diff --git a/Lib/py_compile.py b/Lib/py_compile.py
--- a/Lib/py_compile.py
+++ b/Lib/py_compile.py
@@ -130,7 +130,9 @@ def compile(file, cfile=None, dfile=None
         else:
             cfile = imp.cache_from_source(file)
     try:
-        os.makedirs(os.path.dirname(cfile))
+        dirname = os.path.dirname(cfile)
+        if dirname:
+            os.makedirs(dirname)
     except OSError as error:
         if error.errno != errno.EEXIST:
             raise
diff --git a/Lib/test/test_py_compile.py b/Lib/test/test_py_compile.py
--- a/Lib/test/test_py_compile.py
+++ b/Lib/test/test_py_compile.py
@@ -39,6 +39,15 @@ class PyCompileTests(unittest.TestCase):
         py_compile.compile(self.source_path)
         self.assertTrue(os.path.exists(self.cache_path))
 
+    def test_cwd(self):
+        cwd = os.getcwd()
+        os.chdir(self.directory)
+        py_compile.compile(os.path.basename(self.source_path),
+                           os.path.basename(self.pyc_path))
+        os.chdir(cwd)
+        self.assertTrue(os.path.exists(self.pyc_path))
+        self.assertFalse(os.path.exists(self.cache_path))
+
     def test_relative_path(self):
         py_compile.compile(os.path.relpath(self.source_path),
                            os.path.relpath(self.pyc_path))