diff --git a/.changes/unreleased/Fixes-20230814-145702.yaml b/.changes/unreleased/Fixes-20230814-145702.yaml
new file mode 100644
index 00000000000..248a47c8a5f
--- /dev/null
+++ b/.changes/unreleased/Fixes-20230814-145702.yaml
@@ -0,0 +1,6 @@
+kind: Fixes
+body: Fix using list command with path selector and project-dir
+time: 2023-08-14T14:57:02.02816-04:00
+custom:
+  Author: gshank
+  Issue: "8385"
diff --git a/core/dbt/task/list.py b/core/dbt/task/list.py
index eb8c4784845..94cd4997cc2 100644
--- a/core/dbt/task/list.py
+++ b/core/dbt/task/list.py
@@ -15,6 +15,7 @@
     ListCmdOut,
 )
 from dbt.exceptions import DbtRuntimeError, DbtInternalError
+from dbt.events.contextvars import task_contextvars
 
 
 class ListTask(GraphRunnableTask):
@@ -123,20 +124,23 @@ def generate_paths(self):
             yield node.original_file_path
 
     def run(self):
-        self.compile_manifest()
-        output = self.args.output
-        if output == "selector":
-            generator = self.generate_selectors
-        elif output == "name":
-            generator = self.generate_names
-        elif output == "json":
-            generator = self.generate_json
-        elif output == "path":
-            generator = self.generate_paths
-        else:
-            raise DbtInternalError("Invalid output {}".format(output))
+        # We set up a context manager here with "task_contextvars" because we
+        # we need the project_root in compile_manifest.
+        with task_contextvars(project_root=self.config.project_root):
+            self.compile_manifest()
+            output = self.args.output
+            if output == "selector":
+                generator = self.generate_selectors
+            elif output == "name":
+                generator = self.generate_names
+            elif output == "json":
+                generator = self.generate_json
+            elif output == "path":
+                generator = self.generate_paths
+            else:
+                raise DbtInternalError("Invalid output {}".format(output))
 
-        return self.output_results(generator())
+            return self.output_results(generator())
 
     def output_results(self, results):
         """Log, or output a plain, newline-delimited, and ready-to-pipe list of nodes found."""
diff --git a/tests/functional/graph_selection/test_graph_selection.py b/tests/functional/graph_selection/test_graph_selection.py
index 88b45c8bcf5..4725d01eb23 100644
--- a/tests/functional/graph_selection/test_graph_selection.py
+++ b/tests/functional/graph_selection/test_graph_selection.py
@@ -142,6 +142,24 @@ def test_locally_qualified_name(self, project):
         check_result_nodes_by_name(results, ["subdir"])
         assert_correct_schemas(project)
 
+        # Check that list command works
+        os.chdir(
+            project.profiles_dir
+        )  # Change to random directory to test that Path selector works with project-dir
+        results = run_dbt(
+            [
+                "-q",
+                "ls",
+                "-s",
+                "path:models/test/subdir.sql",
+                "--project-dir",
+                str(project.project_root),
+            ]
+            #           ["list", "--project-dir", str(project.project_root), "--select", "models/test/subdir*"]
+        )
+        print(f"--- results: {results}")
+        assert len(results) == 1
+
     def test_locally_qualified_name_model_with_dots(self, project):
         results = run_dbt(["run", "--select", "alternative.users"], expect_pass=False)
         check_result_nodes_by_name(results, ["alternative.users"])
@@ -268,3 +286,22 @@ def test_exposure_parents(self, project):
                 "users",
             ],
         )
+
+
+class TestListPathGraphSelection(SelectionFixtures):
+    def test_list_select_with_project_dir(self, project):
+        # Check that list command works
+        os.chdir(
+            project.profiles_dir
+        )  # Change to random directory to test that Path selector works with project-dir
+        results = run_dbt(
+            [
+                "-q",
+                "ls",
+                "-s",
+                "path:models/test/subdir.sql",
+                "--project-dir",
+                str(project.project_root),
+            ]
+        )
+        assert results == ["test.test.subdir"]