diff --git a/.changes/unreleased/Fixes-20250219-224310.yaml b/.changes/unreleased/Fixes-20250219-224310.yaml
new file mode 100644
index 00000000000..ca7091f6d5e
--- /dev/null
+++ b/.changes/unreleased/Fixes-20250219-224310.yaml
@@ -0,0 +1,6 @@
+kind: Fixes
+body: Models defined in .yml files have weird paths
+time: 2025-02-19T22:43:10.5172941+10:30
+custom:
+    Author: joshuanits
+    Issue: "11321"
diff --git a/core/dbt/contracts/graph/nodes.py b/core/dbt/contracts/graph/nodes.py
index df1f6185df7..58bff93b57e 100644
--- a/core/dbt/contracts/graph/nodes.py
+++ b/core/dbt/contracts/graph/nodes.py
@@ -255,6 +255,11 @@ def get_target_write_path(
         if os.path.basename(self.path) == os.path.basename(self.original_file_path):
             # One-to-one relationship of nodes to files.
             path = self.original_file_path
+        elif os.path.dirname(self.path) == os.path.basename(self.original_file_path):
+            parent_dirname = os.path.dirname(self.original_file_path)
+            dirname = os.path.dirname(self.path).replace(".", "_")
+            basename = os.path.basename(self.path)
+            path = os.path.join(parent_dirname, dirname, basename)
         else:
             #  Many-to-one relationship of nodes to files.
             path = os.path.join(self.original_file_path, self.path)
diff --git a/tests/unit/graph/test_nodes.py b/tests/unit/graph/test_nodes.py
index a0e0a8d7e56..2769cf33684 100644
--- a/tests/unit/graph/test_nodes.py
+++ b/tests/unit/graph/test_nodes.py
@@ -410,6 +410,22 @@ def parsed_node(self) -> ParsedNode:
             database=None,
         )
 
+    @pytest.fixture(scope="class")
+    def parsed_yml_node(self) -> ParsedNode:
+        return ParsedNode(
+            resource_type=NodeType.Model,
+            unique_id="model.test_package.test_name",
+            name="test_name",
+            package_name="test_package",
+            schema="test_schema",
+            alias="test_alias",
+            fqn=["models", "test_name"],
+            original_file_path="folder/test_original_file_path.yml",
+            checksum=FileHash.from_contents("checksum"),
+            path="test_original_file_path.yml/test_path.sql",
+            database=None,
+        )
+
     def test_get_target_write_path(self, parsed_node):
         write_path = parsed_node.get_target_write_path("target_path", "subdirectory")
         assert (
@@ -423,3 +439,10 @@ def test_get_target_write_path_split(self, parsed_node):
             write_path
             == "target_path/subdirectory/test_package/test_original_file_path/test_path/test_path_split.sql"
         )
+
+    def test_get_target_write_path_for_yml_node(self, parsed_yml_node):
+        write_path = parsed_yml_node.get_target_write_path("target_path", "subdirectory")
+        assert (
+            write_path
+            == "target_path/subdirectory/test_package/folder/test_original_file_path_yml/test_path.sql"
+        )