diff --git a/pkg/state/helmx.go b/pkg/state/helmx.go
index 988afc08..b337cd30 100644
--- a/pkg/state/helmx.go
+++ b/pkg/state/helmx.go
@@ -303,8 +303,9 @@ func (st *HelmState) appendShowOnlyFlags(flags []string, showOnly []string) []st
 }
 
 type Chartify struct {
-	Opts  *chartify.ChartifyOpts
-	Clean func()
+	Opts                     *chartify.ChartifyOpts
+	Clean                    func()
+	NeedsChartifyForLocalDir bool
 }
 
 func (st *HelmState) downloadChartWithGoGetter(r *ReleaseSpec) (string, error) {
@@ -375,6 +376,7 @@ func (st *HelmState) PrepareChartify(helm helmexec.Interface, release *ReleaseSp
 	if stat, _ := os.Stat(dir); stat != nil && stat.IsDir() {
 		if exists, err := st.fs.FileExists(filepath.Join(dir, "Chart.yaml")); err == nil && !exists {
 			shouldRun = true
+			c.NeedsChartifyForLocalDir = true
 		}
 	}
 
diff --git a/pkg/state/state.go b/pkg/state/state.go
index cec6396d..27b48dd0 100644
--- a/pkg/state/state.go
+++ b/pkg/state/state.go
@@ -1764,7 +1764,7 @@ func (st *HelmState) prepareChartForRelease(release *ReleaseSpec, helm helmexec.
 	skipRefreshDefault := release.SkipRefresh == nil && st.HelmDefaults.SkipRefresh
 	skipRefresh := !isLocal || skipRefreshGlobal || skipRefreshRelease || skipRefreshDefault
 
-	if chartification != nil && helmfileCommand != "pull" {
+	if chartification != nil && (helmfileCommand != "pull" || chartification.NeedsChartifyForLocalDir) {
 		// Issue #2297: Normalize local chart paths before chartification
 		// When using transformers with local charts like "../chart", the chartify process
 		// needs an absolute path, otherwise it tries "helm pull ../chart" which fails
diff --git a/test/integration/run.sh b/test/integration/run.sh
index 5f4dfdde..6826406c 100755
--- a/test/integration/run.sh
+++ b/test/integration/run.sh
@@ -107,6 +107,7 @@ ${kubectl} create namespace ${test_ns} || fail "Could not create namespace ${tes
 . ${dir}/test-cases/skip-diff-output.sh
 . ${dir}/test-cases/v1-subhelmfile-multi-bases-with-array-values.sh
 . ${dir}/test-cases/kustomized-fetch.sh
+. ${dir}/test-cases/issue-2503-kustomize-fetch.sh
 . ${dir}/test-cases/regression.sh
 . ${dir}/test-cases/secretssops.sh
 . ${dir}/test-cases/yaml-overwrite.sh
diff --git a/test/integration/test-cases/issue-2503-kustomize-fetch.sh b/test/integration/test-cases/issue-2503-kustomize-fetch.sh
new file mode 100644
index 00000000..110fc255
--- /dev/null
+++ b/test/integration/test-cases/issue-2503-kustomize-fetch.sh
@@ -0,0 +1,14 @@
+issue_2503_input_dir="${cases_dir}/issue-2503-kustomize-fetch/input"
+
+test_start "issue-2503 helmfile fetch with kustomization directory"
+
+info "Testing helmfile fetch with local kustomization directory (issue #2503)"
+
+for i in $(seq 3); do
+    info "Testing helmfile fetch with kustomization #$i"
+    issue_2503_tmp=$(mktemp -d)
+    ${helmfile} -f ${issue_2503_input_dir}/helmfile.yaml fetch --output-dir ${issue_2503_tmp} || fail "\"helmfile fetch\" shouldn't fail with kustomization directory"
+    rm -fr ${issue_2503_tmp}
+done
+
+test_pass "issue-2503 helmfile fetch with kustomization directory"
diff --git a/test/integration/test-cases/issue-2503-kustomize-fetch/input/helmfile.yaml b/test/integration/test-cases/issue-2503-kustomize-fetch/input/helmfile.yaml
new file mode 100644
index 00000000..2dfe0f91
--- /dev/null
+++ b/test/integration/test-cases/issue-2503-kustomize-fetch/input/helmfile.yaml
@@ -0,0 +1,3 @@
+releases:
+- name: test-kustomize
+  chart: ./kustomize
diff --git a/test/integration/test-cases/issue-2503-kustomize-fetch/input/kustomize/configmap.yaml b/test/integration/test-cases/issue-2503-kustomize-fetch/input/kustomize/configmap.yaml
new file mode 100644
index 00000000..4d913f17
--- /dev/null
+++ b/test/integration/test-cases/issue-2503-kustomize-fetch/input/kustomize/configmap.yaml
@@ -0,0 +1,6 @@
+apiVersion: v1
+kind: ConfigMap
+metadata:
+  name: test-configmap
+data:
+  key: value
diff --git a/test/integration/test-cases/issue-2503-kustomize-fetch/input/kustomize/kustomization.yaml b/test/integration/test-cases/issue-2503-kustomize-fetch/input/kustomize/kustomization.yaml
new file mode 100644
index 00000000..4eb24440
--- /dev/null
+++ b/test/integration/test-cases/issue-2503-kustomize-fetch/input/kustomize/kustomization.yaml
@@ -0,0 +1,5 @@
+apiVersion: kustomize.config.k8s.io/v1beta1
+kind: Kustomization
+
+resources:
+- configmap.yaml