diff --git a/task.go b/task.go
index 54cda92762..ab33a95077 100644
--- a/task.go
+++ b/task.go
@@ -156,6 +156,14 @@ func (e *Executor) RunTask(ctx context.Context, call *Call) error {
 		}
 	}
 
+	// Attempt to create the task dir before compiling the task so that ShVars can run/access
+	// the configured task dir. If the directory can't be created (e.g. contains unresolved
+	// template values), continue as if nothing happened (the directory is created again later).
+	if t.Dir != "" && !strings.Contains(t.Dir, "{") {
+		if err := e.mkdir(t); err != nil {
+			e.Logger.Warnf("task: cannot make directory %q: %v\n", t.Dir, err)
+		}
+	}
 	t, err = e.CompiledTask(call)
 	if err != nil {
 		return err
@@ -205,6 +213,10 @@ func (e *Executor) RunTask(ctx context.Context, call *Call) error {
 	defer release()
 
 	if err = e.startExecution(ctx, t, func(ctx context.Context) error {
+		if err := e.mkdir(t); err != nil {
+			e.Logger.Errf(logger.Red, "task: cannot make directory %q: %v\n", t.Dir, err)
+		}
+
 		e.Logger.VerboseErrf(logger.Magenta, "task: %q started\n", call.Task)
 		if err := e.runDeps(ctx, t); err != nil {
 			return err
@@ -260,10 +272,6 @@ func (e *Executor) RunTask(ctx context.Context, call *Call) error {
 			}
 		}
 
-		if err := e.mkdir(t); err != nil {
-			e.Logger.Errf(logger.Red, "task: cannot make directory %q: %v\n", t.Dir, err)
-		}
-
 		var deferredExitCode uint8
 
 		for i := range t.Cmds {
diff --git a/task_test.go b/task_test.go
index 80915c2c47..bec7a88723 100644
--- a/task_test.go
+++ b/task_test.go
@@ -1752,6 +1752,37 @@ func TestDynamicVariablesShouldRunOnTheTaskDir(t *testing.T) {
 	})
 }
 
+func TestDynamicVariablesRunOnParentDir(t *testing.T) {
+	t.Parallel()
+
+	const expected = "fubar"
+	const dir = "testdata/dir/dynamic_var_on_parent_dir/"
+	const toBeCreated = dir + "somefolder"
+	const target = "default"
+	var out bytes.Buffer
+	e := task.NewExecutor(
+		task.WithDir(dir),
+		task.WithStdout(&out),
+		task.WithStderr(&out),
+		task.WithSilent(true),
+	)
+
+	// Ensure that the directory to be created doesn't actually exist.
+	_ = os.RemoveAll(toBeCreated)
+	if _, err := os.Stat(toBeCreated); err == nil {
+		t.Errorf("Directory should not exist: %v", err)
+	}
+	require.NoError(t, e.Setup())
+	require.NoError(t, e.Run(t.Context(), &task.Call{Task: target}))
+
+	normalized := normalizePathSeparators(out.String())
+	got := strings.TrimSuffix(filepath.Base(normalized), "\n")
+	assert.Equal(t, expected, got, "Mismatch message from parent dir")
+
+	// Clean-up after ourselves only if no error.
+	_ = os.RemoveAll(toBeCreated)
+}
+
 func TestDisplaysErrorOnVersion1Schema(t *testing.T) {
 	t.Parallel()
 
diff --git a/testdata/dir/dynamic_var_on_parent_dir/Taskfile.yml b/testdata/dir/dynamic_var_on_parent_dir/Taskfile.yml
new file mode 100644
index 0000000000..756511ed62
--- /dev/null
+++ b/testdata/dir/dynamic_var_on_parent_dir/Taskfile.yml
@@ -0,0 +1,10 @@
+version: '3'
+
+tasks:
+  default:
+    dir: somefolder
+    cmds:
+      - echo {{.MSG}}
+    vars:
+      MSG:
+        sh: cat ../foo.txt
diff --git a/testdata/dir/dynamic_var_on_parent_dir/foo.txt b/testdata/dir/dynamic_var_on_parent_dir/foo.txt
new file mode 100644
index 0000000000..570de9c7c2
--- /dev/null
+++ b/testdata/dir/dynamic_var_on_parent_dir/foo.txt
@@ -0,0 +1 @@
+fubar
\ No newline at end of file