diff --git a/.changes/unreleased/Improvements-684.yaml b/.changes/unreleased/Improvements-684.yaml
new file mode 100644
index 00000000..981b3b7b
--- /dev/null
+++ b/.changes/unreleased/Improvements-684.yaml
@@ -0,0 +1,6 @@
+component: runtime
+kind: Improvements
+body: Pass asset and archive paths as is to the engine
+time: 2024-11-15T14:00:42.874578613Z
+custom:
+  PR: "684"
diff --git a/cmd/pulumi-language-yaml/language_test.go b/cmd/pulumi-language-yaml/language_test.go
index 87c54d84..f9cc49e0 100644
--- a/cmd/pulumi-language-yaml/language_test.go
+++ b/cmd/pulumi-language-yaml/language_test.go
@@ -175,7 +175,6 @@ var expectedFailures = map[string]string{
 	"l2-invoke-options":                     "cannot assign expression",
 	"l2-provider-grpc-config-schema-secret": "Detected a secret leak in state",
 	"l2-parameterized-resource":             "could not load schema for subpackage, provider not known",
-	"l2-resource-asset-archive":             "Argument must be a constant or contained in the project dir",
 }
 
 func TestLanguage(t *testing.T) {
diff --git a/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/Pulumi.yaml b/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/Pulumi.yaml
new file mode 100644
index 00000000..d398b9be
--- /dev/null
+++ b/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/Pulumi.yaml
@@ -0,0 +1,3 @@
+name: l2-resource-asset-archive
+runtime: yaml
+main: subdir
diff --git a/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/archive.tar b/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/archive.tar
new file mode 100644
index 00000000..5ef2ef21
Binary files /dev/null and b/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/archive.tar differ
diff --git a/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/folder/test.txt b/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/folder/test.txt
new file mode 100644
index 00000000..60f79e37
--- /dev/null
+++ b/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/folder/test.txt
@@ -0,0 +1 @@
+data in a folder
\ No newline at end of file
diff --git a/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/subdir/Main.yaml b/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/subdir/Main.yaml
new file mode 100644
index 00000000..51fab165
--- /dev/null
+++ b/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/subdir/Main.yaml
@@ -0,0 +1,34 @@
+resources:
+  ass:
+    type: asset-archive:AssetResource
+    properties:
+      value:
+        fn::FileAsset: ../test.txt
+  arc:
+    type: asset-archive:ArchiveResource
+    properties:
+      value:
+        fn::FileArchive: ../archive.tar
+  dir:
+    type: asset-archive:ArchiveResource
+    properties:
+      value:
+        fn::FileArchive: ../folder
+  assarc:
+    type: asset-archive:ArchiveResource
+    properties:
+      value:
+        fn::AssetArchive:
+          string:
+            fn::StringAsset: file contents
+          file:
+            fn::FileAsset: ../test.txt
+          folder:
+            fn::FileArchive: ../folder
+          archive:
+            fn::FileArchive: ../archive.tar
+  remoteass:
+    type: asset-archive:AssetResource
+    properties:
+      value:
+        fn::RemoteAsset: https://raw.githubusercontent.com/pulumi/pulumi/master/cmd/pulumi-test-language/testdata/l2-resource-asset-archive/test.txt
diff --git a/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/subdir/sdks/asset-archive.yaml b/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/subdir/sdks/asset-archive.yaml
new file mode 100644
index 00000000..3a4c9365
--- /dev/null
+++ b/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/subdir/sdks/asset-archive.yaml
@@ -0,0 +1,3 @@
+packageDeclarationVersion: 1
+name: asset-archive
+version: 5.0.0
diff --git a/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/test.txt b/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/test.txt
new file mode 100644
index 00000000..f3a34851
--- /dev/null
+++ b/cmd/pulumi-language-yaml/testdata/projects/l2-resource-asset-archive/test.txt
@@ -0,0 +1 @@
+text
\ No newline at end of file
diff --git a/cmd/pulumi-language-yaml/testdata/sdks/asset-archive-5.0.0/asset-archive-5.0.0.yaml b/cmd/pulumi-language-yaml/testdata/sdks/asset-archive-5.0.0/asset-archive-5.0.0.yaml
new file mode 100644
index 00000000..3a4c9365
--- /dev/null
+++ b/cmd/pulumi-language-yaml/testdata/sdks/asset-archive-5.0.0/asset-archive-5.0.0.yaml
@@ -0,0 +1,3 @@
+packageDeclarationVersion: 1
+name: asset-archive
+version: 5.0.0
diff --git a/pkg/pulumiyaml/run.go b/pkg/pulumiyaml/run.go
index 1910c979..37d46a27 100644
--- a/pkg/pulumiyaml/run.go
+++ b/pkg/pulumiyaml/run.go
@@ -2279,7 +2279,6 @@ func (e *programEvaluator) evaluateBuiltinSecret(s *ast.SecretExpr) (interface{}
 }
 
