diff --git a/news/2 Fixes/16893.md b/news/2 Fixes/16893.md
new file mode 100644
index 000000000000..39878f4ba792
--- /dev/null
+++ b/news/2 Fixes/16893.md	
@@ -0,0 +1,2 @@
+Fix environment sorting for the `Python: Select Interpreter` command.
+(thanks [Marc Mueller](https://github.com/cdce8p))
diff --git a/src/client/interpreter/configuration/environmentTypeComparer.ts b/src/client/interpreter/configuration/environmentTypeComparer.ts
index ac0eaae0cd9a..df7a46fd576f 100644
--- a/src/client/interpreter/configuration/environmentTypeComparer.ts
+++ b/src/client/interpreter/configuration/environmentTypeComparer.ts
@@ -168,7 +168,11 @@ function compareEnvironmentType(a: PythonEnvironment, b: PythonEnvironment, work
 export function getEnvTypeHeuristic(environment: PythonEnvironment, workspacePath: string): EnvTypeHeuristic {
     const { envType } = environment;
 
-    if (workspacePath.length > 0 && environment.envPath && isParentPath(environment.envPath, workspacePath)) {
+    if (
+        workspacePath.length > 0 &&
+        ((environment.envPath && isParentPath(environment.envPath, workspacePath)) ||
+            (environment.path && isParentPath(environment.path, workspacePath)))
+    ) {
         return EnvTypeHeuristic.Local;
     }
 
diff --git a/src/test/configuration/environmentTypeComparer.unit.test.ts b/src/test/configuration/environmentTypeComparer.unit.test.ts
index ef4fc630e5f6..c52a2aea584d 100644
--- a/src/test/configuration/environmentTypeComparer.unit.test.ts
+++ b/src/test/configuration/environmentTypeComparer.unit.test.ts
@@ -266,6 +266,18 @@ suite('getEnvTypeHeuristic tests', () => {
 
             assert.strictEqual(envTypeHeuristic, EnvTypeHeuristic.Global);
         });
+
+        test('If envPath is not set, fallback to path', () => {
+            const environment = {
+                envType,
+                path: path.join(workspacePath, 'my-environment'),
+                version: { major: 3, minor: 10, patch: 2 },
+            } as PythonEnvironment;
+
+            const envTypeHeuristic = getEnvTypeHeuristic(environment, workspacePath);
+
+            assert.strictEqual(envTypeHeuristic, EnvTypeHeuristic.Local);
+        });
     });
 
     const globalInterpretersEnvTypes = [