diff --git a/CHANGELOG.md b/CHANGELOG.md
index 1e67f181c69..4a0285e9a29 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -41,6 +41,8 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ## [Unreleased]
 
+- [#765](https://github.com/osmosis-labs/osmosis/pull/765) Fix a bug in `Makefile` regarding the location of localtestnet docker image.
+
 ## Features
 
 - [#741](https://github.com/osmosis-labs/osmosis/pull/741) Allow node operators to set a second min gas price for arbitrage txs.
diff --git a/Makefile b/Makefile
index c159e8c3f3c..f57232bd9b0 100644
--- a/Makefile
+++ b/Makefile
@@ -244,7 +244,7 @@ format:
 ###############################################################################
 
 build-docker-osmosisdnode:
-	$(MAKE) -C networks/local
+	$(MAKE) -C contrib/localtestnet
 
 # Run a 4-node testnet locally
 localnet-start: build-linux build-docker-osmosisdnode # localnet-stop