diff --git a/daffodil-lib/src/main/scala/org/apache/daffodil/lib/xml/DaffodilXMLLoader.scala b/daffodil-lib/src/main/scala/org/apache/daffodil/lib/xml/DaffodilXMLLoader.scala
index c184866cd9..fff37ef448 100644
--- a/daffodil-lib/src/main/scala/org/apache/daffodil/lib/xml/DaffodilXMLLoader.scala
+++ b/daffodil-lib/src/main/scala/org/apache/daffodil/lib/xml/DaffodilXMLLoader.scala
@@ -216,12 +216,40 @@ class DFDLCatalogResolver private ()
     // because the nsURI will resolve to the including schema file.
     // This will cause the including schema to be repeatedly parsed resulting in a stack overflow.
 
+    lazy val systemIdUri = if (systemId != null) {
+      new URI(systemId)
+    } else {
+      null
+    }
+    /**
+     * Xerces has a bug where it aboslutizes systemId. i.e the user supplies
+     *  {{{
+     *    <xs:schema...
+     *    ... xsi:schemaLocation="urn:some:namespace /some/path.xsd"
+     *  }}}
+     * Xerces takes that schemaLocation path and absolutizes it to file:/some/path.xsd
+     * and passes that to our resolveEntity, which while it's able to find the namespace,
+     * fails to set the resolvedUri since the file:/some/path.xsd will never match anything
+     * resolved from our catalog since that'd return something like
+     * file:/some/absolute/path/to/some/path.xsd.
+     *
+     * This is a workaround to that bug where we convert systemId to a URI and check if the
+     * path (from URI.getPath) matches the end of resolvedUri. Note: This can ignore absolute
+     * URIs passed in for schemaLocation, but those are edge cases where the user expects
+     * the namespace to match a different file (i.e what they provide in the schemalocation)
+     * than what we find in the catalog.
+     */
+    lazy val systemIdPath = if (systemIdUri != null && systemIdUri.getScheme == "file") {
+      systemIdUri.getPath
+    } else {
+      systemId
+    }
     val resolvedId = {
       if (resolvedSystem != null && resolvedSystem != resolvedUri) {
         resolvedSystem
       } else if (
         resolvedUri != null && ((systemId == null) || (systemId != null && resolvedUri.endsWith(
-          (new URI(systemId)).getPath
+         systemIdPath
         )))
       ) {
         resolvedUri