diff --git a/.changeset/shy-hounds-battle.md b/.changeset/shy-hounds-battle.md
new file mode 100644
index 0000000000..11d66e0d94
--- /dev/null
+++ b/.changeset/shy-hounds-battle.md
@@ -0,0 +1,5 @@
+---
+'@backstage/cli': patch
+---
+
+Fix a bug in the backend plugin template that was creating an incorrect link.
diff --git a/packages/cli/templates/default-backend-plugin/README.md.hbs b/packages/cli/templates/default-backend-plugin/README.md.hbs
index e95c626167..48a4ddb848 100644
--- a/packages/cli/templates/default-backend-plugin/README.md.hbs
+++ b/packages/cli/templates/default-backend-plugin/README.md.hbs
@@ -11,4 +11,4 @@ start` in the root directory, and then navigating to [/{{pluginVar}}/health](htt
 
 You can also serve the plugin in isolation by running `yarn start` in the plugin directory.
 This method of serving the plugin provides quicker iteration speed and a faster startup and hot reloads.
-It is only meant for local development, and the setup for it can be found inside the [/dev](/dev) directory.
+It is only meant for local development, and the setup for it can be found inside the [/dev](./dev) directory.