diff --git a/docs/features/daily-notes.md b/docs/features/daily-notes.md
index 555ce78b..033b8fdb 100644
--- a/docs/features/daily-notes.md
+++ b/docs/features/daily-notes.md
@@ -14,8 +14,8 @@ By default, Daily Notes will be created in a file called `yyyy-mm-dd.md` in the
 
 These settings can be overridden in your workspace or global `.vscode/settings.json` file, using the [**dateformat** date masking syntax](https://github.com/felixge/node-dateformat#mask-options):
 
-```json
-  "foam.openDailyNote.directory": "journal",
+```jsonc
+  "foam.openDailyNote.directory": "journal", // a relative directory path will get appended to the workspace root. An absolute directory path will be used unmodified.
   "foam.openDailyNote.filenameFormat": "'daily-note'-yyyy-mm-dd",
   "foam.openDailyNote.fileExtension": "mdx",
   "foam.openDailyNote.titleFormat": "'Journal Entry, ' dddd, mmmm d",
diff --git a/packages/foam-core/src/common/uri.ts b/packages/foam-core/src/common/uri.ts
index de6b836b..27e7d4bb 100644
--- a/packages/foam-core/src/common/uri.ts
+++ b/packages/foam-core/src/common/uri.ts
@@ -452,7 +452,7 @@ interface UriState extends UriComponents {
 
 const _pathSepMarker = isWindows ? 1 : undefined;
 
-// This class exists so that URI is compatibile with vscode.Uri (API).
+// This class exists so that URI is compatible with vscode.Uri (API).
 class Uri extends URI {
   _formatted: string | null = null;
   _fsPath: string | null = null;
diff --git a/packages/foam-vscode/src/dated-notes.test.ts b/packages/foam-vscode/src/dated-notes.test.ts
new file mode 100644
index 00000000..cb979ec7
--- /dev/null
+++ b/packages/foam-vscode/src/dated-notes.test.ts
@@ -0,0 +1,74 @@
+import { workspace } from 'vscode';
+import { getDailyNotePath } from './dated-notes';
+
+describe('getDailyNotePath', () => {
+  test('Adds the root directory to relative directories (Posix paths)', async () => {
+    const date = new Date('2021-02-07T00:00:00Z');
+    const year = date.getFullYear();
+    const month = date.getMonth() + 1;
+    const day = date.getDate();
+    const isoDate = `${year}-0${month}-0${day}`;
+
+    await workspace
+      .getConfiguration('foam')
+      .update('openDailyNote.directory', 'journal/subdir');
+    const foamConfiguration = workspace.getConfiguration('foam');
+    expect(getDailyNotePath(foamConfiguration, date).path).toMatch(
+      new RegExp(`journal[\\\\/]subdir[\\\\/]${isoDate}.md$`)
+    );
+  });
+
+  test('Uses absolute directories without modification (Posix paths)', async () => {
+    const date = new Date('2021-02-07T00:00:00Z');
+    const year = date.getFullYear();
+    const month = date.getMonth() + 1;
+    const day = date.getDate();
+    const isoDate = `${year}-0${month}-0${day}`;
+
+    await workspace
+      .getConfiguration('foam')
+      .update('openDailyNote.directory', '/absolute_path/journal');
+    const foamConfiguration = workspace.getConfiguration('foam');
+    expect(getDailyNotePath(foamConfiguration, date).path).toMatch(
+      new RegExp(`^/absolute_path/journal/${isoDate}.md`)
+    );
+  });
+
+  test('Adds the root directory to relative directories (Windows paths)', async () => {
+    const date = new Date('2021-02-07T00:00:00Z');
+    const year = date.getFullYear();
+    const month = date.getMonth() + 1;
+    const day = date.getDate();
+    const isoDate = `${year}-0${month}-0${day}`;
+
+    await workspace
+      .getConfiguration('foam')
+      .update('openDailyNote.directory', 'journal\\subdir');
+    const foamConfiguration = workspace.getConfiguration('foam');
+    expect(getDailyNotePath(foamConfiguration, date).path).toMatch(
+      new RegExp(`journal[\\\\/]subdir[\\\\/]${isoDate}.md$`)
+    );
+  });
+
+  test('Uses absolute directories without modification (Windows paths)', async () => {
+    // While technically the test passes on all OS's, it's only because the test is overly loose.
+    // On Posix systems, this test actually does modify the path, since Windows style paths are
+    // considered to be relative paths. So while this test passes on Posix systems, it is not
+    // because it treats it as an absolute path, but rather that the test doesn't check the same thing.
+    // This was considered "good enough" instead of introducing a dependency like `skip-if` to skip the
+    // test on Posix systems.
+    const date = new Date('2021-02-07T00:00:00Z');
+    const year = date.getFullYear();
+    const month = date.getMonth() + 1;
+    const day = date.getDate();
+    const isoDate = `${year}-0${month}-0${day}`;
+
+    await workspace
+      .getConfiguration('foam')
+      .update('openDailyNote.directory', 'C:\\absolute_path\\journal');
+    const foamConfiguration = workspace.getConfiguration('foam');
+    expect(getDailyNotePath(foamConfiguration, date).path).toMatch(
+      new RegExp(`/C:[\\\\/]absolute_path[\\\\/]journal[\\\\/]${isoDate}.md`)
+    );
+  });
+});
diff --git a/packages/foam-vscode/src/dated-notes.ts b/packages/foam-vscode/src/dated-notes.ts
index 2d4f4d88..60ab6d7b 100644
--- a/packages/foam-vscode/src/dated-notes.ts
+++ b/packages/foam-vscode/src/dated-notes.ts
@@ -1,8 +1,9 @@
 import { workspace, WorkspaceConfiguration } from 'vscode';
-import { dirname, join } from 'path';
 import dateFormat from 'dateformat';
 import * as fs from 'fs';
-import { docConfig, focusNote, pathExists } from './utils';
+import { isAbsolute } from 'path';
+import { docConfig, focusNote, getDirname, pathExists } from './utils';
+import { URI } from 'foam-core';
 
