diff --git a/internal/uri/uri.go b/internal/uri/uri.go
index 90ba3b05a..76633110f 100644
--- a/internal/uri/uri.go
+++ b/internal/uri/uri.go
@@ -206,5 +206,13 @@ func IsWSLURI(uri string) bool {
 		return false
 	}
 
-	return u.Scheme == "file" && u.Host == "wsl$"
+	if u.Scheme == "file" && u.Host == "wsl$" {
+		return true
+	}
+
+	if u.Scheme == "file" && u.Host == "wsl.localhost" {
+		return true
+	}
+
+	return false
 }
diff --git a/internal/uri/uri_test.go b/internal/uri/uri_test.go
index e75aa5a66..a9c289df9 100644
--- a/internal/uri/uri_test.go
+++ b/internal/uri/uri_test.go
@@ -193,6 +193,11 @@ func TestIsWSLURI(t *testing.T) {
 			uri:  `file://wsl%24/Ubuntu/home/james/some/path`,
 			want: true,
 		},
+		{
+			name: "Localhost WSL file path should return true",
+			uri:  `file://wsl.localhost/Ubuntu/home/james/foo`,
+			want: true,
+		},
 		{
 			name: "Regular file path should return false",
 			uri:  `file://C:/foo/james/foo`,