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/PrefabPublicHandler.h b/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/PrefabPublicHandler.h
index 46a7f946ba..80f28d7edb 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/PrefabPublicHandler.h
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/PrefabPublicHandler.h
@@ -42,7 +42,7 @@ namespace AzToolsFramework
             void UnregisterPrefabPublicHandlerInterface();
 
             // PrefabPublicInterface...
-            PrefabOperationResult CreatePrefab(const AZStd::vector<AZ::EntityId>& entityIds, AZStd::string_view filePath) override;
+            PrefabOperationResult CreatePrefab(const AZStd::vector<AZ::EntityId>& entityIds, AZ::IO::PathView filePath) override;
             PrefabOperationResult InstantiatePrefab(AZStd::string_view filePath, AZ::EntityId parent, AZ::Vector3 position) override;
             PrefabOperationResult SavePrefab(AZ::IO::Path filePath) override;
             PrefabEntityResult CreateEntity(AZ::EntityId parentId, const AZ::Vector3& position) override;
diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/PrefabPublicInterface.h b/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/PrefabPublicInterface.h
index 81a5258d91..4e59729ab2 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/PrefabPublicInterface.h
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/Prefab/PrefabPublicInterface.h
@@ -49,7 +49,7 @@ namespace AzToolsFramework
              * @param filePath The path for the new prefab file.
              * @return An outcome object; on failure, it comes with an error message detailing the cause of the error.
              */
-            virtual PrefabOperationResult CreatePrefab(const AZStd::vector<AZ::EntityId>& entityIds, AZStd::string_view filePath) = 0;
+            virtual PrefabOperationResult CreatePrefab(const AZStd::vector<AZ::EntityId>& entityIds, AZ::IO::PathView filePath) = 0;
 
             /**
              * Instantiate a prefab from a prefab file.
diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Prefab/PrefabIntegrationManager.cpp b/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Prefab/PrefabIntegrationManager.cpp
index 1e71b545b5..6ce3fdc755 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Prefab/PrefabIntegrationManager.cpp
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Prefab/PrefabIntegrationManager.cpp
@@ -24,6 +24,7 @@
 #include <AzToolsFramework/AssetBrowser/AssetBrowserBus.h>
 #include <AzToolsFramework/AssetBrowser/AssetSelectionModel.h>
 #include <AzToolsFramework/AssetBrowser/Entries/SourceAssetBrowserEntry.h>
+#include <AzToolsFramework/Prefab/PrefabLoaderInterface.h>
 #include <AzToolsFramework/ToolsComponents/EditorLayerComponentBus.h>
 #include <AzToolsFramework/UI/EditorEntityUi/EditorEntityUiInterface.h>
 #include <AzToolsFramework/UI/Prefab/PrefabIntegrationInterface.h>
@@ -39,9 +40,12 @@ namespace AzToolsFramework
 {
     namespace Prefab
     {
+        
         EditorEntityUiInterface* PrefabIntegrationManager::s_editorEntityUiInterface = nullptr;
         PrefabPublicInterface* PrefabIntegrationManager::s_prefabPublicInterface = nullptr;
         PrefabEditInterface* PrefabIntegrationManager::s_prefabEditInterface = nullptr;
+        PrefabLoaderInterface* PrefabIntegrationManager::s_prefabLoaderInterface = nullptr;
+
         const AZStd::string PrefabIntegrationManager::s_prefabFileExtension = ".prefab";
 
         void PrefabUserSettings::Reflect(AZ::ReflectContext* context)
@@ -79,6 +83,13 @@ namespace AzToolsFramework
                 return;
             }
 
+            s_prefabLoaderInterface = AZ::Interface<PrefabLoaderInterface>::Get();
+            if (s_prefabLoaderInterface == nullptr)
+            {
+                AZ_Assert(false, "Prefab - could not get PrefabLoaderInterface on PrefabIntegrationManager construction.");
+                return;
+            }
+
             EditorContextMenuBus::Handler::BusConnect();
             PrefabInstanceContainerNotificationBus::Handler::BusConnect();
             AZ::Interface<PrefabIntegrationInterface>::Register(this);
@@ -320,14 +331,15 @@ namespace AzToolsFramework
 
                 GenerateSuggestedFilenameFromEntities(prefabRootEntities, suggestedName);
 
-                if (!QueryUserForPrefabSaveLocation(suggestedName, targetDirectory, AZ_CRC("PrefabUserSettings"), activeWindow, prefabName, prefabFilePath))
+                if (!QueryUserForPrefabSaveLocation(
+                        suggestedName, targetDirectory, AZ_CRC("PrefabUserSettings"), activeWindow, prefabName, prefabFilePath))
                 {
                     // User canceled prefab creation, or error prevented continuation.
                     return;
                 }
             }
 
-            auto createPrefabOutcome = s_prefabPublicInterface->CreatePrefab(selectedEntities, prefabFilePath);
+            auto createPrefabOutcome = s_prefabPublicInterface->CreatePrefab(selectedEntities, s_prefabLoaderInterface->GetRelativePathToProject(prefabFilePath.data()));
 
             if (!createPrefabOutcome.IsSuccess())
             {
diff --git a/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Prefab/PrefabIntegrationManager.h b/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Prefab/PrefabIntegrationManager.h
index 66a047df28..c9b846aa5b 100644
--- a/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Prefab/PrefabIntegrationManager.h
+++ b/Code/Framework/AzToolsFramework/AzToolsFramework/UI/Prefab/PrefabIntegrationManager.h
@@ -29,6 +29,9 @@ namespace AzToolsFramework
 {
     namespace Prefab
     {
+
+        class PrefabLoaderInterface;
+
         //! Structure for saving/retrieving user settings related to prefab workflows.
         class PrefabUserSettings
             : public AZ::UserSettings
@@ -129,6 +132,7 @@ namespace AzToolsFramework
             static EditorEntityUiInterface* s_editorEntityUiInterface;
             static PrefabPublicInterface* s_prefabPublicInterface;
             static PrefabEditInterface* s_prefabEditInterface;
+            static PrefabLoaderInterface* s_prefabLoaderInterface;
         };
     }
 }