diff --git a/pw_protobuf_compiler/nanopb_proto_library.bzl b/pw_protobuf_compiler/nanopb_proto_library.bzl
index d808f8c27..7e99ad000 100644
--- a/pw_protobuf_compiler/nanopb_proto_library.bzl
+++ b/pw_protobuf_compiler/nanopb_proto_library.bzl
@@ -57,16 +57,25 @@ def nanopb_proto_library(*, name, deps, tags = [], options = None, **kwargs):
         **kwargs
     )
 
+def _custom_opt_for_library_include_format():
+    """Return correctly set --library-include-format.
+
+    When using nanopb_proto_library from a monorepo in which nanopb is not an
+    external repository but just a build target within the main tree, the
+    #include statements need to be relative to the root of that tree. Handle
+    this case using --library-include-format.
+    """
+    pb_h = Label("@com_github_nanopb_nanopb//:pb.h")
+    if pb_h.workspace_root == "":
+        # Monorepo case
+        return "--library-include-format=#include \"{}/%s\"".format(pb_h.package)
+    else:
+        return "--library-include-format=#include \"%s\""
+
 _nanopb_proto_compiler_aspect = proto_compiler_aspect(
     ["pb.h", "pb.c"],
     Label("@com_github_nanopb_nanopb//:protoc-gen-nanopb"),
-    [],
-    {
-        "_pb_h": attr.label(
-            default = Label("@com_github_nanopb_nanopb//:pb.h"),
-            allow_single_file = True,
-        ),
-    },
+    [_custom_opt_for_library_include_format()],
 )
 
 _nanopb_proto_library = rule(
diff --git a/pw_protobuf_compiler/private/proto.bzl b/pw_protobuf_compiler/private/proto.bzl
index 6f3fb319e..989611fe3 100644
--- a/pw_protobuf_compiler/private/proto.bzl
+++ b/pw_protobuf_compiler/private/proto.bzl
@@ -194,14 +194,6 @@ def _proto_compiler_aspect_impl(target, ctx):
             continue
         args.add("--custom_opt={}".format(plugin_option))
 
-    # In certain environments the path to pb.h must be defined, rather
-    # than relying on the default location.
-    # Use a format string rather than `quote`, to maintain support
-    # for nanopb 3.
-    if hasattr(ctx.attr, "_pb_h"):
-        plugin_options_arg = "--library-include-format=#include \"{}/%s\"".format(ctx.file._pb_h.dirname)
-        args.add("--custom_opt={}".format(plugin_options_arg))
-
     args.add("--custom_out={}".format(out_path))
     args.add_all(proto_info.direct_sources)
 
@@ -247,7 +239,7 @@ def _proto_compiler_aspect_impl(target, ctx):
         includes = transitive_includes,
     )]
 
-def proto_compiler_aspect(extensions, protoc_plugin, plugin_options = [], additional_attrs = {}):
+def proto_compiler_aspect(extensions, protoc_plugin, plugin_options = []):
     """Returns an aspect that runs the proto compiler.
 
     The aspect propagates through the deps of proto_library targets, running
@@ -278,7 +270,7 @@ def proto_compiler_aspect(extensions, protoc_plugin, plugin_options = [], additi
                 executable = True,
                 cfg = "exec",
             ),
-        } | additional_attrs,
+        },
         implementation = _proto_compiler_aspect_impl,
         provides = [PwProtoInfo],
         toolchains = ["@rules_python//python:exec_tools_toolchain_type"],