 async function openDailyNoteFor(date?: Date) {
   const foamConfiguration = workspace.getConfiguration('foam');
@@ -17,13 +18,24 @@ async function openDailyNoteFor(date?: Date) {
   );
   await focusNote(dailyNotePath, isNew);
 }
-function getDailyNotePath(configuration: WorkspaceConfiguration, date: Date) {
-  const rootDirectory = workspace.workspaceFolders[0].uri.fsPath;
+
+function getDailyNotePath(
+  configuration: WorkspaceConfiguration,
+  date: Date
+): URI {
   const dailyNoteDirectory: string =
     configuration.get('openDailyNote.directory') ?? '.';
   const dailyNoteFilename = getDailyNoteFileName(configuration, date);
 
-  return join(rootDirectory, dailyNoteDirectory, dailyNoteFilename);
+  if (isAbsolute(dailyNoteDirectory)) {
+    return URI.joinPath(URI.file(dailyNoteDirectory), dailyNoteFilename);
+  } else {
+    return URI.joinPath(
+      workspace.workspaceFolders[0].uri,
+      dailyNoteDirectory,
+      dailyNoteFilename
+    );
+  }
 }
 
 function getDailyNoteFileName(
@@ -42,7 +54,7 @@ function getDailyNoteFileName(
 
 async function createDailyNoteIfNotExists(
   configuration: WorkspaceConfiguration,
-  dailyNotePath: string,
+  dailyNotePath: URI,
   currentDate: Date
 ) {
   if (await pathExists(dailyNotePath)) {
@@ -56,7 +68,7 @@ async function createDailyNoteIfNotExists(
     configuration.get('openDailyNote.filenameFormat');
 
   await fs.promises.writeFile(
-    dailyNotePath,
+    dailyNotePath.fsPath,
     `# ${dateFormat(currentDate, titleFormat, false)}${docConfig.eol}${
       docConfig.eol
     }`
@@ -65,11 +77,11 @@ async function createDailyNoteIfNotExists(
   return true;
 }
 
-async function createDailyNoteDirectoryIfNotExists(dailyNotePath: string) {
-  const dailyNoteDirectory = dirname(dailyNotePath);
+async function createDailyNoteDirectoryIfNotExists(dailyNotePath: URI) {
+  const dailyNoteDirectory = getDirname(dailyNotePath);
 
   if (!(await pathExists(dailyNoteDirectory))) {
-    await fs.promises.mkdir(dailyNoteDirectory, { recursive: true });
+    await fs.promises.mkdir(dailyNoteDirectory.fsPath, { recursive: true });
   }
 }
 
