diff --git a/src/client/activation/activationManager.ts b/src/client/activation/activationManager.ts
index fac5cbeda648..763ce1ae8819 100644
--- a/src/client/activation/activationManager.ts
+++ b/src/client/activation/activationManager.ts
@@ -83,6 +83,8 @@ export class ExtensionActivationManager implements IExtensionActivationManager {
 
     @traceDecoratorError('Failed to activate a workspace')
     public async activateWorkspace(resource: Resource): Promise<void> {
+        const folder = this.workspaceService.getWorkspaceFolder(resource);
+        resource = folder ? folder.uri : undefined;
         const key = this.getWorkspaceKey(resource);
         if (this.activatedWorkspaces.has(key)) {
             return;
@@ -117,8 +119,7 @@ export class ExtensionActivationManager implements IExtensionActivationManager {
         if (this.activatedWorkspaces.has(key)) {
             return;
         }
-        const folder = this.workspaceService.getWorkspaceFolder(doc.uri);
-        this.activateWorkspace(folder ? folder.uri : undefined).ignoreErrors();
+        this.activateWorkspace(doc.uri).ignoreErrors();
     }
 
     protected addHandlers(): void {
diff --git a/src/client/interpreter/activation/service.ts b/src/client/interpreter/activation/service.ts
index f97545a5823a..4eac5ad94d30 100644
--- a/src/client/interpreter/activation/service.ts
+++ b/src/client/interpreter/activation/service.ts
@@ -259,7 +259,9 @@ export class EnvironmentActivationService implements IEnvironmentActivationServi
                     shellInfo.shellType,
                     interpreter,
                 );
-                traceVerbose(`Activation Commands received ${activationCommands} for shell ${shellInfo.shell}`);
+                traceVerbose(
+                    `Activation Commands received ${activationCommands} for shell ${shellInfo.shell}, resource ${resource?.fsPath} and interpreter ${interpreter?.path}`,
+                );
                 if (!activationCommands || !Array.isArray(activationCommands) || activationCommands.length === 0) {
                     if (interpreter && [EnvironmentType.Venv, EnvironmentType.Pyenv].includes(interpreter?.envType)) {
                         const key = getSearchPathEnvVarNames()[0];
diff --git a/src/test/activation/activationManager.unit.test.ts b/src/test/activation/activationManager.unit.test.ts
index 2b8d54f12ee9..6ee2572214b8 100644
--- a/src/test/activation/activationManager.unit.test.ts
+++ b/src/test/activation/activationManager.unit.test.ts
@@ -82,6 +82,12 @@ suite('Activation Manager', () => {
         test('If running in a virtual workspace, do not activate services that do not support it', async () => {
             when(workspaceService.isVirtualWorkspace).thenReturn(true);
             const resource = Uri.parse('two');
+            const workspaceFolder = {
+                index: 0,
+                name: 'one',
+                uri: resource,
+            };
+            when(workspaceService.getWorkspaceFolder(resource)).thenReturn(workspaceFolder);
 
             autoSelection
                 .setup((a) => a.autoSelectInterpreter(resource))
@@ -112,6 +118,12 @@ suite('Activation Manager', () => {
         test('If running in a untrusted workspace, do not activate services that do not support it', async () => {
             when(workspaceService.isTrusted).thenReturn(false);
             const resource = Uri.parse('two');
+            const workspaceFolder = {
+                index: 0,
+                name: 'one',
+                uri: resource,
+            };
+            when(workspaceService.getWorkspaceFolder(resource)).thenReturn(workspaceFolder);
 
             autoSelection
                 .setup((a) => a.autoSelectInterpreter(resource))
@@ -150,6 +162,13 @@ suite('Activation Manager', () => {
                 .returns(() => Promise.resolve())
                 .verifiable(typemoq.Times.once());
 
+            const workspaceFolder = {
+                index: 0,
+                name: 'one',
+                uri: resource,
+            };
+            when(workspaceService.getWorkspaceFolder(resource)).thenReturn(workspaceFolder);
+
             await managerTest.activateWorkspace(resource);
 
             autoSelection.verifyAll();
@@ -289,6 +308,12 @@ suite('Activation Manager', () => {
                 .setup((a) => a.performPreStartupHealthCheck(resource))
                 .returns(() => Promise.resolve())
                 .verifiable(typemoq.Times.once());
+            const workspaceFolder = {
+                index: 0,
+                name: 'one',
+                uri: resource,
+            };
+            when(workspaceService.getWorkspaceFolder(resource)).thenReturn(workspaceFolder);
 
             await managerTest.activateWorkspace(resource);
             await managerTest.activateWorkspace(resource);