diff --git a/.github/workflows/test.yml b/.github/workflows/test.yml
index 444d08d..f890573 100644
--- a/.github/workflows/test.yml
+++ b/.github/workflows/test.yml
@@ -60,6 +60,22 @@ jobs:
             './**/*.html'
             './**/*.rst'
 
+      - name: test working directory functionality
+        uses: ./
+        with:
+          workingDirectory: fixtures/subdir
+          args: --dump-inputs '*'
+          output: ${{ github.workspace }}/working_dir_inputs.txt
+
+      - name: test working directory output
+        run: |
+          line_count=$(wc -l < ${{ github.workspace }}/working_dir_inputs.txt)
+          if ! grep -q "test-working-dir.md" ${{ github.workspace }}/working_dir_inputs.txt || [ "$line_count" -ne 2 ]; then
+            echo "Working directory test failed. Output:"
+            cat ${{ github.workspace }}/working_dir_inputs.txt
+            exit 1
+          fi
+
       - name: test custom output relative path - creation
         uses: ./
         with:
diff --git a/README.md b/README.md
index fd4bff9..d5b0d06 100644
--- a/README.md
+++ b/README.md
@@ -54,17 +54,18 @@ lychee arguments can be passed to the action via the `args` parameter.
 
 On top of that, the action also supports some additional arguments.
 
-| Argument      | Examples                | Description                                                                     |
-| ------------- | ----------------------- | ------------------------------------------------------------------------------- |
-| args          | `--cache`, `--insecure` | See [lychee's documentation][lychee-args] for all arguments and values          |
-| debug         | `false`                 | Enable debug output in action (set -x). Helpful for troubleshooting             |
-| fail          | `false`                 | Fail workflow run on error (i.e. when [lychee exit code][lychee-exit] is not 0) |
-| failIfEmpty   | `false`                 | Fail entire pipeline if no links were found                                     |
-| format        | `markdown`, `json`      | Summary output format                                                           |
-| jobSummary    | `false`                 | Write GitHub job summary (on Markdown output only)                              |
-| lycheeVersion | `v0.15.0`, `nightly`    | Overwrite the lychee version to be used                                         |
-| output        | `lychee/results.md`     | Summary output file path                                                        |
-| token         | `""`                    | Custom GitHub token to use for API calls                                        |
+| Argument         | Examples                | Description                                                                             |
+| ---------------- | ----------------------- | --------------------------------------------------------------------------------------- |
+| args             | `--cache`, `--insecure` | See [lychee's documentation][lychee-args] for all arguments and values                  |
+| debug            | `false`                 | Enable debug output in action (set -x). Helpful for troubleshooting                     |
+| fail             | `false`                 | Fail workflow run on error (i.e. when [lychee exit code][lychee-exit] is not 0)         |
+| failIfEmpty      | `false`                 | Fail entire pipeline if no links were found                                             |
+| format           | `markdown`, `json`      | Summary output format                                                                   |
+| jobSummary       | `false`                 | Write GitHub job summary (on Markdown output only)                                      |
+| lycheeVersion    | `v0.15.0`, `nightly`    | Overwrite the lychee version to be used                                                 |
+| output           | `lychee/results.md`     | Summary output file path                                                                |
+| token            | `""`                    | Custom GitHub token to use for API calls                                                |
+| workingDirectory | `.`, `path/to/subdir/`  | Custom working directory to run lychee in. This affects where `output.md` gets created. |
 
 See [action.yml](./action.yml) for a full list of supported arguments and their default values.
 
@@ -86,6 +87,9 @@ Here is how to pass the arguments.
     token: ${{ secrets.CUSTOM_TOKEN }}
     # Don't fail action on broken links
     fail: false
+    # Run lychee in a different directory.
+    # Note: This changes the lychee output directory as well.
+    workingDirectory: website/subdir
 ```
 
 (If you need a token that requires permissions that aren't available in the
@@ -144,6 +148,8 @@ If you need more control over when caches are restored and saved, you can split
 Add a `.lycheeignore` file to the root of your repository to exclude links from
 getting checked. It supports regular expressions. One expression per line.
 
+You can also put your `.lycheeignore` into a subdirectory if you set that as the `workingDirectory`.
+
 ## Fancy badge
 
 Pro tip: You can add a little badge to your repo to show the status of your
diff --git a/action.yml b/action.yml
index 90a7bb4..b706f73 100644
--- a/action.yml
+++ b/action.yml
@@ -42,6 +42,10 @@ inputs:
     description: "Your GitHub Access Token, defaults to: {{ github.token }}"
     default: ${{ github.token }}
     required: false
+  workingDirectory:
+    description: "Directory to run lychee in"
+    default: "."
+    required: false
 
 outputs:
   exit_code:
@@ -111,6 +115,7 @@ runs:
 
     - name: Run Lychee
       id: run-lychee
+      working-directory: ${{ inputs.workingDirectory }}
       run: ${{ github.action_path }}/entrypoint.sh
       env:
         # https://github.com/actions/runner/issues/665
diff --git a/fixtures/subdir/test-working-dir.md b/fixtures/subdir/test-working-dir.md
new file mode 100644
index 0000000..9020297
--- /dev/null
+++ b/fixtures/subdir/test-working-dir.md
@@ -0,0 +1 @@
+# Test File with [Link](https://lychee.cli.rs/)