diff --git a/api/internal/target/kusttarget.go b/api/internal/target/kusttarget.go
index 18a38f3c48..046ed27a17 100644
--- a/api/internal/target/kusttarget.go
+++ b/api/internal/target/kusttarget.go
@@ -21,6 +21,7 @@ import (
 	"sigs.k8s.io/kustomize/api/resmap"
 	"sigs.k8s.io/kustomize/api/resource"
 	"sigs.k8s.io/kustomize/api/types"
+	"sigs.k8s.io/kustomize/kyaml/kio/kioutil"
 	"sigs.k8s.io/kustomize/kyaml/openapi"
 	"sigs.k8s.io/yaml"
 )
@@ -262,7 +263,12 @@ func (kt *KustTarget) configureExternalGenerators() ([]resmap.Generator, error)
 	if err != nil {
 		return nil, err
 	}
-	return kt.pLdr.LoadGenerators(kt.ldr, kt.validator, ra.ResMap())
+	m := ra.ResMap()
+	err = m.AnnotateAll(kioutil.PathAnnotation, kt.ldr.Root())
+	if err != nil {
+		return nil, err
+	}
+	return kt.pLdr.LoadGenerators(kt.ldr, kt.validator, m)
 }
 
 func (kt *KustTarget) runTransformers(ra *accumulator.ResAccumulator) error {
diff --git a/api/krusty/fnplugin_test.go b/api/krusty/fnplugin_test.go
index eca491056b..554b5637f9 100644
--- a/api/krusty/fnplugin_test.go
+++ b/api/krusty/fnplugin_test.go
@@ -1,10 +1,16 @@
 package krusty_test
 
 import (
+	"os"
 	"os/exec"
+	"path/filepath"
 	"testing"
 
+	"github.com/stretchr/testify/assert"
+	"sigs.k8s.io/kustomize/api/internal/utils"
+	"sigs.k8s.io/kustomize/api/krusty"
 	kusttest_test "sigs.k8s.io/kustomize/api/testutils/kusttest"
+	"sigs.k8s.io/kustomize/kyaml/filesys"
 )
 
 func TestFnExecGenerator(t *testing.T) {
@@ -82,6 +88,125 @@ spec:
 `)
 }
 
+func TestFnExecGeneratorWithOverlay(t *testing.T) {
+	fSys := filesys.MakeFsOnDisk()
+	th := kusttest_test.MakeHarness(t)
+	o := th.MakeOptionsPluginsEnabled()
+	o.PluginConfig.FnpLoadingOptions.EnableExec = true
+	b := krusty.MakeKustomizer(&o)
+
+	tmpDir, err := filesys.NewTmpConfirmedDir()
+	assert.NoError(t, err)
+	base := filepath.Join(tmpDir.String(), "base")
+	prod := filepath.Join(tmpDir.String(), "prod")
+	assert.NoError(t, fSys.Mkdir(base))
+	assert.NoError(t, fSys.Mkdir(prod))
+	assert.NoError(t, fSys.WriteFile(filepath.Join(base, "kustomization.yaml"), []byte(`
+resources:
+- short_secret.yaml
+generators:
+- gener.yaml
+`)))
+	assert.NoError(t, fSys.WriteFile(filepath.Join(prod, "kustomization.yaml"), []byte(`
+resources:
+- ../base
+`)))
+	assert.NoError(t, fSys.WriteFile(filepath.Join(base, "short_secret.yaml"), []byte(`
+apiVersion: v1
+kind: Secret
+metadata:
+  labels:
+    airshipit.org/ephemeral-user-data: "true"
+  name: node1-bmc-secret
+type: Opaque
+stringData:
+  userData: |
+    bootcmd:
+    - mkdir /mnt/vda
+`)))
+	assert.NoError(t, fSys.WriteFile(filepath.Join(base, "exec.sh"), []byte(`#!/bin/sh
+
+cat <<EOF
+apiVersion: apps/v1
+kind: Deployment
+metadata:
+  name: nginx
+  labels:
+    app: nginx
+  annotations:
+    tshirt-size: small # this injects the resource reservations
+spec:
+  selector:
+    matchLabels:
+      app: nginx
+  template:
+    metadata:
+      labels:
+        app: nginx
+    spec:
+      containers:
+      - name: nginx
+        image: nginx
+EOF
+`)))
+	assert.NoError(t, os.Chmod(filepath.Join(base, "exec.sh"), 0777))
+	assert.NoError(t, fSys.WriteFile(filepath.Join(base, "gener.yaml"), []byte(`
+kind: executable
+metadata:
+  name: demo
+  annotations:
+    config.kubernetes.io/function: |
+      exec:
+        path: ./exec.sh
+spec:
+`)))
+
+	m, err := b.Run(
+		fSys,
+		prod)
+	if utils.IsErrTimeout(err) {
+		// Don't fail on timeouts.
+		t.SkipNow()
+	}
+	assert.NoError(t, err)
+	yml, err := m.AsYaml()
+	assert.NoError(t, err)
+	assert.Equal(t, `apiVersion: v1
+kind: Secret
+metadata:
+  labels:
+    airshipit.org/ephemeral-user-data: "true"
+  name: node1-bmc-secret
+stringData:
+  userData: |
+    bootcmd:
+    - mkdir /mnt/vda
+type: Opaque
+---
+apiVersion: apps/v1
+kind: Deployment
+metadata:
+  annotations:
+    tshirt-size: small
+  labels:
+    app: nginx
+  name: nginx
+spec:
+  selector:
+    matchLabels:
+      app: nginx
+  template:
+    metadata:
+      labels:
+        app: nginx
+    spec:
+      containers:
+      - image: nginx
+        name: nginx
+`, string(yml))
+	assert.NoError(t, fSys.RemoveAll(tmpDir.String()))
+}
+
 func skipIfNoDocker(t *testing.T) {
 	if _, err := exec.LookPath("docker"); err != nil {
 		t.Skip("skipping because docker binary wasn't found in PATH")
diff --git a/api/resmap/resmap.go b/api/resmap/resmap.go
index 7c0c2ea802..b6b5118bda 100644
--- a/api/resmap/resmap.go
+++ b/api/resmap/resmap.go
@@ -123,6 +123,10 @@ type ResMap interface {
 	// failing on any CurId collision.
 	AppendAll(ResMap) error
 
