diff --git a/.changes/unreleased/Fixes-20231010-182801.yaml b/.changes/unreleased/Fixes-20231010-182801.yaml
new file mode 100644
index 00000000000..50f90b7d746
--- /dev/null
+++ b/.changes/unreleased/Fixes-20231010-182801.yaml
@@ -0,0 +1,6 @@
+kind: Fixes
+body: Override path-like args in dbt retry
+time: 2023-10-10T18:28:01.556443+01:00
+custom:
+  Author: aranke
+  Issue: "8682"
diff --git a/core/dbt/task/retry.py b/core/dbt/task/retry.py
index 3a14932aea8..a6ab4e24c9a 100644
--- a/core/dbt/task/retry.py
+++ b/core/dbt/task/retry.py
@@ -19,6 +19,16 @@
 from dbt.task.test import TestTask
 
 RETRYABLE_STATUSES = {NodeStatus.Error, NodeStatus.Fail, NodeStatus.Skipped, NodeStatus.RuntimeErr}
+OVERRIDE_PARENT_FLAGS = {
+    "log_path",
+    "output_path",
+    "profiles_dir",
+    "profiles_dir_exists_false",
+    "project_dir",
+    "defer_state",
+    "deprecated_state",
+    "target_path",
+}
 
 TASK_DICT = {
     "build": BuildTask,
@@ -91,7 +101,13 @@ def run(self):
             if k in self.previous_args and v(self.previous_args[k]):
                 del self.previous_args[k]
 
-        retry_flags = Flags.from_dict(cli_command, self.previous_args)
+        previous_args = {
+            k: v for k, v in self.previous_args.items() if k not in OVERRIDE_PARENT_FLAGS
+        }
+        current_args = {k: v for k, v in self.args.__dict__.items() if k in OVERRIDE_PARENT_FLAGS}
+        combined_args = {**previous_args, **current_args}
+
+        retry_flags = Flags.from_dict(cli_command, combined_args)
         retry_config = RuntimeConfig.from_args(args=retry_flags)
 
         class TaskWrapper(self.task_class):
diff --git a/tests/functional/retry/test_retry.py b/tests/functional/retry/test_retry.py
index c028bc33f45..c0a8cbc13e4 100644
--- a/tests/functional/retry/test_retry.py
+++ b/tests/functional/retry/test_retry.py
@@ -1,3 +1,5 @@
+from shutil import copytree, move
+
 import pytest
 
 from dbt.contracts.results import RunStatus, TestStatus
@@ -271,3 +273,21 @@ def test_resource_type(self, project):
         # nothing to do
         results = run_dbt(["retry"])
         assert len(results) == 0
+
+
+class TestRetryOverridePath:
+    @pytest.fixture(scope="class")
+    def models(self):
+        return {
+            "sample_model.sql": models__sample_model,
+        }
+
+    def test_retry(self, project):
+        project_root = project.project_root
+        proj_location_1 = project_root / "proj_location_1"
+        proj_location_2 = project_root / "proj_location_2"
+
+        copytree(project_root, proj_location_1)
+        run_dbt(["run", "--project-dir", "proj_location_1"], expect_pass=False)
+        move(proj_location_1, proj_location_2)
+        run_dbt(["retry", "--project-dir", "proj_location_2"], expect_pass=False)