diff --git a/packages/foam-vscode/src/features/create-from-template.ts b/packages/foam-vscode/src/features/create-from-template.ts
index facaceef..985d53cc 100644
--- a/packages/foam-vscode/src/features/create-from-template.ts
+++ b/packages/foam-vscode/src/features/create-from-template.ts
@@ -91,11 +91,9 @@ async function createNoteFromTemplate(): Promise<void> {
     URI.joinPath(templatesDir, selectedTemplate)
   );
   const snippet = new SnippetString(templateText.toString());
-  await workspace.fs.writeFile(
-    URI.file(filename),
-    new TextEncoder().encode('')
-  );
-  await focusNote(filename, true);
+  const filenameURI = URI.file(filename);
+  await workspace.fs.writeFile(filenameURI, new TextEncoder().encode(''));
+  await focusNote(filenameURI, true);
   await window.activeTextEditor.insertSnippet(snippet);
 }
 
@@ -125,11 +123,12 @@ async function createNewTemplate(): Promise<void> {
     return;
   }
 
+  const filenameURI = URI.file(filename);
   await workspace.fs.writeFile(
-    URI.file(filename),
+    filenameURI,
     new TextEncoder().encode(templateContent)
   );
-  await focusNote(filename, false);
+  await focusNote(filenameURI, false);
 }
 
 const feature: FoamFeature = {
diff --git a/packages/foam-vscode/src/features/open-random-note.ts b/packages/foam-vscode/src/features/open-random-note.ts
index 271074fe..d87b4435 100644
--- a/packages/foam-vscode/src/features/open-random-note.ts
+++ b/packages/foam-vscode/src/features/open-random-note.ts
@@ -22,7 +22,7 @@ const feature: FoamFeature = {
           randomNoteIndex = (randomNoteIndex + 1) % notes.length;
         }
 
-        focusNote(notes[randomNoteIndex].uri.path, false);
+        focusNote(notes[randomNoteIndex].uri, false);
       })
     );
   },
diff --git a/packages/foam-vscode/src/test/suite.ts b/packages/foam-vscode/src/test/suite.ts
index cf2d2322..c09b6989 100644
--- a/packages/foam-vscode/src/test/suite.ts
+++ b/packages/foam-vscode/src/test/suite.ts
@@ -3,7 +3,7 @@
  * We use the following convention in Foam:
  * - *.test.ts are unit tests
  *   they might still rely on vscode API and hence will be run in this environment, but
- *   are fundamentally about testing functions in isolations
+ *   are fundamentally about testing functions in isolation
  * - *.spec.ts are integration tests
  *   they will make direct use of the vscode API to be invoked as commands, create editors,
  *   and so on..
diff --git a/packages/foam-vscode/src/utils.ts b/packages/foam-vscode/src/utils.ts
index 0b33dcff..69838f15 100644
--- a/packages/foam-vscode/src/utils.ts
+++ b/packages/foam-vscode/src/utils.ts
@@ -6,7 +6,6 @@ import {
   Position,
   TextEditor,
   workspace,
-  Uri,
   Selection,
   MarkdownString,
   version,
@@ -15,6 +14,8 @@ import * as fs from 'fs';
 import { Logger, Resource, Note } from 'foam-core';
 import matter from 'gray-matter';
 import removeMarkdown from 'remove-markdown';
+import { URI } from 'foam-core';
+import { posix } from 'path';
 
 interface Point {
   line: number;
@@ -144,14 +145,23 @@ export function toTitleCase(word: string): string {
     .join(' ');
 }
 
+/**
+ * Get a URI that represents the dirname of a URI
+ *
+ * @param uri The URI to get the dirname from
+ */
+export function getDirname(uri: URI): URI {
+  return URI.file(posix.parse(uri.path).dir);
+}
+
 /**
  * Verify the given path exists in the file system
  *
  * @param path The path to verify
  */
-export function pathExists(path: string) {
+export function pathExists(path: URI) {
   return fs.promises
-    .access(path, fs.constants.F_OK)
+    .access(path.fsPath, fs.constants.F_OK)
     .then(() => true)
     .catch(() => false);
 }
@@ -179,8 +189,8 @@ export function isNone<T>(
   return value == null; // eslint-disable-line
 }
 
-export async function focusNote(notePath: string, moveCursorToEnd: boolean) {
-  const document = await workspace.openTextDocument(Uri.file(notePath));
+export async function focusNote(notePath: URI, moveCursorToEnd: boolean) {
+  const document = await workspace.openTextDocument(notePath);
   const editor = await window.showTextDocument(document);
 
   // Move the cursor to end of the file