diff --git a/packages/cli/src/commands/create-app/createApp.ts b/packages/cli/src/commands/create-app/createApp.ts
index 219406704d..cb34dc0686 100644
--- a/packages/cli/src/commands/create-app/createApp.ts
+++ b/packages/cli/src/commands/create-app/createApp.ts
@@ -86,26 +86,22 @@ export async function moveApp(
   });
 }
 
-async function addPackageResolutions(rootDir: string, appDir: string) {
-  process.chdir(appDir);
-
-  const packageFileContent = await fs.readFile('package.json', 'utf-8');
+async function addPackageResolutions(appDir: string) {
+  const pkgJsonPath = resolvePath(appDir, 'package.json');
+  const packageFileContent = await fs.readFile(pkgJsonPath, 'utf-8');
   const packageFileJson = JSON.parse(packageFileContent);
 
-  if (packageFileJson.resolutions) {
-    throw new Error('package.json already contains resolutions');
-  }
-  packageFileJson.resolutions = {};
+  packageFileJson.resolutions = packageFileJson.resolutions || {};
 
   const packages = ['cli', 'core', 'test-utils', 'test-utils-core', 'theme'];
 
   for (const pkg of packages) {
     await Task.forItem('adding', `${pkg} link to package.json`, async () => {
-      const pkgPath = require('path').join(rootDir, 'packages', pkg);
+      const pkgPath = paths.resolveOwnRoot('packages', pkg);
       packageFileJson.resolutions[`@backstage/${pkg}`] = `file:${pkgPath}`;
       const newContents = `${JSON.stringify(packageFileJson, null, 2)}\n`;
 
-      await fs.writeFile('package.json', newContents, 'utf-8').catch(error => {
+      await fs.writeFile(pkgJsonPath, newContents, 'utf-8').catch(error => {
         throw new Error(
           `Failed to add resolutions to package.json: ${error.message}`,
         );
@@ -157,10 +153,7 @@ export default async () => {
     // e2e testing needs special treatment
     if (process.env.BACKSTAGE_E2E_CLI_TEST) {
       Task.section('Linking packages locally for e2e tests');
-      const rootDir = process.env.CI
-        ? resolvePath(process.env.GITHUB_WORKSPACE!)
-        : resolvePath(__dirname, '..', '..', '..');
-      await addPackageResolutions(rootDir, appDir);
+      await addPackageResolutions(appDir);
     }
 
     Task.section('Building the app');
diff --git a/packages/cli/src/helpers/paths.ts b/packages/cli/src/helpers/paths.ts
index 173e77e1c5..e7b351ec16 100644
--- a/packages/cli/src/helpers/paths.ts
+++ b/packages/cli/src/helpers/paths.ts
@@ -25,6 +25,9 @@ export type Paths = {
   // Root dir of the cli itself, containing package.json
   ownDir: string;
 
+  // Monorepo root dir of the cli itself. Only accessible when running inside Backstage repo.
+  ownRoot: string;
+
   // The location of the app that the cli is being executed in
   targetDir: string;
 
@@ -34,6 +37,9 @@ export type Paths = {
   // Resolve a path relative to own repo
   resolveOwn: ResolveFunc;
 
+  // Resolve a path relative to own monorepo root. Only accessible when running inside Backstage repo.
+  resolveOwnRoot: ResolveFunc;
+
   // Resolve a path relative to the app
   resolveTarget: ResolveFunc;
 
@@ -91,10 +97,31 @@ export function findOwnDir() {
   return resolvePath(__dirname, path);
 }
 
+// Finds the root of the monorepo that the cli exists in. Only accessible when running inside Backstage repo.
+export function findOwnRootPath(ownDir: string) {
+  const isLocal = fs.pathExistsSync(resolvePath(ownDir, 'src'));
+  if (!isLocal) {
+    throw new Error(
+      'Tried to access monorepo package root dir outside of Backstage repository',
+    );
+  }
+
+  return resolvePath(ownDir, '../..');
+}
+
 export function findPaths(): Paths {
   const ownDir = findOwnDir();
   const targetDir = fs.realpathSync(process.cwd());
 
+  // Lazy load this as it will throw an error if we're not inside the Backstage repo.
+  let ownRoot = '';
+  const getOwnRoot = () => {
+    if (!ownRoot) {
+      ownRoot = findOwnRootPath(ownDir);
+    }
+    return ownRoot;
+  };
+
   // We're not always running in a monorepo, so we lazy init this to only crash commands
   // that require a monorepo when we're not in one.
   let targetRoot = '';
@@ -107,11 +134,15 @@ export function findPaths(): Paths {
 
   return {
     ownDir,
+    get ownRoot() {
+      return getOwnRoot();
+    },
     targetDir,
     get targetRoot() {
       return getTargetRoot();
     },
     resolveOwn: (...paths) => resolvePath(ownDir, ...paths),
+    resolveOwnRoot: (...paths) => resolvePath(getOwnRoot(), ...paths),
     resolveTarget: (...paths) => resolvePath(targetDir, ...paths),
     resolveTargetRoot: (...paths) => resolvePath(getTargetRoot(), ...paths),
   };