diff --git a/crates/pixi_core/src/workspace/discovery.rs b/crates/pixi_core/src/workspace/discovery.rs
index e3c1c399ab..f84affa44e 100644
--- a/crates/pixi_core/src/workspace/discovery.rs
+++ b/crates/pixi_core/src/workspace/discovery.rs
@@ -151,6 +151,7 @@ impl WorkspaceLocator {
     /// Called to locate the workspace or error out if none could be located.
     pub fn locate(self) -> Result<Workspace, WorkspaceLocatorError> {
         // Determine the search root
+        let explicit_start = matches!(&self.start, DiscoveryStart::ExplicitManifest(_));
         let discovery_start = match self.start {
             DiscoveryStart::ExplicitManifest(path) => {
                 pixi_manifest::DiscoveryStart::ExplicitManifest(path)
@@ -191,7 +192,7 @@ impl WorkspaceLocator {
         };
 
         // Take into consideration any environment variables that may be set.
-        if self.consider_environment {
+        if self.consider_environment && !explicit_start {
             if let Some(WithWarnings {
                 value: manifests,
                 warnings: mut env_warnings,
diff --git a/tests/integration_python/test_manifest_path.py b/tests/integration_python/test_manifest_path.py
new file mode 100644
index 0000000000..27926d8e1d
--- /dev/null
+++ b/tests/integration_python/test_manifest_path.py
@@ -0,0 +1,33 @@
+import json
+from pathlib import Path
+
+from .common import EMPTY_BOILERPLATE_PROJECT, verify_cli_command
+
+
+def test_explicit_manifest_correct_location(pixi: Path, tmp_path: Path) -> None:
+    current_dir = tmp_path / "current"
+    target_dir = tmp_path / "target"
+    current_dir.mkdir()
+    target_dir.mkdir()
+
+    (current_dir / "pixi.toml").write_text(EMPTY_BOILERPLATE_PROJECT)
+    (target_dir / "pixi.toml").write_text(EMPTY_BOILERPLATE_PROJECT)
+
+    out = verify_cli_command(
+        [
+            pixi,
+            "shell-hook",
+            "--manifest-path",
+            target_dir,
+            "--json",
+        ],
+        cwd=current_dir,
+    )
+
+    payload = json.loads(out.stdout)
+    value = payload["environment_variables"].get("PIXI_PROJECT_MANIFEST")
+    assert value is not None, "PIXI_PROJECT_MANIFEST missing from activated env"
+
+    expected = (target_dir / "pixi.toml").resolve()
+    actual = Path(value).resolve()
+    assert actual == expected