diff --git a/src/PowerShellEditorServices/Extensions/FileContext.cs b/src/PowerShellEditorServices/Extensions/FileContext.cs
index 770cc33f7..c8c32e58e 100644
--- a/src/PowerShellEditorServices/Extensions/FileContext.cs
+++ b/src/PowerShellEditorServices/Extensions/FileContext.cs
@@ -58,8 +58,7 @@ public sealed class FileContext
         /// <summary>
         /// Gets the workspace-relative path of the file.
         /// </summary>
-        public string WorkspacePath => editorOperations.GetWorkspaceRelativePath(
-                        scriptFile.FilePath);
+        public string WorkspacePath => editorOperations.GetWorkspaceRelativePath(scriptFile);
 
         #endregion
 
diff --git a/src/PowerShellEditorServices/Extensions/IEditorOperations.cs b/src/PowerShellEditorServices/Extensions/IEditorOperations.cs
index 6f282eeea..f69fb4b2f 100644
--- a/src/PowerShellEditorServices/Extensions/IEditorOperations.cs
+++ b/src/PowerShellEditorServices/Extensions/IEditorOperations.cs
@@ -28,9 +28,8 @@ internal interface IEditorOperations
         /// <summary>
         /// Resolves the given file path relative to the current workspace path.
         /// </summary>
-        /// <param name="filePath">The file path to be resolved.</param>
         /// <returns>The resolved file path.</returns>
-        string GetWorkspaceRelativePath(string filePath);
+        string GetWorkspaceRelativePath(ScriptFile scriptFile);
 
         /// <summary>
         /// Causes a new untitled file to be created in the editor.
diff --git a/src/PowerShellEditorServices/Services/Extension/EditorOperationsService.cs b/src/PowerShellEditorServices/Services/Extension/EditorOperationsService.cs
index fa6da7f90..d7448ff1a 100644
--- a/src/PowerShellEditorServices/Services/Extension/EditorOperationsService.cs
+++ b/src/PowerShellEditorServices/Services/Extension/EditorOperationsService.cs
@@ -195,7 +195,7 @@ public async Task SaveFileAsync(string currentPath, string newSavePath)
         // workspace it's in.
         public string GetWorkspacePath() => _workspaceService.InitialWorkingDirectory;
 
-        public string GetWorkspaceRelativePath(string filePath) => _workspaceService.GetRelativePath(filePath);
+        public string GetWorkspaceRelativePath(ScriptFile scriptFile) => _workspaceService.GetRelativePath(scriptFile);
 
         public async Task ShowInformationMessageAsync(string message)
         {
diff --git a/src/PowerShellEditorServices/Services/Workspace/WorkspaceService.cs b/src/PowerShellEditorServices/Services/Workspace/WorkspaceService.cs
index f705101f8..aaaa49309 100644
--- a/src/PowerShellEditorServices/Services/Workspace/WorkspaceService.cs
+++ b/src/PowerShellEditorServices/Services/Workspace/WorkspaceService.cs
@@ -306,18 +306,23 @@ public void CloseFile(ScriptFile scriptFile)
         /// <summary>
         /// Gets the workspace-relative path of the given file path.
         /// </summary>
-        /// <param name="filePath">The original full file path.</param>
         /// <returns>A relative file path</returns>
-        public string GetRelativePath(string filePath)
+        public string GetRelativePath(ScriptFile scriptFile)
         {
-            string resolvedPath = filePath;
+            string resolvedPath = scriptFile.FilePath;
 
-            if (!IsPathInMemory(filePath) && !string.IsNullOrEmpty(InitialWorkingDirectory))
+            if (!scriptFile.IsInMemory)
             {
-                Uri workspaceUri = new(InitialWorkingDirectory);
-                Uri fileUri = new(filePath);
-
-                resolvedPath = workspaceUri.MakeRelativeUri(fileUri).ToString();
+                Uri fileUri = scriptFile.DocumentUri.ToUri();
+                foreach (WorkspaceFolder workspaceFolder in WorkspaceFolders)
+                {
+                    Uri workspaceUri = workspaceFolder.Uri.ToUri();
+                    if (workspaceUri.IsBaseOf(fileUri))
+                    {
+                        resolvedPath = workspaceUri.MakeRelativeUri(fileUri).ToString();
+                        break;
+                    }
+                }
 
                 // Convert the directory separators if necessary
                 if (Path.DirectorySeparatorChar == '\\')