diff --git a/Gems/AtomLyIntegration/CommonFeatures/Code/Source/Material/EditorMaterialSystemComponent.cpp b/Gems/AtomLyIntegration/CommonFeatures/Code/Source/Material/EditorMaterialSystemComponent.cpp
index a8d6270c7e..efb79bb06c 100644
--- a/Gems/AtomLyIntegration/CommonFeatures/Code/Source/Material/EditorMaterialSystemComponent.cpp
+++ b/Gems/AtomLyIntegration/CommonFeatures/Code/Source/Material/EditorMaterialSystemComponent.cpp
@@ -130,6 +130,12 @@ namespace AZ
                 arguments.append(QString("--rhi=%1").arg(apiName.GetCStr()));
             }
 
+            AZ::IO::FixedMaxPathString projectPath(AZ::Utils::GetProjectPath());
+            if (!projectPath.empty())
+            {
+                arguments.append(QString("--project-path=%1").arg(projectPath.c_str()));
+            }
+
             AtomToolsFramework::LaunchTool("MaterialEditor", ".exe", arguments);
         }