diff --git a/internal/commands/project/clone/repo_clone.go b/internal/commands/project/clone/repo_clone.go
index 94ad47745161b2e84d35946063b367eed332a6f5..006a30d25619c7692d0c7f0bf8cd9b69fc168762 100644
--- a/internal/commands/project/clone/repo_clone.go
+++ b/internal/commands/project/clone/repo_clone.go
@@ -3,6 +3,7 @@ package clone
 import (
 	"errors"
 	"fmt"
+	"path"
 	"strconv"
 	"strings"
 
@@ -107,9 +108,13 @@ glab repo clone -g <group> [flags] [<dir>] [-- <gitflags>...]`,
 			dbg.Debug("Args:", strings.Join(args, " "))
 			dbg.Debug("GitFlags:", strings.Join(opts.gitFlags, " "))
 			if nArgs := len(args); nArgs > 0 {
-				ctxOpts.Repo = args[0]
-				if nArgs > 1 && !opts.preserveNamespace {
-					opts.dir = args[1]
+				if opts.groupName != "" {
+					opts.dir = args[0]
+				} else {
+					ctxOpts.Repo = args[0]
+					if nArgs > 1 && !opts.preserveNamespace {
+						opts.dir = args[1]
+					}
 				}
 			}
 			dbg.Debug("Dir:", opts.dir)
@@ -230,7 +235,17 @@ func groupClone(opts *options, ctxOpts *ContextOpts) error {
 		ctxOpt := *ctxOpts
 		ctxOpt.Project = project
 		ctxOpt.Repo = project.PathWithNamespace
-		err = cloneRun(opts, &ctxOpt)
+		opt := *opts
+		if opts.dir != "" {
+			if opts.preserveNamespace {
+				namespacedDir := project.PathWithNamespace
+				opt.dir = opts.dir + "/" + namespacedDir
+				opt.preserveNamespace = false
+			} else {
+				opt.dir = opts.dir + "/" + path.Base(project.PathWithNamespace)
+			}
+		}
+		err = cloneRun(&opt, &ctxOpt)
 		if err != nil {
 			finalOutput = append(finalOutput, fmt.Sprintf("%s %s - Error: %q", c.RedCheck(), project.PathWithNamespace, err.Error()))
 		} else {
diff --git a/internal/commands/project/clone/repo_clone_test.go b/internal/commands/project/clone/repo_clone_test.go
index 85918afd2f3102a76d0d6efbc2fb187db35df916..87bec20a13aac208db394291f9e9ec9716478445 100644
--- a/internal/commands/project/clone/repo_clone_test.go
+++ b/internal/commands/project/clone/repo_clone_test.go
@@ -107,6 +107,17 @@ func TestNewCmdClone(t *testing.T) {
 				Repo: "",
 			},
 		},
+		{
+			name: "group clone with directory argument",
+			args: "-g NAMESPACE/REPO mydir",
+			wantOpts: options{
+				gitFlags: []string{},
+				dir:      "mydir",
+			},
+			wantCtxOpts: ContextOpts{
+				Repo: "",
+			},
+		},
 		{
 			name:    "unknown argument",
 			args:    "NAMESPACE/REPO --depth 1",
@@ -147,6 +158,7 @@ func TestNewCmdClone(t *testing.T) {
 
 			assert.Equal(t, tt.wantCtxOpts.Repo, ctxOpts.Repo)
 			assert.Equal(t, tt.wantOpts.gitFlags, opts.gitFlags)
+			assert.Equal(t, tt.wantOpts.dir, opts.dir)
 		})
 	}
 }