diff --git a/NEWS b/NEWS
index ce42f4db..eeaef985 100644
--- a/NEWS
+++ b/NEWS
@@ -18,6 +18,7 @@ For a more comprehensive changelog of the latest experimental code, see:
  - Fix too long help string for compression tools in the extra input file
    selection which made the file selection impossible because the widgets
    were outside the window.
+ - Respect given output directory in compress_tinsel.
 
 1.4.0 (2011-11-11)
  - Updated the compress_sci tool to add support for compressing the AUDIO001.002
diff --git a/engines/tinsel/compress_tinsel.cpp b/engines/tinsel/compress_tinsel.cpp
index 2e0d8219..45052716 100644
--- a/engines/tinsel/compress_tinsel.cpp
+++ b/engines/tinsel/compress_tinsel.cpp
@@ -263,14 +263,22 @@ void CompressTinsel::execute() {
 	Common::Filename inpath_smp = _inputPaths[0].path;
 	Common::Filename inpath_idx = _inputPaths[1].path;
 
+	Common::Filename &outpath = _outputPath;
+	if (outpath.empty())
+		outpath = inpath_smp.getPath();
+
 	_input_idx.open(inpath_idx, "rb");
 	_input_smp.open(inpath_smp, "rb");
 
-	Common::removeFile(TEMP_IDX);
-	_output_idx.open(TEMP_IDX, "wb");
+	Common::Filename outpath_idx = outpath;
+	outpath_idx.setFullName(TEMP_IDX);
+	Common::removeFile(outpath_idx.getFullPath().c_str());
+	_output_idx.open(outpath_idx, "wb");
 
-	Common::removeFile(TEMP_SMP);
-	_output_smp.open(TEMP_SMP, "wb");
+	Common::Filename outpath_smp = outpath;
+	outpath_smp.setFullName(TEMP_SMP);
+	Common::removeFile(outpath_smp.getFullPath().c_str());
+	_output_smp.open(outpath_smp, "wb");
 
 	switch (_format) {
  	case AUDIO_MP3: