diff --git a/example/v3/bundle.js b/example/v3/bundle.js
index 9b17c9d..f1867df 100644
--- a/example/v3/bundle.js
+++ b/example/v3/bundle.js
@@ -4,14 +4,18 @@ const {readFileSync, writeFileSync} = require('fs')
 async function main() {
     await singleFile()
     await multiFile()
+    await singleFileWithBaseDir()
 }
 
 
-async function singleFile(){
-    const document = await bundle([readFileSync('./main.yaml', 'utf-8')] )
+async function singleFileWithBaseDir(){
+    const document = await bundle([readFileSync('./spec/main.yaml', 'utf-8')], {baseDir: './spec'})
+    writeFileSync('asyncapi.yaml', document.yml())
+}
 
+async function singleFile(){
+    const document = await bundle([readFileSync('./spec/main.yaml', 'utf-8')], {baseDir: './spec'})
     writeFileSync('asyncapi.yaml', document.yml())
-    
 }
 
 async function multiFile(){
diff --git a/example/v3/package-lock.json b/example/v3/package-lock.json
index 526ead5..e7c5be8 100644
--- a/example/v3/package-lock.json
+++ b/example/v3/package-lock.json
@@ -13,7 +13,8 @@
       }
     },
     "../..": {
-      "version": "0.3.11",
+      "name": "@asyncapi/bundler",
+      "version": "0.4.0",
       "license": "Apache-2.0",
       "dependencies": {
         "@apidevtools/json-schema-ref-parser": "^9.0.9",
diff --git a/example/v3/spec/main.yaml b/example/v3/spec/main.yaml
new file mode 100644
index 0000000..bcd042e
--- /dev/null
+++ b/example/v3/spec/main.yaml
@@ -0,0 +1,34 @@
+asyncapi: 3.0.0
+info:
+  title: Account Service
+  version: 1.0.0
+  description: This service is in charge of processing user signupsA
+channels:
+  userSignedup:
+    address: 'user/signedup'
+    messages:
+      userSignedUpMessage:
+        $ref: './messages.yaml#/messages/UserSignedUp'
+  test:
+    address: '/test'
+    messages:
+      testMessage:
+        $ref: '#/components/messages/TestMessage'
+operations:
+  UserSignedUp:
+    action: send
+    channel:
+      $ref: '#/channels/userSignedup'
+    messages:
+      - $ref: './messages.yaml#/messages/UserSignedUp'
+  TestOpp:
+    action: send
+    channel:
+      $ref: '#/channels/test'
+    messages:
+      - $ref: '#/components/messages/TestMessage'
+components:
+  messages:
+    TestMessage:
+      payload:
+        type: string
\ No newline at end of file
diff --git a/example/v3/spec/messages.yaml b/example/v3/spec/messages.yaml
new file mode 100644
index 0000000..e9d7cbf
--- /dev/null
+++ b/example/v3/spec/messages.yaml
@@ -0,0 +1,17 @@
+messages:
+  UserSignedUp:
+    payload:
+      type: object
+      properties:
+        displayName:
+          type: string
+          description: Name of the user
+        email:
+          type: string
+          format: email
+          description: Email of the user
+  UserLoggedIn:
+    payload:
+      type: object
+      properties:
+        id: string
\ No newline at end of file
diff --git a/src/index.ts b/src/index.ts
index 539b465..ab8b01a 100644
--- a/src/index.ts
+++ b/src/index.ts
@@ -1,4 +1,4 @@
-import { toJS, resolve, versionCheck } from './util';
+import { toJS, resolve, versionCheck, resolveBaseFileDir } from './util';
 import { Document } from './document';
 import { parse } from './parser';
 
@@ -80,6 +80,10 @@ export default async function bundle(files: string[], options: any = {}) {
 
   const parsedJsons = files.map(file => toJS(file)) as AsyncAPIObject[];
 
+  if (typeof options.baseDir !== 'undefined') {
+    parsedJsons.forEach( parsedJson => resolveBaseFileDir(parsedJson, options.baseDir))
+  }
+
   const majorVersion = versionCheck(parsedJsons);
   let resolvedJsons;
 
diff --git a/src/util.ts b/src/util.ts
index 93b2cdf..b366a90 100644
--- a/src/util.ts
+++ b/src/util.ts
@@ -3,8 +3,11 @@ import { cloneDeep } from 'lodash';
 import yaml from 'js-yaml';
 import { parse } from './parser';
 import { ParserError } from './errors';
+import {JSONPath} from 'jsonpath-plus';
 
 import type { AsyncAPIObject } from './spec-types';
+import path from 'path';
+import { parentPort } from 'worker_threads';
 
 /**
  * @private
@@ -99,4 +102,52 @@ export function versionCheck(asyncapiDocuments: AsyncAPIObject[]): number {
     currentVersion = majorVersion;
   }
   return currentVersion;
+}
+
+export function isExternalReference(ref: string): boolean {
+  return typeof ref === 'string' && !ref.startsWith('#')
+}
+
+export function notAUrl(ref: string): boolean {
+  try {
+    new URL(ref)
+    return false
+  } catch (error) {
+    return true
+  }
+}
+
+export function resolveBaseFileDir(file: object, baseFileDir: string) {
+  /**
+   * Update the local refences in a given file with the 
+   * absolute file path using the baseDir passed by the 
+   * user as an option. 
+   */
+  JSONPath({
+    json: file,
+    resultType: 'all',
+    path: '$.channels.*.messages.*'
+  }).forEach( ({parent, parentProperty}: {parent: any, parentProperty: string}) => {
+    const ref = parent[String(parentProperty)]['$ref']
+    if (isExternalReference(ref) && notAUrl(ref)) {
+      // console.log(ref)
+      // console.log(path.resolve(baseFileDir, ref))
+      parent[String(parentProperty)]['$ref'] = path.resolve(baseFileDir, ref)
+    }
+  })
+
+  JSONPath({
+    json: file,
+    resultType: 'all',
+    path: '$.operations.*.messages.*'
+  }).forEach(
+    ({parent, parentProperty}: {parent: any, parentProperty: string}) => {
+    const ref = parent[String(parentProperty)]['$ref']
+    if (isExternalReference(ref) && notAUrl(ref)) {
+      // console.log(ref)
+      // console.log(path.resolve(baseFileDir, ref))
+      parent[String(parentProperty)]['$ref'] = path.resolve(baseFileDir, ref)
+    }
+    }
+  )
 }
\ No newline at end of file
diff --git a/src/v3/parser.ts b/src/v3/parser.ts
index 4152a08..fcea1fa 100644
--- a/src/v3/parser.ts
+++ b/src/v3/parser.ts
@@ -1,6 +1,7 @@
 import $RefParser, {$Refs} from '@apidevtools/json-schema-ref-parser';
 import { JSONPath } from 'jsonpath-plus';
 import { merge } from 'lodash';
+import path from 'path';
 
 import { AsyncAPIObject } from 'spec-types';