diff --git a/.changeset/tidy-frames-drum.md b/.changeset/tidy-frames-drum.md
new file mode 100644
index 0000000..39b07a4
--- /dev/null
+++ b/.changeset/tidy-frames-drum.md
@@ -0,0 +1,5 @@
+---
+"posthog-ruby": minor
+---
+
+Use stable project-relative stack frame `filename` values (relative to `Rails.root` or `Dir.pwd`, falling back to the basename outside the project) while preserving the raw path in `abs_path`; dependency and stdlib frames are detected from RubyGems/stdlib install roots, computed once per stacktrace, so `in_app` no longer depends on deploy-path substrings.
diff --git a/lib/posthog/exception_capture.rb b/lib/posthog/exception_capture.rb
index 5a62f44..08d69d4 100644
--- a/lib/posthog/exception_capture.rb
+++ b/lib/posthog/exception_capture.rb
@@ -97,8 +97,10 @@ def self.build_single_exception_from_data(title, message, backtrace, mechanism:
     def self.build_stacktrace(backtrace)
       return nil unless backtrace && !backtrace.empty?
 
+      root = project_root
+      roots = dependency_roots(root)
       frames = backtrace.first(50).map do |line|
-        parse_backtrace_line(line)
+        parse_backtrace_line(line, project_root: root, dependency_roots: roots)
       end.compact.reverse
 
       {
@@ -108,8 +110,10 @@ def self.build_stacktrace(backtrace)
     end
 
     # @param line [String]
+    # @param project_root [String, nil] Project root used to derive project-relative filenames.
+    # @param dependency_roots [Array<String>, nil] Cached gem and stdlib roots.
     # @return [Hash, nil]
-    def self.parse_backtrace_line(line)
+    def self.parse_backtrace_line(line, project_root: self.project_root, dependency_roots: nil)
       match = line.match(RUBY_INPUT_FORMAT)
       return nil unless match
 
@@ -118,11 +122,11 @@ def self.parse_backtrace_line(line)
       method_name = match[5]
 
       frame = {
-        'filename' => File.basename(file),
+        'filename' => frame_filename(file, project_root),
         'abs_path' => file,
         'lineno' => lineno,
         'function' => method_name,
-        'in_app' => !gem_path?(file),
+        'in_app' => !gem_path?(file, dependency_roots || self.dependency_roots(project_root)),
         'platform' => 'ruby'
       }
 
@@ -131,13 +135,71 @@ def self.parse_backtrace_line(line)
       frame
     end
 
+    # Root directory the application runs from, used to derive stable
+    # project-relative filenames from per-host deploy paths
+    # (e.g. `/app/releases/20240101/...`).
+    #
+    # @return [String]
+    def self.project_root
+      if defined?(::Rails) && ::Rails.respond_to?(:root) && ::Rails.root
+        ::Rails.root.to_s
+      else
+        Dir.pwd
+      end
+    rescue StandardError
+      Dir.pwd
+    end
+
+    # Stable filename used for fingerprinting: the project-relative path when
+    # the file lives inside the project root, its basename otherwise. The raw
+    # absolute path is kept separately in `abs_path`.
+    #
+    # @param path [String]
+    # @param project_root [String, nil]
+    # @return [String]
+    def self.frame_filename(path, project_root)
+      if project_root && !project_root.empty? && path_within?(path, project_root)
+        relative = path[project_root.length..]
+        relative = relative[1..] while relative.start_with?(File::SEPARATOR)
+        return relative unless relative.empty?
+      end
+
+      File.basename(path)
+    end
+
+    # Whether the path belongs to an installed gem or the Ruby standard library,
+    # based on gem install locations rather than path substrings.
+    #
+    # @param path [String]
+    # @param dependency_roots [Array<String>]
+    # @return [Boolean]
+    def self.gem_path?(path, dependency_roots = self.dependency_roots)
+      dependency_roots.any? { |root| path_within?(path, root) }
+    end
+
+    # @param project_root [String]
+    # @return [Array<String>] Directories containing installed gems and the Ruby stdlib.
+    def self.dependency_roots(project_root = self.project_root)
+      roots = []
+      if defined?(Gem)
+        roots.concat(Gem.path) if Gem.respond_to?(:path)
+        roots << Gem.default_dir if Gem.respond_to?(:default_dir)
+        roots.concat(Gem.loaded_specs.each_value.map(&:full_gem_path)) if Gem.respond_to?(:loaded_specs)
+      end
+      roots << RbConfig::CONFIG['rubylibprefix'] if defined?(RbConfig)
+      # The project itself can be a loaded spec (e.g. a gem developed in place,
+      # or a Rails engine); its frames are still application code.
+      roots.compact.reject(&:empty?).uniq - [project_root]
+    rescue StandardError
+      []
+    end
+
     # @param path [String]
+    # @param root [String]
     # @return [Boolean]
-    def self.gem_path?(path)
-      path.include?('/gems/') ||
-        path.include?('/ruby/') ||
-        path.include?('/.rbenv/') ||
-        path.include?('/.rvm/')
+    def self.path_within?(path, root)
+      root = root.chomp(File::SEPARATOR)
+      path == root || path.start_with?("#{root}#{File::SEPARATOR}")
     end
 
