diff --git a/client/ayon_core/plugins/publish/integrate_usd_output_processor_remap_relative.py b/client/ayon_core/plugins/publish/integrate_usd_output_processor_remap_relative.py
new file mode 100644
index 0000000000..3ff5f271f5
--- /dev/null
+++ b/client/ayon_core/plugins/publish/integrate_usd_output_processor_remap_relative.py
@@ -0,0 +1,131 @@
+import os
+
+import pyblish.api
+
+from ayon_core.pipeline import OptionalPyblishPluginMixin
+from ayon_core.pipeline.publish.lib import get_instance_expected_output_path
+
+try:
+    from pxr import Sdf, UsdUtils
+    HAS_USD_LIBS = True
+except ImportError:
+    HAS_USD_LIBS = False
+
+
+RELATIVE_ANCHOR_PREFIXES = ("./", "../", ".\\", "..\\")
+
+
+def get_drive(path) -> str:
+    """Return disk drive from path"""
+    return os.path.splitdrive(path)[0]
+
+
+class USDOutputProcessorRemapToRelativePaths(pyblish.api.InstancePlugin,
+                                             OptionalPyblishPluginMixin):
+    """Remap all paths in a USD Layer to be relative to its published path"""
+
+    label = "Process USD files to use relative paths"
+    families = ["usd"]
+
+    # Run just before the Integrator
+    order = pyblish.api.IntegratorOrder - 0.01
+
+    def process(self, instance):
+        if not self.is_active(instance.data):
+            return
+
+        # Skip instance if not marked for integration
+        if not instance.data.get("integrate", True):
+            return
+
+        # Some hosts may not have USD libs available but can publish USD data.
+        # For those we'll log a warning.
+        if not HAS_USD_LIBS:
+            self.log.warning(
+                "Unable to process USD files to relative paths because "
+                "`pxr` USD libraries could not be imported.")
+            return
+
+        # For each USD representation, process the file.
+        for representation in instance.data.get("representations", []):
+            representation: dict
+
+            if representation.get("name") != "usd":
+                continue
+
+            # Get expected publish path
+            published_path = get_instance_expected_output_path(
+                instance,
+                representation_name=representation["name"],
+                ext=representation.get("ext")
+            )
+            published_path_root = os.path.dirname(published_path)
+
+            # Process all files of the representation
+            staging_dir: str = representation.get(
+                "stagingDir", instance.data.get("stagingDir"))
+
+            # Process single file or sequence of the representation
+            if isinstance(representation["files"], str):
+                # Single file
+                fname: str = representation["files"]
+                path = os.path.join(staging_dir, fname)
+                self.process_usd(path, start=published_path_root)
+            else:
+                # Sequence
+                for fname in representation["files"]:
+                    path = os.path.join(staging_dir, fname)
+                    self.process_usd(path, start=published_path_root)
+
+        # Some instance may have additional transferred files which
+        # themselves are not a representation. For those we need to look in
+        # the `instance.data["transfers"]`
+        for src, dest in instance.data.get("transfers", []):
+            if not dest.endswith(".usd"):
+                continue
+
+            # Process USD file at `src` and turn all paths relative to
+            # the `dest` path the file will end up at.
+            dest_root = os.path.dirname(dest)
+            self.process_usd(src, start=dest_root)
+
+    def process_usd(self, usd_path, start):
+        """Process a USD layer making all paths relative to `start`"""
+        self.log.debug(f"Processing '{usd_path}'")
+        layer = Sdf.Layer.FindOrOpen(usd_path)
+
+        def modify_fn(asset_path: str):
+            """Make all absolute non-anchored paths relative to `start`"""
+            self.log.debug(f"Processing asset path: {asset_path}")
+
+            # Do not touch paths already anchored paths
+            if not os.path.isabs(asset_path):
+                return asset_path
+
+            # Do not touch paths already anchored paths
+            if asset_path.startswith(RELATIVE_ANCHOR_PREFIXES):
+                # Already anchored
+                return asset_path
+
+            # Do not touch what we know are AYON URIs
+            if asset_path.startswith(("ayon://", "ayon+entity://")):
+                return asset_path
+
+            # Consider only files on the same drive, because otherwise no
+            # 'relative' path exists for the file.
+            if get_drive(start) != get_drive(asset_path):
+                # Log a warning if different drive
+                self.log.warning(
+                    f"USD Asset Path '{asset_path}' can not be made relative"
+                    f" to '{start}' because they are not on the same drive.")
+                return asset_path
+
+            anchored_path = "./" + os.path.relpath(asset_path, start)
+            self.log.debug(f"Anchored path: {anchored_path}")
+            return anchored_path
+
+        # Get all "asset path" specs, sublayer paths and references/payloads.
+        # Make all the paths relative.
+        UsdUtils.ModifyAssetPaths(layer, modify_fn)
+        if layer.dirty:
+            layer.Save()
diff --git a/server/settings/publish_plugins.py b/server/settings/publish_plugins.py
index cdcd28a9ce..31b56195a8 100644
--- a/server/settings/publish_plugins.py
+++ b/server/settings/publish_plugins.py
@@ -940,6 +940,10 @@ class PublishPuginsModel(BaseSettingsModel):
         default_factory=AyonEntityURIModel,
         title="Extract USD Layer Contribution",
     )
+    USDOutputProcessorRemapToRelativePaths: ValidateBaseModel = SettingsField(
+        default_factory=ValidateBaseModel,
+        title="Process USD files to use relative paths"
+    )
     PreIntegrateThumbnails: PreIntegrateThumbnailsModel = SettingsField(
         default_factory=PreIntegrateThumbnailsModel,
         title="Override Integrate Thumbnail Representations"
@@ -1256,6 +1260,11 @@ class PublishPuginsModel(BaseSettingsModel):
     "ExtractUSDLayerContribution": {
         "use_ayon_entity_uri": False,
     },
+    "USDOutputProcessorRemapToRelativePaths": {
+        "enabled": False,
+        "optional": False,
+        "active": True,
+    },
     "PreIntegrateThumbnails": {
         "enabled": True,
         "integrate_profiles": []