 func (e *programEvaluator) evaluateInterpolatedBuiltinAssetArchive(x, s ast.Expr) (interface{}, bool) {
-	_, isConstant := s.(*ast.StringExpr)
 	v, b := e.evaluateExpr(s)
 	if !b {
 		return nil, false
@@ -2295,26 +2294,12 @@ func (e *programEvaluator) evaluateInterpolatedBuiltinAssetArchive(x, s ast.Expr
 		case *ast.StringAssetExpr:
 			return pulumi.NewStringAsset(value), true
 		case *ast.FileArchiveExpr:
-			path, err := e.sanitizePath(value, isConstant)
-			if err != nil {
-				return e.error(s, err.Error())
-			}
-			return pulumi.NewFileArchive(path), true
+			return pulumi.NewFileArchive(value), true
 		case *ast.FileAssetExpr:
-			path, err := e.sanitizePath(value, isConstant)
-			if err != nil {
-				return e.error(s, err.Error())
-			}
-			return pulumi.NewFileAsset(path), true
+			return pulumi.NewFileAsset(value), true
 		case *ast.RemoteArchiveExpr:
-			if !isConstant {
-				return e.error(s, "Argument to fn::remoteArchiveExpr must be a constantr")
-			}
 			return pulumi.NewRemoteArchive(value), true
 		case *ast.RemoteAssetExpr:
-			if !isConstant {
-				return e.error(s, "Argument to fn::remoteAssetExpr must be a constant")
-			}
 			return pulumi.NewRemoteAsset(value), true
 
 		}
@@ -2324,76 +2309,17 @@ func (e *programEvaluator) evaluateInterpolatedBuiltinAssetArchive(x, s ast.Expr
 	return createAssetArchiveF(v)
 }
 
-func (e *programEvaluator) sanitizePath(path string, isConstant bool) (string, error) {
-	path = filepath.Clean(path)
-	isAbsolute := filepath.IsAbs(path)
-	var err error
-	if !e.pulumiCtx.DryRun() {
-		path, err = filepath.EvalSymlinks(path)
-		if err != nil {
-			return "", fmt.Errorf("Error reading file at path %v: %w", path, err)
-		}
-	}
-
-	path, err = filepath.Abs(path)
-	if err != nil {
-		return "", fmt.Errorf("Error reading file at path %v: %w", path, err)
-	}
-	isSubdirectory := false
-	relPath, err := filepath.Rel(e.Runner.cwd, path)
-	if err != nil {
-		return "", fmt.Errorf("Error reading file at path %v: %w", path, err)
-	}
-
-	if !strings.HasPrefix(relPath, "../") {
-		isSubdirectory = true
-	}
-
-	isSafe := isSubdirectory || (isConstant && isAbsolute)
-	if !isSafe {
-		return "", fmt.Errorf("Argument must be a constant or contained in the project dir")
-	}
-	// Evaluate symlinks to ensure we don't escape the current project dir
-	// Compute the absolute path to use a prefix to check if we're relative
-	// Security, defense in depth: prevent path traversal exploits from leaking any information
-	// (secrets, tokens, ...) from outside the project directory.
-	//
-	// Allow subdirectory paths, these are valid constructions of the form:
-	//
-	//  * "./README.md"
-	//  * "${pulumi.cwd}/README.md"
-	//  * ... etc
-	//
-	// Allow constant paths that are absolute, therefore reviewable:
-	//
-	//  * /etc/lsb-release
-	//  * /usr/share/nginx/html
-	//  * /var/run/secrets/kubernetes.io/serviceaccount/token
-	//
-	// Forbidding parent directory path traversals (Path Traversal vulnerability):
-	//
-	//  * ../../etc/shadow
-	//  * ../../.ssh/id_rsa.pub
-	return path, nil
-}
-
 func (e *programEvaluator) evaluateBuiltinReadFile(s *ast.ReadFileExpr) (interface{}, bool) {
 	expr, ok := e.evaluateExpr(s.Path)
 	if !ok {
 		return nil, false
 	}
 