+	// AnnotateAll annotates all resources in the ResMap with
+	// the provided key value pair.
+	AnnotateAll(key string, value string) error
+
 	// AbsorbAll appends, replaces or merges the contents
 	// of another ResMap into self,
 	// allowing and sometimes demanding ID collisions.
diff --git a/api/resmap/reswrangler.go b/api/resmap/reswrangler.go
index 5bdc5c585e..2c25c65a61 100644
--- a/api/resmap/reswrangler.go
+++ b/api/resmap/reswrangler.go
@@ -88,6 +88,19 @@ func (m *resWrangler) append(res *resource.Resource) {
 	m.rList = append(m.rList, res)
 }
 
+// AnnotateAll implements ResMap
+func (m *resWrangler) AnnotateAll(key string, value string) error {
+	return m.ApplyFilter(annotations.Filter{
+		Annotations: map[string]string{
+			key: value,
+		},
+		FsSlice: []types.FieldSpec{{
+			Path:               "metadata/annotations",
+			CreateIfNotPresent: true,
+		}},
+	})
+}
+
 // Remove implements ResMap.
 func (m *resWrangler) Remove(adios resid.ResId) error {
 	var rList []*resource.Resource
diff --git a/kyaml/fn/runtime/exec/exec.go b/kyaml/fn/runtime/exec/exec.go
index 3346bc998f..fcd53d1512 100644
--- a/kyaml/fn/runtime/exec/exec.go
+++ b/kyaml/fn/runtime/exec/exec.go
@@ -19,6 +19,10 @@ type Filter struct {
 	// Args are the arguments to the executable
 	Args []string `yaml:"args,omitempty"`
 
+	// WorkingDir is the working directory that the executable
+	// should run in
+	WorkingDir string
+
 	runtimeutil.FunctionFilter
 }
 
@@ -28,6 +32,15 @@ func (c *Filter) Filter(nodes []*yaml.RNode) ([]*yaml.RNode, error) {
 }
 
 func (c *Filter) Run(reader io.Reader, writer io.Writer) error {
+	if c.WorkingDir != "" {
+		p, err := os.Getwd()
+		if err != nil {
+			return err
+		}
+		os.Chdir(c.WorkingDir)
+		defer os.Chdir(p)
+	}
+
 	cmd := exec.Command(c.Path, c.Args...)
 	cmd.Stdin = reader
 	cmd.Stdout = writer
diff --git a/kyaml/runfn/runfn.go b/kyaml/runfn/runfn.go
index bfe1ac3f2f..d3dd071d20 100644
--- a/kyaml/runfn/runfn.go
+++ b/kyaml/runfn/runfn.go
@@ -507,7 +507,19 @@ func (r *RunFns) ffp(spec runtimeutil.FunctionSpec, api *yaml.RNode, currentUser
 	}
 
 	if r.EnableExec && spec.Exec.Path != "" {
-		ef := &exec.Filter{Path: spec.Exec.Path}
+		currentDir, err := os.Getwd()
+		if err != nil {
+			return nil, err
+		}
+
+		wd, _, err := kioutil.GetFileAnnotations(api)
+		if err != nil || wd == "" || wd == "/" {
+			wd = currentDir
+		}
+		ef := &exec.Filter{
+			Path: spec.Exec.Path,
+			WorkingDir: wd,
+		}
 
 		ef.FunctionConfig = api
 		ef.GlobalScope = r.GlobalScope