diff --git a/codegen/src/ir.rs b/codegen/src/ir.rs
index 30faa92294..59bc53c5a9 100644
--- a/codegen/src/ir.rs
+++ b/codegen/src/ir.rs
@@ -23,7 +23,6 @@ use syn::{
 
 #[derive(Debug, PartialEq, Eq)]
 pub struct ItemMod {
-    // attrs: Vec<syn::Attribute>,
     vis: syn::Visibility,
     mod_token: token::Mod,
     pub ident: syn::Ident,
@@ -103,6 +102,26 @@ impl From<syn::Item> for Item {
             if let Some(attr) = substitute_attrs.get(0) {
                 let use_path = &use_.tree;
                 let substitute_with: syn::TypePath = syn::parse_quote!( #use_path );
+
+                let is_crate = substitute_with
+                    .path
+                    .segments
+                    .first()
+                    .map(|segment| segment.ident == "crate")
+                    .unwrap_or(false);
+
+                // Check if the substitute path is a global absolute path, meaning it
+                // is prefixed with `::` or `crate`.
+                //
+                // Note: the leading colon is lost when parsing to `syn::TypePath` via
+                // `syn::parse_quote!`. Therefore, inspect `use_`'s leading colon.
+                if use_.leading_colon.is_none() && !is_crate {
+                    abort!(
+                        use_path.span(),
+                        "The substitute path must be a global absolute path; try prefixing with `::` or `crate`"
+                    )
+                }
+
                 let type_substitute = SubxtItem::TypeSubstitute {
                     generated_type_path: attr.substitute_type(),
                     substitute_with,
diff --git a/testing/test-runtime/build.rs b/testing/test-runtime/build.rs
index acff4a9641..88937c61e5 100644
--- a/testing/test-runtime/build.rs
+++ b/testing/test-runtime/build.rs
@@ -108,7 +108,7 @@ async fn run() {
         )]
         pub mod node_runtime {{
             #[subxt(substitute_type = "sp_arithmetic::per_things::Perbill")]
-            use sp_runtime::Perbill;
+            use ::sp_runtime::Perbill;
         }}
     "#,
         metadata_path
diff --git a/testing/ui-tests/src/incorrect/substitute_path_not_absolute.rs b/testing/ui-tests/src/incorrect/substitute_path_not_absolute.rs
new file mode 100644
index 0000000000..98424f05bc
--- /dev/null
+++ b/testing/ui-tests/src/incorrect/substitute_path_not_absolute.rs
@@ -0,0 +1,7 @@
+#[subxt::subxt(runtime_metadata_path = "../../../artifacts/polkadot_metadata.scale")]
+pub mod node_runtime {
+    #[subxt::subxt(substitute_type = "sp_arithmetic::per_things::Perbill")]
+    use sp_runtime::Perbill;
+}
+
+fn main() {}
diff --git a/testing/ui-tests/src/incorrect/substitute_path_not_absolute.stderr b/testing/ui-tests/src/incorrect/substitute_path_not_absolute.stderr
new file mode 100644
index 0000000000..6e8f863a37
--- /dev/null
+++ b/testing/ui-tests/src/incorrect/substitute_path_not_absolute.stderr
@@ -0,0 +1,5 @@
+error: The substitute path must be a global absolute path; try prefixing with `::` or `crate`
+ --> src/incorrect/substitute_path_not_absolute.rs:4:9
+  |
+4 |     use sp_runtime::Perbill;
+  |         ^^^^^^^^^^
diff --git a/testing/ui-tests/src/lib.rs b/testing/ui-tests/src/lib.rs
index bced80fc0c..f63ed64de3 100644
--- a/testing/ui-tests/src/lib.rs
+++ b/testing/ui-tests/src/lib.rs
@@ -15,6 +15,14 @@
 // along with subxt.  If not, see <http://www.gnu.org/licenses/>.
 #![cfg(test)]
 
+//! UI test set uses [`trybuild`](https://docs.rs/trybuild/latest/trybuild/index.html) to
+//! check whether expected valid examples of code compile correctly, and for incorrect ones
+//! errors are helpful and valid (e.g. have correct spans).
+//!
+//!
+//! Use with `TRYBUILD=overwrite` after updating codebase (see `trybuild` docs for more details on that)
+//! to automatically regenerate `stderr` files, but don't forget to check that new files make sense.
+
 mod dispatch_errors;
 mod storage;
 mod utils;
@@ -49,3 +57,9 @@ fn ui_tests() {
         dispatch_errors::metadata_array_dispatch_error(),
     ));
 }
+
+#[test]
+fn ui_fail() {
+    let t = trybuild::TestCases::new();
+    t.compile_fail("src/incorrect/*.rs");
+}