diff --git a/man/crystal.1 b/man/crystal.1
index 9134b8fcc8ef..2b1f7bd8cd57 100644
--- a/man/crystal.1
+++ b/man/crystal.1
@@ -139,7 +139,7 @@ Disable colored output.
 .It Fl -no-codegen
 Don't do code generation, just parse the file.
 .It Fl o
-Specify filename of output.
+Specify output path. If a directory, the filename is derived from the first source file (default: ./)
 .It Fl -prelude
 Specify prelude to use. The default one initializes the garbage collector. You can also use --prelude=empty to use no preludes. This can be useful for checking code generation for a specific source code file.
 .It Fl O Ar LEVEL
diff --git a/src/compiler/crystal/command.cr b/src/compiler/crystal/command.cr
index cc6f39657f64..1534f15fc16f 100644
--- a/src/compiler/crystal/command.cr
+++ b/src/compiler/crystal/command.cr
@@ -508,7 +508,7 @@ class Crystal::Command
         opts.on("--no-codegen", "Don't do code generation") do
           compiler.no_codegen = true
         end
-        opts.on("-o ", "Output filename") do |an_output_filename|
+        opts.on("-o ", "Output path. If a directory, the filename is derived from the first source file (default: ./)") do |an_output_filename|
           opt_output_filename = an_output_filename
           specified_output = true
         end
@@ -583,7 +583,6 @@ class Crystal::Command
 
     compiler.link_flags = link_flags.join(' ') unless link_flags.empty?
 
-    output_filename = opt_output_filename
     filenames += opt_filenames.not_nil!
     arguments = opt_arguments.not_nil!
 
@@ -604,18 +603,22 @@ class Crystal::Command
     sources.concat gather_sources(filenames)
 
     output_extension = compiler.cross_compile? ? compiler.codegen_target.object_extension : compiler.codegen_target.executable_extension
-    if output_filename
-      if File.extname(output_filename).empty?
-        output_filename += output_extension
-      end
-    else
+
+    output_path = ::Path[opt_output_filename || "./"]
+
+    if output_path.ends_with_separator? || File.directory?(output_path)
       first_filename = sources.first.filename
-      output_filename = "#{::Path[first_filename].stem}#{output_extension}"
+      output_filename = (output_path / "#{::Path[first_filename].stem}#{output_extension}").normalize.to_s
 
       # Check if we'll overwrite the main source file
       if !compiler.no_codegen? && !run && first_filename == File.expand_path(output_filename)
         error "compilation will overwrite source file '#{Crystal.relative_filename(first_filename)}', either change its extension to '.cr' or specify an output file with '-o'"
       end
+    else
+      output_filename = output_path.to_s
+      if output_path.extension.empty?
+        output_filename += output_extension
+      end
     end
 
     output_format ||= allowed_formats[0]