diff --git a/packages/core-api/src/routing/hooks.test.tsx b/packages/core-api/src/routing/hooks.test.tsx
index 65c7858954..6c38a6e18a 100644
--- a/packages/core-api/src/routing/hooks.test.tsx
+++ b/packages/core-api/src/routing/hooks.test.tsx
@@ -38,6 +38,7 @@ const ref1 = createRouteRef(mockConfig());
 const ref2 = createRouteRef(mockConfig());
 const ref3 = createRouteRef(mockConfig());
 const ref4 = createRouteRef(mockConfig());
+const ref5 = createRouteRef(mockConfig());
 
 const MockRouteSource = (props: {
   name: string;
@@ -47,7 +48,7 @@ const MockRouteSource = (props: {
   const routeFunc = useRouteRef(props.routeRef);
   return (
     <div>
-      Path at {props.name}: {routeFunc?.(props.params)}
+      Path at {props.name}: {routeFunc(props.params)}
     </div>
   );
 };
@@ -64,6 +65,9 @@ const Extension3 = plugin.provide(
 const Extension4 = plugin.provide(
   createRoutableExtension({ component: MockRouteSource, mountPoint: ref4 }),
 );
+const Extension5 = plugin.provide(
+  createRoutableExtension({ component: MockComponent, mountPoint: ref5 }),
+);
 
 describe('discovery', () => {
   it('should handle simple routeRef path creation for routeRefs used in other parts of the app', () => {
@@ -100,7 +104,7 @@ describe('discovery', () => {
 
   it('should handle routeRefs with parameters', () => {
     const root = (
-      <MemoryRouter initialEntries={['/foo/bar/:id']}>
+      <MemoryRouter initialEntries={['/foo/bar/wat']}>
         <Routes>
           <Extension1 path="/foo">
             <Extension4
@@ -141,4 +145,36 @@ describe('discovery', () => {
       rendered.getByText('Path at outside: /foo/bar/blob'),
     ).toBeInTheDocument();
   });
+
+  it('should handle relative routing within parameterized routes', () => {
+    const root = (
+      <MemoryRouter initialEntries={['/foo/blob/bar']}>
+        <Routes>
+          <Extension5 path="/foo/:id">
+            <Extension2 path="/bar" name="inside" routeRef={ref3} />
+            <Extension3 path="/baz" />
+          </Extension5>
+        </Routes>
+      </MemoryRouter>
+    );
+
+    const { routes, routeParents } = traverseElementTree({
+      root,
+      discoverers: [childDiscoverer, routeElementDiscoverer],
+      collectors: {
+        routes: routeCollector,
+        routeParents: routeParentCollector,
+      },
+    });
+
+    const rendered = render(
+      <RoutingProvider routes={routes} routeParents={routeParents}>
+        {root}
+      </RoutingProvider>,
+    );
+
+    expect(
+      rendered.getByText('Path at inside: /foo/blob/baz'),
+    ).toBeInTheDocument();
+  });
 });
diff --git a/packages/core-api/src/routing/hooks.tsx b/packages/core-api/src/routing/hooks.tsx
index 739d74247c..821fd6f9de 100644
--- a/packages/core-api/src/routing/hooks.tsx
+++ b/packages/core-api/src/routing/hooks.tsx
@@ -16,7 +16,7 @@
 
 import React, { createContext, ReactNode, useContext } from 'react';
 import { RouteRef } from './types';
-import { generatePath } from 'react-router-dom';
+import { generatePath, useParams } from 'react-router-dom';
 
 export type RouteFunc = (params?: Record<string, string>) => string;
 
@@ -26,7 +26,7 @@ class RouteResolver {
     private readonly routeParents: Map<RouteRef, RouteRef | undefined>,
   ) {}
 
-  resolve(routeRef: RouteRef): RouteFunc {
+  resolve(routeRef: RouteRef, parentParams: Record<string, string>): RouteFunc {
     let currentRouteRef: RouteRef | undefined = routeRef;
     let fullPath = '';
 
@@ -40,20 +40,21 @@ class RouteResolver {
     }
 
     return (params?: Record<string, string>) => {
-      return generatePath(fullPath, params);
+      return generatePath(fullPath, { ...params, ...parentParams });
     };
   }
 }
 
 const RoutingContext = createContext<RouteResolver | undefined>(undefined);
 
-export function useRouteRef(routeRef: RouteRef): RouteFunc | undefined {
+export function useRouteRef(routeRef: RouteRef): RouteFunc {
   const resolver = useContext(RoutingContext);
+  const params = useParams();
   if (!resolver) {
     throw new Error('No route resolver found in context');
   }
 
-  return resolver.resolve(routeRef);
+  return resolver.resolve(routeRef, params);
 }
 
 type ProviderProps = {