diff --git a/hab/parsers/flat_config.py b/hab/parsers/flat_config.py
index 50a239b..c40015b 100644
--- a/hab/parsers/flat_config.py
+++ b/hab/parsers/flat_config.py
@@ -157,9 +157,6 @@ def extract_global_keys(operation, merged_env, global_env):
     def aliases(self):
         """List of the names and commands that need created to launch desired
         applications."""
-        if "aliases" in self.frozen_data:
-            return self.frozen_data.get("aliases", {}).get(utils.Platform.name(), {})
-
         return self.frozen_data.get("aliases", {}).get(utils.Platform.name(), {})
 
     @property
@@ -236,7 +233,11 @@ def versions(self):
 
                 # If this version defines any alias_mods, store them for later
                 if version.alias_mods:
-                    for name, mod in version.alias_mods.items():
+                    # Format the alias environment at this point so any path
+                    # based variables like {relative_root} are resolved against
+                    # the version's directory not the alias being modified
+                    mods = version.format_environment_value(version.alias_mods)
+                    for name, mod in mods.items():
                         self._alias_mods.setdefault(name, []).append(mod)
 
         return self.frozen_data["versions"]
diff --git a/hab/parsers/hab_base.py b/hab/parsers/hab_base.py
index d6af296..f84a7c7 100644
--- a/hab/parsers/hab_base.py
+++ b/hab/parsers/hab_base.py
@@ -391,6 +391,9 @@ def format_environment_value(self, value, ext=None, platform=None):
                 k: self.format_environment_value(v, ext=ext, platform=platform)
                 for k, v in value.items()
             }
+        elif isinstance(value, bool):
+            # Just return boolean values, no need to format
+            return value
 
         # Expand and format any variables like "relative_root" using the current
         # platform for paths.
diff --git a/tests/test_parsing.py b/tests/test_parsing.py
index 5526775..e59f67b 100644
--- a/tests/test_parsing.py
+++ b/tests/test_parsing.py
@@ -753,8 +753,10 @@ def test_alias_mods_as_dict(resolver):
     env = alias["environment"]
 
     # Check alias_mod is prepended to alias defined env var
-    assert env['ALIASED_LOCAL'][0].endswith("modified")
-    assert env['ALIASED_LOCAL'][1].endswith('test')
+    # Also check that the alias_mods {relative_root} path is resolved to the directory
+    assert env['ALIASED_LOCAL'][0].endswith("distros/aliased_mod/1.0/modified")
+    # Check that the alias {relative_root} path is resolved to it's directory
+    assert env['ALIASED_LOCAL'][1].endswith('distros/aliased/2.0/test')
     # Env var can be set by alias_mod without any other hab management
     assert env['ALIASED_MOD_LOCAL_A'] == ['Local Mod A']