     # @param frame [Hash]
diff --git a/spec/posthog/exception_capture_spec.rb b/spec/posthog/exception_capture_spec.rb
index 5f51da4..f423439 100644
--- a/spec/posthog/exception_capture_spec.rb
+++ b/spec/posthog/exception_capture_spec.rb
@@ -20,18 +20,26 @@ module PostHog
       end
 
       it 'identifies gem files correctly' do
-        gem_line = '/path/to/gems/ruby-3.0.0/lib/ruby/gems/3.0.0/gems/some_gem/lib/some_gem.rb:10:in `gem_method\''
-        frame = described_class.parse_backtrace_line(gem_line)
+        gem_file = File.join(Gem.path.first, 'gems', 'some_gem-1.0.0', 'lib', 'some_gem.rb')
+        frame = described_class.parse_backtrace_line("#{gem_file}:10:in `gem_method'")
+
+        expect(frame['in_app']).to be false
+      end
+
+      it 'identifies standard library files correctly' do
+        stdlib_file = File.join(RbConfig::CONFIG['rubylibdir'], 'json.rb')
+        frame = described_class.parse_backtrace_line("#{stdlib_file}:10:in `parse'")
 
         expect(frame['in_app']).to be false
       end
 
       it 'does not add context lines for non-in_app frames' do
-        # Use a gem-style path that points to this real file so File.exist? would be true
-        # but in_app should be false, so context lines should not be added
-        gem_line = "#{__FILE__}:10:in `gem_method'"
-                   .gsub(%r{/spec/}, '/gems/ruby/spec/')
-        frame = described_class.parse_backtrace_line(gem_line)
+        # Use a real file from a loaded gem so File.exist? is true
+        # but in_app is false, so context lines should not be added
+        gem_file = File.join(Gem.loaded_specs['rspec-core'].full_gem_path, 'lib', 'rspec', 'core.rb')
+        expect(File.exist?(gem_file)).to be true
+
+        frame = described_class.parse_backtrace_line("#{gem_file}:10:in `gem_method'")
 
         expect(frame['in_app']).to be false
         expect(frame['context_line']).to be_nil
@@ -39,6 +47,30 @@ module PostHog
         expect(frame['post_context']).to be_nil
       end
 
+      it 'uses project-relative filenames for paths inside the project root' do
+        line = '/app/releases/20240101/app/models/user.rb:42:in `validate_email\''
+        frame = described_class.parse_backtrace_line(line, project_root: '/app/releases/20240101')
+
+        expect(frame['filename']).to eq('app/models/user.rb')
+        expect(frame['abs_path']).to eq('/app/releases/20240101/app/models/user.rb')
+      end
+
+      it 'falls back to the basename for paths outside the project root' do
+        line = '/somewhere/else/app/models/user.rb:42:in `validate_email\''
+        frame = described_class.parse_backtrace_line(line, project_root: '/app/releases/20240101')
+
+        expect(frame['filename']).to eq('user.rb')
+        expect(frame['abs_path']).to eq('/somewhere/else/app/models/user.rb')
+      end
+
+      it 'derives filenames for real project files relative to the current working directory' do
+        frame = described_class.parse_backtrace_line("#{File.expand_path(__FILE__)}:10:in `app_method'")
+
+        expect(frame['filename']).to eq('spec/posthog/exception_capture_spec.rb')
+        expect(frame['abs_path']).to eq(File.expand_path(__FILE__))
+        expect(frame['in_app']).to be true
+      end
+
       it 'adds context lines for in_app frames' do
         # Use a real in_app path so File.exist? is true and in_app is true
         app_line = "#{__FILE__}:10:in `app_method'"
@@ -111,6 +143,19 @@ def test_method_that_throws
         expect(stacktrace['frames'][0]['filename']).to eq('action_controller.rb')
         expect(stacktrace['frames'][1]['filename']).to eq('user.rb')
       end
+
+      it 'computes dependency roots once for all frames' do
+        backtrace = [
+          '/app/app/models/user.rb:42:in `validate_email\'',
+          '/app/app/controllers/users_controller.rb:10:in `show\''
+        ]
+
+        expect(described_class).to receive(:dependency_roots).once.and_return([])
+
+        stacktrace = described_class.build_stacktrace(backtrace)
+
+        expect(stacktrace['frames'].length).to eq(2)
+      end
     end
 
     describe '#build_parsed_exception' do