Can Chrome be made to perform an XSL transform on a local file?

The short answer is "No, use one of the diverse set of browsers out there".

The reason this doesn't work is due to a security concern that Chrome has addressed in a controversial way^[1][2][3][4], by blocking XML files from accessing local XSLT files in the same directory, while HTML files can access .CSS files in the same directory just fine.

Across the issues cited above, users have asked for a clearer error message (since the domains, protocols and ports do in fact match), or at least displaying the XML without the styling. Chrome developers have ignored these requests.

You can do this locally using Chrome's command line flags.

The specific flag is --allow-file-access-from-files

On OS X: from Terminal.app run /Applications/Google\ Chrome.app/contents/MacOS/Google\ Chrome --allow-file-access-from-files

On Windows: from the command prompt run %LOCALAPPDATA%\Google\Chrome\Application\chrome.exe --allow-file-access-from-files

Note: You will probably have to quit Chrome if it is currently running otherwise Ch

If you want to stick to the OP, the answer is No (as others have pointed out) but one way to fix the problem is to run a simple webserver and open files via http in chrome. If you have python 2.x installed, you can run a webserver by typing:

python -m SimpleHTTPServer

Or in python 3.x :

python3 -m http.server

and then open file using http://localhost:8000/yourfile.xml in chrome. Hopefully you just want to get your work done and its not a crucial thing to have to open file using file://