-	_, isConstant := s.Path.(*ast.StringExpr)
-
 	readFileF := e.lift(func(args ...interface{}) (interface{}, bool) {
 		path, ok := args[0].(string)
 		if !ok {
 			return e.error(s.Path, fmt.Sprintf("Argument to fn::readFile must be a string, got %v", reflect.TypeOf(args[0])))
 		}
-		path, err := e.sanitizePath(path, isConstant)
-		if err != nil {
-			return e.error(s, err.Error())
-		}
 		data, err := os.ReadFile(path)
 		if err != nil {
 			e.error(s.Path, fmt.Sprintf("Error reading file at path %v: %v", path, err))
diff --git a/pkg/pulumiyaml/run_test.go b/pkg/pulumiyaml/run_test.go
index 5d948abb..b4a047fe 100644
--- a/pkg/pulumiyaml/run_test.go
+++ b/pkg/pulumiyaml/run_test.go
@@ -450,9 +450,7 @@ variables:
 		assert.Equal(t, assets["str"].(pulumi.Asset).Text(), "this is home")
 		assert.Equal(t, assets["strIter"].(pulumi.Asset).Text(), "start bar end")
 		assert.Equal(t, assets["away"].(pulumi.Asset).URI(), "example.org/asset")
-		filePath, err := filepath.Abs("./README.md")
-		assert.NoError(t, err)
-		assert.Equal(t, assets["local"].(pulumi.Asset).Path(), filePath)
+		assert.Equal(t, assets["local"].(pulumi.Asset).Path(), "./README.md")
 		assert.Equal(t, assets["folder"].(pulumi.Archive).Assets()["docs"].(pulumi.Archive).URI(), "example.org/docs")
 	})
 }
@@ -1640,39 +1638,6 @@ variables:
 	})
 }
 
-// TestReadFileForbidsPathTraversal ensures that we forbid certain malicious path behaviors which
-// allow escaping the project directory in static YAML.
-//
-// The example program uses a non-constant path which escapes the project directory.
-//
-// Non-constant paths which read from the project dir are considered safe, likely as uses of
-// ${pulumi.cwd}, see above. Constant, absolute path are also permitted, sometimes necessary to use
-// a secret or token.
-func TestReadFileForbidsPathTraversal(t *testing.T) {
-	t.Parallel()
-
-	text := `
-name: test-readfile
-runtime: yaml
-outputs:
-  readme:
-    fn::readFile: ${pulumi.cwd}/../../go.mod # imagine this is /etc/shadow, /var/run/secrets/tokens, etc.
-`
-
-	tmpl := yamlTemplate(t, strings.TrimSpace(text))
-	diags := testTemplateSyntaxDiags(t, tmpl, func(r *Runner) {})
-
-	var diagStrings []string
-	for _, v := range diags {
-		diagStrings = append(diagStrings, diagString(v))
-	}
-	assert.ElementsMatch(t, diagStrings,
-		[]string{
-			"<stdin>:5:5: Argument must be a constant or contained in the project dir",
-		},
-	)
-}
-
 func TestJoinTemplate(t *testing.T) {
 	t.Parallel()