diff --git a/cmd/task/task.go b/cmd/task/task.go
index b424bfacd7..2c33fc4a80 100644
--- a/cmd/task/task.go
+++ b/cmd/task/task.go
@@ -5,7 +5,6 @@ import (
 	"fmt"
 	"log"
 	"os"
-	"path/filepath"
 	"strings"
 	"time"
 
@@ -202,10 +201,6 @@ func run() error {
 	if flags.dir != "" && flags.entrypoint != "" {
 		return errors.New("task: You can't set both --dir and --taskfile")
 	}
-	if flags.entrypoint != "" {
-		flags.dir = filepath.Dir(flags.entrypoint)
-		flags.entrypoint = filepath.Base(flags.entrypoint)
-	}
 
 	if flags.output.Name != "group" {
 		if flags.output.Group.Begin != "" {
diff --git a/setup.go b/setup.go
index c3430e7770..73fb2fe95d 100644
--- a/setup.go
+++ b/setup.go
@@ -55,8 +55,17 @@ func (e *Executor) Setup() error {
 }
 
 func (e *Executor) setCurrentDir() error {
-	// If the entrypoint is already set, we don't need to do anything
-	if e.Entrypoint != "" {
+	if e.Entrypoint != "" && e.Dir != "" {
+		return errors.New("cannot set both entrypoint and dir")
+	}
+
+	// Remove the file protocol prefix if it exists
+	e.Entrypoint = strings.TrimPrefix(e.Entrypoint, "file://")
+
+	// If the entrypoint is already set and isn't a remote file
+	if e.Entrypoint != "" && !strings.Contains(e.Entrypoint, "://") {
+		e.Dir = filepath.Dir(e.Entrypoint)
+		e.Entrypoint = filepath.Base(e.Entrypoint)
 		return nil
 	}
 
diff --git a/task_test.go b/task_test.go
index 8370afce59..48f4f24e64 100644
--- a/task_test.go
+++ b/task_test.go
@@ -56,7 +56,7 @@ func (fct fileContentTest) Run(t *testing.T) {
 
 	for name, expectContent := range fct.Files {
 		t.Run(fct.name(name), func(t *testing.T) {
-			path := filepathext.SmartJoin(fct.Dir, name)
+			path := filepathext.SmartJoin(e.Dir, name)
 			b, err := os.ReadFile(path)
 			require.NoError(t, err, "Error reading file")
 			s := string(b)
@@ -1162,8 +1162,7 @@ func TestIncludesOptionalExplicitFalse(t *testing.T) {
 
 func TestIncludesFromCustomTaskfile(t *testing.T) {
 	tt := fileContentTest{
-		Dir:        "testdata/includes_yaml",
-		Entrypoint: "Custom.ext",
+		Entrypoint: "testdata/includes_yaml/Custom.ext",
 		Target:     "default",
 		TrimSpace:  true,
 		Files: map[string]string{
@@ -1525,16 +1524,12 @@ func TestDotenvShouldIncludeAllEnvFiles(t *testing.T) {
 }
 
 func TestDotenvShouldErrorWhenIncludingDependantDotenvs(t *testing.T) {
-	const dir = "testdata/dotenv/error_included_envs"
-	const entry = "Taskfile.yml"
-
 	var buff bytes.Buffer
 	e := task.Executor{
-		Dir:        dir,
-		Entrypoint: entry,
-		Summary:    true,
-		Stdout:     &buff,
-		Stderr:     &buff,
+		Dir:     "testdata/dotenv/error_included_envs",
+		Summary: true,
+		Stdout:  &buff,
+		Stderr:  &buff,
 	}
 
 	err := e.Setup()