diff --git a/railties/lib/rails/generators/app_base.rb b/railties/lib/rails/generators/app_base.rb
index ea2a64fea2..96cf73c25c 100644
--- a/railties/lib/rails/generators/app_base.rb
+++ b/railties/lib/rails/generators/app_base.rb
@@ -148,7 +148,7 @@ module Rails
           when /^https?:\/\//
             options[:template]
           when String
-            File.expand_path(options[:template], Dir.pwd)
+            File.expand_path(`echo #{options[:template]}`.strip)
           else
             options[:template]
           end
diff --git a/railties/test/generators/app_generator_test.rb b/railties/test/generators/app_generator_test.rb
index 4100973e60..4ec3bf9101 100644
--- a/railties/test/generators/app_generator_test.rb
+++ b/railties/test/generators/app_generator_test.rb
@@ -720,6 +720,25 @@ class AppGeneratorTest < Rails::Generators::TestCase
     assert_match(/It works from file!/, run_generator([destination_root, "-m", "lib/template.rb"]))
   end
 
+  def test_template_from_url
+    url = "https://raw.githubusercontent.com/rails/rails/f95c0b7e96/railties/test/fixtures/lib/template.rb"
+    FileUtils.cd(Rails.root)
+    assert_match(/It works from file!/, run_generator([destination_root, "-m", url]))
+  end
+
+  def test_template_from_abs_path
+    absolute_path = File.expand_path(Rails.root, "fixtures")
+    FileUtils.cd(Rails.root)
+    assert_match(/It works from file!/, run_generator([destination_root, "-m", "#{absolute_path}/lib/template.rb"]))
+  end
+
+  def test_template_from_env_var_path
+    ENV["FIXTURES_HOME"] = File.expand_path(Rails.root, "fixtures")
+    FileUtils.cd(Rails.root)
+    assert_match(/It works from file!/, run_generator([destination_root, "-m", "$FIXTURES_HOME/lib/template.rb"]))
+    ENV.delete("FIXTURES_HOME")
+  end
+
   def test_usage_read_from_file
     assert_called(File, :read, returns: "USAGE FROM FILE") do
       assert_equal "USAGE FROM FILE", Rails::Generators::AppGenerator.desc