diff --git a/install_rally.sh b/install_rally.sh
index 137653379e..52c4587dc3 100755
--- a/install_rally.sh
+++ b/install_rally.sh
@@ -574,8 +574,13 @@ then
     RALLY_DATABASE_DIR="$VENVDIR"/database
 fi
 
-if [ "$DBTYPE" != 'sqlite' ]
-then
+if [ "$DBTYPE" = 'sqlite' ]; then
+    if [ "${DBNAME:0:1}" = '/' ]; then
+        DBCONNSTRING="$DBTYPE:///$DBNAME"
+    else
+        DBCONNSTRING="$DBTYPE:///${RALLY_DATABASE_DIR}/${DBNAME}"
+    fi
+else
     if [ -z "$DBUSER" -o -z "$DBPASSWORD" -o -z "$DBHOST" -o -z "$DBNAME" ]
     then
         die $EX_USAGE "Missing mandatory options" <<__EOF__
@@ -593,8 +598,6 @@ __EOF__
     fi
     DBAUTH="$DBUSER:$DBPASSWORD@$DBHOST"
     DBCONNSTRING="$DBTYPE://$DBAUTH/$DBNAME"
-else
-    DBCONNSTRING="$DBTYPE:///${RALLY_DATABASE_DIR}/${DBNAME}"
 fi
 
 # check and install prerequisites