diff --git a/tools/testing/selftests/Makefile b/tools/testing/selftests/Makefile
index d08fe4cfe811..a7b63860b7bc 100644
--- a/tools/testing/selftests/Makefile
+++ b/tools/testing/selftests/Makefile
@@ -114,19 +114,27 @@ ifdef building_out_of_srctree
 override LDFLAGS =
 endif
 
-ifneq ($(O),)
-	BUILD := $(O)/kselftest
+top_srcdir ?= ../../..
+
+ifeq ("$(origin O)", "command line")
+  KBUILD_OUTPUT := $(O)
+endif
+
+ifneq ($(KBUILD_OUTPUT),)
+  # Make's built-in functions such as $(abspath ...), $(realpath ...) cannot
+  # expand a shell special character '~'. We use a somewhat tedious way here.
+  abs_objtree := $(shell cd $(top_srcdir) && mkdir -p $(KBUILD_OUTPUT) && cd $(KBUILD_OUTPUT) && pwd)
+  $(if $(abs_objtree),, \
+    $(error failed to create output directory "$(KBUILD_OUTPUT)"))
+  # $(realpath ...) resolves symlinks
+  abs_objtree := $(realpath $(abs_objtree))
+  BUILD := $(abs_objtree)/kselftest
 else
-	ifneq ($(KBUILD_OUTPUT),)
-		BUILD := $(KBUILD_OUTPUT)/kselftest
-	else
-		BUILD := $(shell pwd)
-		DEFAULT_INSTALL_HDR_PATH := 1
-	endif
+  BUILD := $(CURDIR)
+  DEFAULT_INSTALL_HDR_PATH := 1
 endif
 
 # Prepare for headers install
-top_srcdir ?= ../../..
 include $(top_srcdir)/scripts/subarch.include
 ARCH           ?= $(SUBARCH)
 export KSFT_KHDR_INSTALL_DONE := 1