diff --git a/extensions/markdown-language-features/src/languageFeatures/rename.ts b/extensions/markdown-language-features/src/languageFeatures/rename.ts
index 55a723d8db4..716f8e41651 100644
--- a/extensions/markdown-language-features/src/languageFeatures/rename.ts
+++ b/extensions/markdown-language-features/src/languageFeatures/rename.ts
@@ -2,15 +2,16 @@
  *  Copyright (c) Microsoft Corporation. All rights reserved.
  *  Licensed under the MIT License. See License.txt in the project root for license information.
  *--------------------------------------------------------------------------------------------*/
+import * as path from 'path';
 import * as vscode from 'vscode';
 import * as nls from 'vscode-nls';
+import * as URI from 'vscode-uri';
 import { Slugifier } from '../slugify';
 import { Disposable } from '../util/dispose';
 import { resolveDocumentLink } from '../util/openDocumentLink';
 import { MdWorkspaceContents, SkinnyTextDocument } from '../workspaceContents';
 import { InternalHref } from './documentLinkProvider';
 import { MdHeaderReference, MdLinkReference, MdReference, MdReferencesProvider, tryFindMdDocumentForLink } from './references';
-import * as URI from 'vscode-uri';
 
 const localize = nls.loadMessageBundle();
 
@@ -147,25 +148,37 @@ export class MdRenameProvider extends Disposable implements vscode.RenameProvide
 		const targetDoc = await tryFindMdDocumentForLink(triggerHref, this.workspaceContents);
 		const targetUri = targetDoc?.uri ?? triggerHref.path;
 
-		let newFilePath = resolveDocumentLink(newName, triggerHref.path);
-		if (!URI.Utils.extname(newFilePath)) {
+		let rawNewFilePath = resolveDocumentLink(newName, triggerHref.path);
+		let resolvedNewFilePath = rawNewFilePath;
+		if (!URI.Utils.extname(resolvedNewFilePath)) {
 			// If the newly entered path doesn't have a file extension but the original file did
 			// tack on a .md file extension
 			if (URI.Utils.extname(targetUri)) {
-				newFilePath = newFilePath.with({
-					path: newFilePath.path + '.md'
+				resolvedNewFilePath = resolvedNewFilePath.with({
+					path: resolvedNewFilePath.path + '.md'
 				});
 			}
 		}
 
 		// First rename the file
-		fileRenames.push({ from: targetUri.toString(), to: newFilePath.toString() });
-		edit.renameFile(targetUri, newFilePath);
+		fileRenames.push({ from: targetUri.toString(), to: resolvedNewFilePath.toString() });
+		edit.renameFile(targetUri, resolvedNewFilePath);
 
 		// Then update all refs to it
 		for (const ref of allRefsInfo.references) {
 			if (ref.kind === 'link') {
-				edit.replace(ref.link.source.resource, this.getFilePathRange(ref), encodeURI(newName));
+				// Try to preserve style of existing links
+				let newPath: string;
+				if (ref.link.source.text.startsWith('/')) {
+					const root = resolveDocumentLink('/', ref.link.source.resource);
+					newPath = '/' + path.relative(root.toString(true), rawNewFilePath.toString(true));
+				} else {
+					newPath = path.relative(URI.Utils.dirname(ref.link.source.resource).toString(true), rawNewFilePath.toString(true));
+					if (newName.startsWith('./') && !newPath.startsWith('../')) {
+						newPath = './' + newPath;
+					}
+				}
+				edit.replace(ref.link.source.resource, this.getFilePathRange(ref), encodeURI(newPath));
 			}
 		}
 
diff --git a/extensions/markdown-language-features/src/test/rename.test.ts b/extensions/markdown-language-features/src/test/rename.test.ts
index 8ad8672edc8..e24405012af 100644
--- a/extensions/markdown-language-features/src/test/rename.test.ts
+++ b/extensions/markdown-language-features/src/test/rename.test.ts
@@ -473,15 +473,53 @@ suite('markdown: rename', () => {
 		const edit = await getRenameEdits(doc, new vscode.Position(0, 10), '/new File', new InMemoryWorkspaceMarkdownDocuments([doc]));
 		assertEditsEqual(edit!, {
 			originalUri: uri,
-			newUri: workspacePath('new File.md'),
+			newUri: workspacePath('new File.md'), // Rename on disk should use file extension
 		}, {
 			uri: uri, edits: [
-				new vscode.TextEdit(new vscode.Range(0, 7, 0, 11), '/new%20File'),
+				new vscode.TextEdit(new vscode.Range(0, 7, 0, 11), '/new%20File'), // Links should continue to use extension-less paths
 				new vscode.TextEdit(new vscode.Range(1, 7, 1, 11), '/new%20File'),
 			]
 		});
 	});
 
+	test('Path rename should use correctly resolved paths across files', async () => {
+		const uri1 = workspacePath('sub', 'doc.md');
+		const doc1 = new InMemoryDocument(uri1, joinLines(
+			`[text](./doc.md)`,
+		));
+
+		const uri2 = workspacePath('doc2.md');
+		const doc2 = new InMemoryDocument(uri2, joinLines(
+			`[text](./sub/doc.md)`,
+		));
+
+		const uri3 = workspacePath('sub2', 'doc3.md');
+		const doc3 = new InMemoryDocument(uri3, joinLines(
+			`[text](../sub/doc.md)`,
+		));
+
+		const uri4 = workspacePath('sub2', 'doc4.md');
+		const doc4 = new InMemoryDocument(uri4, joinLines(
+			`[text](/sub/doc.md)`,
+		));
+
+		const edit = await getRenameEdits(doc1, new vscode.Position(0, 10), './new/new-doc.md', new InMemoryWorkspaceMarkdownDocuments([
+			doc1, doc2, doc3, doc4,
+		]));
+		assertEditsEqual(edit!, {
+			originalUri: uri1,
+			newUri: workspacePath('sub', 'new', 'new-doc.md'),
+		}, {
+			uri: uri1, edits: [new vscode.TextEdit(new vscode.Range(0, 7, 0, 15), './new/new-doc.md')]
+		}, {
+			uri: uri2, edits: [new vscode.TextEdit(new vscode.Range(0, 7, 0, 19), './sub/new/new-doc.md')]
+		}, {
+			uri: uri3, edits: [new vscode.TextEdit(new vscode.Range(0, 7, 0, 20), '../sub/new/new-doc.md')]
+		}, {
+			uri: uri4, edits: [new vscode.TextEdit(new vscode.Range(0, 7, 0, 18), '/sub/new/new-doc.md')]
+		});
+	});
+
 	test('Rename on link should use header text as placeholder', async () => {
 		const uri = workspacePath('doc.md');
 		const doc = new InMemoryDocument(uri, joinLines(